Due to an increasing gas deficit, the government is looking to build underground gas storage in order to bridge the higher demand-supply gap in winters.
Special Assistant to the Prime Minister (SAPM) on Petroleum Nadeem Babar chaired a meeting on the development of Strategic Underground Gas Storages (SUGS) aimed at meeting the country’s growing domestic and commercial needs, especially during the winter.
“The construction of SUGS is part of the government’s policy to improve energy security and affordability in the country,” a Petroleum Division news release said.
The initiative is being supported by the Asian Development Bank (ADB), while a consortium of European oil & gas equipment companies is leading the study, a Petroleum Division news release said.
Explaining the rationale for building the SUGS, the SAPM said that Pakistan had considered building emergency stockpiles of gas “To deal with supply disruption amid country’s growing domestic and commercial demand especially in winter.”
The meeting agreed to expeditiously complete the study report on the methodology of underground gas storages till May 2021, so that availability of funds for the facility will be met in due course of time.
The final report will provide a blueprint for a facility with respect to size, modulation, and secure supply of gas.
Earlier, in 2019, Minister for Energy Omar Ayub Khan and Petroleum SAPM Nadeem Babar had discussed SUGS with ADB, who agreed to undertake a feasibility study for the project and allocated a grant.
Inter-State Gas Systems (Pvt) Ltd., a fully government-owned entity, will be the focal agency for the project.
ADB has completed its competitive bidding process and appointed the international consultant for preparing a feasibility study. Project infrastructure could be funded through Gas Infrastructure Development Cess (GIDC).
The SUGS facilities are crucial for the country in view of the committed supplies of imported gas under the international gas agreements and fast-growing gas demand in the country to keep pace with the economic progress.
The project will also significantly enhance Pakistan’s capability to provide an uninterrupted gas supply for sustainable economic growth