E&P companies in Pakistan have incurred losses exceeding Rs. 50 billion between 2021-2024, credited to decreased gas outflows from Sui companies to the national transmission grid. Companies, including OGDC, Mari Petroleum, PPL, and MOL, have continually warned that caps on local gas flows threaten the economic viability of old wells and require expensive interventions in restoring production. Several wells have not been able to recover billions of rupees through stocks.
On November 13, 2024, for instance, Sui Northern Gas Pipelines Limited (SNGPL) lowered the intake of gas from local fields by 200 mmcfd, which has now reached a peak of 285 mmcfd. Some significant reductions include 90 mmcfd from the Sui field (PPL), 48 mmcfd from HRL/Ghazij (Mari Petroleum), and 50 mmcfd from fields operated by MOL, rendering them susceptible to non-recoverable damage.
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The reduction in gas consumption in the power sector worsened system pressures. Much of the RLNG and local gas supply of the country is also underutilized owing to less electricity demand at that time so as not to incur costs on generation options such as coal, nuclear, and hydropower, which are cost-effective. Expensive RLNG discourages its use, especially in the months when seasonal demand in Punjab and Khyber Pakhtunkhwa declines.
The Power Division promised that it would use its preference for cheaper power generation options to compensate for these additions in the already elevated energy costs of the country, thus making it complex to consume gas in various sectors.