Archive for July, 2012

Urea plants suffer Rs5.5bn loss

Posted on July 27, 2012. Filed under: Natural Gas, Pakistan |

LAHORE, July 25: In the first half of 2012, all SNGPL-based plants, including Agritech, DH Fertilisers, Pakarab and Engro (new plant), faced a collective loss of Rs5.5 billion in terms of revenue as their total sales of urea stood at 150,000 tons as against 316, 000 tons in the first half of last year.

In a statement, the fertiliser industry stated that 52 per cent decline in terms of sale translates itself in a revenue loss of Rs5.5 billion. The total urea production by SNGPL based plants in the first half of 2011 stood at 297,000 tons which declined by 33 per cent (or 198,000 tons) till June this year.

The plants operated at 18 per cent oftheir capacity during these six months against 25 per cent last year. During the first half, they faced an estimated gas curtailment of 82 per cent in which Agritech and Pak Arab got gas for 63 days each while Engro Enven and DH Fertilisers got gas for 33 days in the first six months of 2012.

In the first quarter of this year, all SNGPL-based and SSGC-based plants faced a loss of revenue by 53 per cent compared with first quarter of 2011, generating Rs8.16 billion revenue in the first quarter as compared to last years` Rs17.29 billion.

In 2012, four plants based on SNGPL as well as SSGC based FFBL lost profitability by 125 per cent and made acollective loss of Rs1.076 billion whereas the same plants had made profit of Rs4.3 billion in the first quarter of 2011.

The SNGPL-based plants are facing crisis as 82 per cent gas curtailment was never witnessed before 2012.

Despite making an investment of $2.3 billion in the last four years on new production capacity, making Pakistan world`s seventh largest urea manufacturer, there is an idle urea capacity of over three million tons.

Fertiliser sector officials said that if same gas curtailment continues during the remaining five months of 2012, the SNGPL-based fertiliser plants would be forced to shut down permanently.

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300 CNG stations facing closure

Posted on July 27, 2012. Filed under: Energy crisis, Natural Gas, Pakistan |

ISLAMABAD, July 25: In a bid to put a cap on once robust CNG industry the government has refused to renew the licence of nearly 300 CNG stations, paving way for the closure of all CNG outlets in three years` time.

The Ministry of Petroleum in a written directive, available with Dawn, has stopped Ogra from granting extension/renewal in CNG licences of operational stations on their expiry. CNG licences were granted for the period of 15 years with provision of a five-year extension. The government, however, has decided not to grant any extension to manage the shortfall of gas.

Adviser to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain on July 13 told Senate that due to continuous gas crisis, the CNG stations would be closed down in phased manner.

Well-placed sources aware of the development told Dawn that with this direction of the ministry around 290 CNG stations would be closed down shortly after completing 15 years duration in accordance with Ogra licence.

They said many licenseeshas approached Ogra for grant of renewal in their CNG licences, however, their cases have now been held up by Ogra, adding, `currently 3,337 CNG stations are functioning` They said the ministry of petroleum had now started materialising its three years long policy by putting a ban on CNG business. The adviser verbally directed Ogra not to grant five years renewal/ extension in the existing CNG marketing licences on their expiry date under Rule 7 (2) of Pakistan CNG (Production & Marketing) Rules, 1992 and further advised Director General (Gas) of the MP & NR to issue policy guidelines/ instructions in the matter to Ogra.

The CNG industry was set up in 1997 in Pakistan. It saw a massive boom due to high petroleum prices during the past decade and 3.5 million commercial and private vehicles were converted to CNG.

But Pakistan started experiencing gas shortfall in 2007 which worsened in the following years forcing government to put an end to CNG industry which is estimated to be valuing more than Rs15 trillion.

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