The Chairperson of the Sui Northern Gas Pipelines Limited (SNGPL), Roohi Khan, revealed that the total unaccounted for gas (UFG) losses of the company have come down to 8 per cent in January 2021, compared to 12 per cent in June 2020. She took to Twitter and said, “With concerted efforts of the newly formed SNGPL Board in July 2020, support of Sect. MOP, gas losses brought down from around 12% (June 2020)to 8% (Jan 2021) by controls at #KARAK KPK !”
She lauded the efforts of the new SNGPL board for achieving this. In the past few years, Karak was the top UFG contributor of SNGPL.
As per 2018-19 annual report of the company, Peshawar region contributed 31 per cent (16,133 MMCF) of the total UFG.
According to Shanker Telreja of Topline Securities, “Reduction from 12 per cent to 8 per cent indicates savings of 33 per cent and every 1 per cent of UFG loss drags SNGPL bottom line by Rs2.1billion (before tax) and Rs1.5bn (after tax).”
As per our discussion with subject experts, UFG is likely to remain in single digit for SNGPL in near future. If we assume SNGPL’s UFG at 9-9.5 per cent for 2020-21, then incremental impact on its earnings will be Rs2.97 per share (20% of FY21 EPS) at a cost of gas purchase of Rs500 per MMBtu.
