ISLAMABAD: The fertiliser industry has protested over a recent decision of the Cabinet Committee on Energy (CCoE) to divert natural gas to pipeline system from Mari Gas and has sought its reconsideration to ensure required fertiliser production and protect the country’s agriculture sector.
The “decision of the CCoE, whereby gas is being provided from the Mari Gas fields to the network through a new interconnection, is a grave threat to the country’s food security in the long term since this would not only hasten the depletion of indigenous resources but also put at risk the billions of dollars of investment”, said Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC).
In letters to ministers of industries & production, national food security, planning & development and energy, the FMPAC also warned that this will eventually cause unemployment in the country of those related to the industry directly and indirectly.
The CCoE had decided on Nov 26, 2020 to ensure additional 50 million cubic feet per day of natural gas from Mari Field to the Sui Northern Gas Pipelines Ltd (SNGPL) system by early January and installation of compression facility by Mari Petroleum on its field to ensure its continuous supplies.
The FMPAC said the Habib Rahi Limestone (HRL) reservoir of the Mari Field was a medium heating value gas with high carbon dioxide and nitrogen contents, which make it beneficial for the production of urea fertiliser by the facilities specifically designed for such purposes, but inversely affect the efficiency of any power plant.
Utilisation of this gas as fuel is an uneconomical mode, a fact that had been realised under Fertiliser Policy 2001.
In the past, the government had decided to allocate a certain portion of this gas to Guddu Power Plant which was in itself a debatable decision because of the very low efficiencies of the power plant. “Now the supply to SNGPL is contradictory to the stated policies of GoP and counterproductive for the long-term assurance of our national food security,” the letter said. It claimed that every 100mmcfd transferred from HRL will meet only two per cent of the current natural gas requirement in the country but will chip away nearly 20pc of the fertiliser sector’s natural gas requirements in coming years.
The fertiliser industry has requested the relevant ministries to have a fresh look at the long-term viability of both the domestic industries as well as national food security.
“While the impact of this diversion of domestic gas to the SNGPL network may not have visible effects in short term, it definitely threatens the national food security and billions rupees of loss in taxes due to the early closure of domestic industry,” it said while adding that it was not prudent to divert gas away from the long-term needs of agriculture sector to meet short-term needs of network consumers.
A government official said there was no urgency for the government or the CCoE to reconsider the decision as natural gas supply to fertiliser industry was never a priority in winter months when entire focus was to ensure maximum supplies even from imports to the residential consumers.
He said the CCoE had been given a clear picture of the fertiliser stock position and gas supplies to even Punjab-based fertiliser plants was ensured until mid-November.
The fertiliser industry has also questioned the use of natural gas as fuel in power plants, general industries and domestic sector saying the gas was a key component of country’s energy mix but unfortunately the share of value-added products from gas was extremely low.
Fertiliser was the only industry in the country using natural gas for value-added purposes in sizeable quantities that remain a key source of national food security and hence all the past governments allocated certain priority to indigenous fertiliser production. Dedication of Mari shallow gas for fertiliser under the Fertiliser Policy 2001 was part of this philosophy.
It said there could be arguments for importing fertilisers for domestic use but their availability at the right time and at the right price could never be assured.
Besides the importance of agriculture in terms of economy and employment, “food insecurity is anticipated to reach nearly 60pc country-wide in 2030 if positive steps are not taken to enhance domestic production of food commodities” for which domestic fertiliser was a must, said the fertiliser industry.
