Government-run gas marketing firm Sui Southern Gas Company (SSGC) decided to expand its business after the company announced that it will start power production due to a continuous drop in gas supplies from domestic fields.
Moreover, its subsidiary company will also work on projects such as producing gas from biogas, coal, bio-methane and hydrogen gas. “SSGC Alternate Energy (Pvt) Limited, a fully owned subsidiary of SSGC, has been incorporated as a private limited company under the Companies Act 2017,” according to the company’s announcement.
The business model of SSGC Alternate Energy will principally revolve around alternative energy projects like renewable or eco-friendly fuels like biogas and bio-methane, electricity production from thermal energy, and advanced energy projects like coal-to-gas production and hydrogen production said the announcement.
In addition, the company has also planned to deal in wastewater treatment and transportation, and other energy projects. Initial information proposes that the diversification of SSGC’s business had been under consideration for the past six months or so with a “coal-to-gas project” in the mind.
Further information shows that a fertiliser manufacturing company can use the gas produced from coal as gas is the main raw material in fertiliser manufacturing. Meanwhile, companies in the private sector are also working on introducing hydrogen as a fuel in the future, which belongs to eco-friendly fuels.
“SSGC has taken a good decision … ahead of the liberalisation of power market in the country,” Pak-Kuwait Investment Company Head of Research Samiullah Tariq remarked. The government will start the power market sometime in 2023, where multiple buyers and sellers will operate. Currently, the government is the only buyer of electricity from all producers.
“Commercial launch of the Competitive Trading Bilateral Contract Market (CTBCM) will help control circular debt and eliminate transmission and distribution losses,” stated Tariq.
“SSGC may be considering taking lead in the CTBCM,” he highlighted, adding that the “CTBCM trail projects are in operation in the country”.
Furthermore, Karachi faces a power shortfall regularly in spite of the supply of electricity from the national grid to the city.
“The gas utility may be eyeing the power deficit in Karachi because it will be difficult for the federal government to supply additional power from the national grid in the near future,” Tariq said.