Sui Northern Gas Pipelines Limited (SNGP) held a corporate briefing session on 12th Sep’24, whereby the management discussed the FY23 financials and its future outlook.
Brief Takeaways
• The company has a network of 7.5mn consumers.
• 39% of Pakistan’s energy mix relies on gas provided by SNGP (65%) and SSGC (65%) of which 29% is Indigenous gas while 10% is LNG. The remainder is Oil (24%), Coal (15%), Hydro (11%), Nuclear (7%), LPG (2%) and Renewable energy (2%).
• During FY23, the UFG reduced to 5.15% (from 38.6bcf to 32.5bcf)., the UFG reduced to 5.15% (from 38.6bcf to 32.5bcf). Management shared that the improvement in UFG is attributable to micro-level monitoring at the city and district levels.
• The bottom-line witnessed an uptick of 2% YoY in FY23 due i) revision in consumer gas tariff, and ii) reduction in UFG.
• The company has commenced operations in Gilgit. Moreover, considering rising energy demand, it has commenced marketing and distribution of LPG cylinders.
• The company has completed the pipeline project connecting Wali-1, located in Lakki Marwat, to the production system, which is producing up to 30mmcfd of gas. Similarly, the Shewa well in North Waziristan (~potential of producing up to 70mmcfd) has also reached completion but is undergoing a testing phase, after which it will commence production. Another well, Kot Palak in D.I Khan (~potential of 45mmcfd), is witnessing the laying down of a pipeline.
• The management shared that the company’s payment of E&P companies has significantly improved due to gas price revisions.
• Regarding diversion costs, the management informed that the price is now being passed on to consumers.
• The management reported that OGRA had disallowed the passing of finance costs in FY23 and directed the company to submit supporting audit certification in the upcoming FRR so that OGRA can review and decide.
• On a question regarding further jumps in gas prices, the management said that currently, PKR/USD and Brent prices are at a stable level, which, if sustained, could keep the gas prices unchanged.
Courtesy – AHL Research
