ISLAMABAD: A recent decision by the Cabinet Committee on Energy (CCoE) to redirect natural gas from Mari Gas to the pipeline grid has been protested by the fertiliser industry and has sought reconsideration to ensure the necessary output of fertilisers and protect the agricultural sector of the nation.
The CCoE’s decision to supply gas from the Mari Gas fields to the network via a new interconnection is a significant long-term danger to the food security of the world, as this will not only intensify the degradation of indigenous supplies, but also put billions of dollars of investment at risk,’ said Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC).
The FMPAC also warned in letters to the Ministers of Industry & Production, National Food Security, Planning & Growth and Energy that this will potentially result in unemployment for those directly and indirectly linked to industry in the region.
On 26 November 2020, the CCoE agreed to secure an additional 50 million cubic feet per day of natural gas from the Mari Field to the Sui Northern Gas Pipelines Ltd (SNGPL) grid by early January and to instal the Mari Petroleum compression plant in its field in order to ensure its continuous availability.
The FMPAC claimed that the Mari Field Habib Rahi Limestone (HRL) reservoir was a medium-value heating gas containing high levels of carbon dioxide and nitrogen, which is advantageous for the processing of urea fertilisers by means of facilities expressly built for such purposes, but has an opposite impact on the performance of any power plant.
An uneconomical style is the use of this gas as heat, a fact that was realised under the 2001 Fertiliser Program.
In the past, the government had agreed to devote a certain portion of this gas to Guddu Power Plant which was in itself a debatable decision because of the very poor efficiencies of the power plant. “The SNGPL supply is now inconsistent with the GoP’s stated policies and counterproductive to the long-term assurance of our national food security,” the letter said. It claimed that every 100mmcfd transferred from HRL would meet just two percent of the country’s current natural gas demand, but would chip away nearly 20 percent of the natural gas needs of the fertiliser sector in coming years.
The fertiliser industry has demanded a fresh look at the long-term feasibility of both the domestic and national food security sectors from the relevant ministries.
“While the impact of this domestic gas diversion on the SNGPL network may not have visible short-term effects, it definitely threatens national food security and billions of rupees of tax losses due to the early closure of the domestic industry,” he added, adding that it was not wise to redirect gas away from the agricultural sector’s long-term needs in order to satisfy short-term network needs.
A government official said there was no urgency for the government or the CCoE to rethink the decision as the supply of natural gas to the fertiliser industry was never a priority in the winter months when the entire attention was on ensuring full supplies, including from imports to residential customers.
He said a clear picture of the fertiliser stock situation was given to the CCoE and even Punjab-based fertiliser plants were supplied with gas until mid-November.
The fertiliser industry also challenged the use of natural gas as fuel in power plants, general factories and the domestic industry, stating that gas was a key component of the energy mix of the world, but unfortunately the share of value-added products from gas was extremely low.
Fertiliser was the only industry in the world that used natural gas in large amounts for value-added purposes, which remains a vital source of national food protection, and hence all previous governments gave the development of indigenous fertilisers some importance. Part of this ideology was the devotion of Mari shallow gas for fertiliser under the Fertiliser Policy 2001.
It claimed that there could be reasons for importing fertilisers for domestic use, but their supply could never be guaranteed at the right time and at the right price.
In addition to the economic and employment significance of agriculture, “food insecurity is expected to reach nearly 60 percent nationwide by 2030 if no positive steps are taken to increase domestic food commodity production,” for which domestic fertiliser is a must, the fertiliser industry said.