Govt weighs Rs46 billion security plan for gas pipelines, E&P operations
Proposal seeks 14 dedicated wings after 23 sabotage incidents caused losses of 7,624 million cubic feet of gas over two years
The government is considering a proposal to establish 14 dedicated security wings to protect gas pipelines and oil and gas exploration and production (E&P) operations, mainly in Khyber-Pakhtunkhwa (KP) and Balochistan, amid mounting losses from terrorist attacks,
The Express Tribune reported.
The proposed framework includes four dedicated wings for Sui Northern Gas Pipelines Limited's (SNGPL) pipelines and northern gas sources and 10 wings, modelled on the China-Pakistan Economic Corridor (CPEC) security framework, for E&P operations.
Around 23 sabotage incidents have been reported over the past two years on the Shewa and Bettani pipelines and SNGPL's main northern network, resulting in an estimated loss of 7,624 million cubic feet of gas, equivalent to about 25 liquefied natural gas (LNG) cargoes.
The financial loss is estimated at Rs12.7 billion at a local gas price of $6 per million British thermal units (mmBtu) and around Rs27.7 billion at a re-gasified LNG price of $13/mmBtu.
A complete suspension of supplies from northern sources could have a significantly larger financial impact. Diverting expensive re-gasified LNG (RLNG) to meet demand would add Rs97 billion to SNGPL's annual revenue requirement, raising its prescribed price by about Rs333/mmBtu from Rs1,719/mmBtu to Rs2,052/mmBtu during the current financial year.
Recent discoveries including Mami Khel, Shewa and Spinwam in the Waziristan Block, OGDC's Bettani under the Wali Exploration Licence and Al-Haj's Koi Palak in the Baska North Block currently contribute 146 million cubic feet per day (mmcfd) to SNGPL's northern network.
Other northern sources contribute another 410 mmcfd, taking total indigenous inflows through the network to 556 mmcfd.
Existing security deployments cover sensitive pipeline corridors including Shewa-Kaka Khel, Kot Palak-DI Khan/Pezzu, Bettani-Kaka Khel, Kharappa-Marjuwala and Kharappa-Gurguri Makori.
Around 1,513 personnel currently protect SNGPL pipelines at an annual cost of approximately Rs3 billion, while E&P companies deploy another 1,828 personnel at an annual cost of Rs2.174 billion. Combined, the existing security arrangements comprise around 3,341 personnel and cost Rs5.174 billion annually.
Following a series of meetings between the petroleum minister, Sui companies and E&P firms, a two-part security mechanism was agreed to strengthen protection of pipelines and exploration operations.
Under the first component, four dedicated regular wings are proposed for SNGPL pipelines and northern gas sources. Establishing them is estimated to cost Rs12 billion, with another Rs4 billion in annual recurring expenditure.
After adjusting for two wings already deployed, the additional requirement for the remaining two wings is estimated at Rs8.969 billion, along with annual recurring expenditure of Rs2 billion.
The second component proposes 10 dedicated regular wings for exploration, seismic data acquisition, drilling, wellhead facilities, gas processing and related E&P activities. Four would be deployed in K-P and six in Balochistan, where security constraints have been delaying exploration and development activity.
Establishing the 10 E&P wings is estimated to cost Rs30 billion — Rs12 billion for K-P and Rs18 billion for Balochistan.
The Rs30 billion cost is proposed to be shared equally among E&P companies, the federal government and the respective provincial governments, with each contributing Rs10 billion.
The E&P companies would also bear the entire Rs10 billion annual recurring cost. Under the proposed arrangement, the E&P security mechanism would have no financing cost, prescribed gas price impact or pass-through to consumers.
