Provinces agree on reforms for gas sector

Prime Minister Shahid Khaqan Abbasi chairing meeting on gas sector reforms at Prime Minister's office on 28th September, 2017

ISLAMABAD: On Thursday, Shahid Khaqan Abbasi said that availability, affordability, efficiency and sustainability were the hallmark of gas sector reforms process.

Chairing the 5th meeting of the Gas Sector Leadership Committee, the prime minister highlighted the energy needs of the country and the strategy being pursued to carry out reforms and meet consumer’s demands for energy.

The meeting was attended by Sindh Chief Minister Syed Murad Ali Shah, Balochistan Chief Minister Sanaullah Khan Zehri, Minister of State for Energy Jam Kamal Khan, Khyber Pakhtunkhwa Minister of Energy Atif Khan, Punjab Minister of Finance Dr Aysha Ghaus Pasha, OGRA Chairman Uzma Adil Khan and other senior officials.  World Bank Pakistan Mission Leader Defne Gencer along with senior officials of the World Bank were also present.

The prime minister observed that around 100 gas discoveries that were made during this year were not enough to meet the existing demand and therefore necessitated the import of gas besides enhancement of local production.

Discussing the reform process, the prime minister highlighted that the new policy, regulations and technical framework would be perfectly compliant with the constitutional provisions. The PM assured the meeting that all constitutional issues pertaining to the gas sector were being addressed at the level of CCI. He said that while the constitutional matters were being dealt at an appropriate level, the process of operational and tactical reforms should simultaneously be continued.

Gas Sector Reform Team Leader and SSGC MD Khalid Rahman briefed the meeting on downstream and upstream gas sector reforms including Third Party Access (TPA), un-bundling of transmission and distribution business, licensing and tariff methodology.

The meeting was apprised that draft TPA rules had been submitted to OGRA and public comments were being invited. Network codes were in the final stages and SNGPL Board had approved processing of the appointment of a transaction advisor. It was further briefed that licensing proposals were being considered by OGRA. Policy reforms regarding gas sector had already been referred by the CCI to IPCC for discussion and comments from Sindh and Khyber Pakhtunkhwa had been received.

World Bank consultant briefed the meeting on recommendations regarding allocation of policy and regulatory rules, establishment of directorate general of Exploration & Production in the Ministry of Energy and establishment of Pakistan Petroleum Exploration and Production Regulatory Authority.

The meeting was also briefed on existing administrative capacity of the public gas sector organisations and proposals for enhancement of its efficiency.

The prime minister thanked provincial governments and the World Bank for active and productive engagement in the reforms process. The prime minister stated that these reforms were inevitable for a sustainable gas supply system. He emphasised that the main objective of the reform process was to facilitate the end consumer without compromising on rights and privileges of the provinces and other stakeholders. Balochistan chief minister lauded the role of the prime minister in leading these reforms and stated that Balochistan had supported the proposed reforms. He stated that the proposed reforms must lead to affordable and easy access of gas to the people of Balochistan. Sindh chief minister, while supporting the reforms process, emphasised on equal representation of provinces in the proposed regulatory bodies. He also underscored the importance of fulfilling constitutional requirements for these reforms and proper sequencing of procedural and constitutional reforms.

Khyber Pakhtunkhwa’s minister of Energy also seconded the viewpoint of the Sindh province.

Punjab’s minister for Finance informed that the government of Punjab had already constituted a committee to discuss the gas sector reforms and emphasised on financial sustainability.

The meeting supported, in principle, to carry forward the reforms process and pledged to contribute towards providing a sustainable and efficient gas exploration, production, transmission and distribution system.

The prime minister assured the provinces of his personal commitment to working with each chief minister to deliver the reform programme.