SNGPL

Our hope…SNGPL… For better tomorrow…

The wealth of our Company is our customers Managing Director

VISION / MISSION

The largest integrated gas company.

Serving more than 3.4 million consumers in North Central Pakistan.

The Company has over 46 years of experience in operation and maintenance of high-Pressure gas transmission and distribution systems.

INTRODUCTION & HISTORY

It has also expanded its activities to undertake the planning, designing and construction of pipelines, both for itself and other organizations.

SNGPL operates in a region of the nation that has a rapidly growing demand for natural gas and power generation.

SNGPL was incorporated as a private limited Company in 1963 and converted into a public limited company in January 1964 under the Companies Act 1913, now Companies Ordinance 1984.

Listed on all the three Stock Exchanges of the Country.

SNGPL has 3,451,142 consumers comprising Commercial, Domestic, General Industry, Fertilizer, and Power & Cement Sectors.

Annual gas sales to these consumers were 584,895 MMCF worth Rs. 168,933 million during Jul 08 - Jun 09.

SNGPL transmission system extends from Sui in Baluchistan to Peshawar in Khyber Pakhtoon Khwa

Comprises over 7,347 KM of Transmission System (Main lines & Loop lines)The distribution activities covering:

1,624 main towns along with adjoining villages in Punjab & Khyber Pakhtoon Khwa are organized through 8 regional offices.

Distribution system consists of 67,449 KM of pipeline.

ADMINISTRATOR STRUCTURE:

Policy guidelines and overall control is vested in the elected Board of Directors as provided for in the Companies Ordinance 1984.

Gas Sources:

Sindh: 401,460 (MMCF)

Punjab: 55,882

Baluchistan: 165619

KPK: 30,197

CONSUMPTION TREND

POLITICAL AND LEGAL FACTORS

There are industrial laws for the protection of labor rights. In SNGPL there is labor union and

these laws will be directly affecting the practices in the company for the

determination of salaries and other fringe benefits.

ECONOMIC FACTORS• Company is financed by heavy debt. So any

change in interest rate would be affecting company profitability positively or negatively. Today the interest rate is low that definitely positive impact over the company policy.

• During inflation prices of products go high.

• High disposable income of the people results in high consumption similarly low disposable income reduces the spending of people.

SOCIAL FACTORS

• Social issues are becoming more anymore important for the organizations. SNGPL is also no exception. They have taking following steps to comply with social issues.

• They have initiated for the certification of ISO-14000. For this purpose a pipeline of about 5 km has been laid for the disposable of treated refinery effluent which eventually discharges of the river INDUS.

Technological factors

• In this ever-changing world of business only those will be surviving who have got latest technology and they have complete knowledge this technology. SNGPL is very good in both technology and the use of technology.

• SNGPL has got the state of art technology and this is the competitive advantage of the company. The total cost of the project is US $886 million and this heavy investment is made to ensure that the latest technology is adopted. This state of art technology is fully integrated across the refinery approved the common and consistent man-machine interface to the operator.

TYPES OF RISK

• Political risk • Socio-economical risk • Technical risk • Organizational risk • Natural catastrophic risk • Financial risk (investment risk) • Safety and security risk • Environment risk

POLITICAL RISKS

• Unstable Government policies

• Change in labor policy

• Delay in approvals from regulatory bodies

• Strikes, lockout, lawlessness

SOCIO-ECONOMICAL RISKS

• Change in economic parameters

• Rise in inflation and material prices

• Seasonal unavailability of labour

• Change in economic policies and tax system

ORGANIZATIONAL RISKS

• Breach in contractual relationship

• Loss of venture or partnership

• Unrealistic SWOT analysis

• Fine or compensation

INVESTMENT RISK

• Unrealistic cost baseline and financial delay

• Exchange rate risk and rise in interest rate

• Disinvestment from market

• Strong credit policy

TECHNOLOGICAL RISK

• Inefficient communication

• Inefficient and conventional technologies

• Insufficient resources and equipment

• Quality risk and rework

SECURITY RISK

• Accident during construction or operation

• Not use of HSE policies and standard

• Terrorism or war

• Human error (Damage or loss of machine or human resource)

NATURAL AND CLIMATIC RISK

• Earthquake

• Floods

• Landslide, hurricanes

• Weather conditions e.g. humidity, precipitation

ENVIRONMENTAL RISK

• Damage to natural resources

• Damage to surrounding environment

• Depletion of hydrocarbon resources

• Damage to ecology and wildlife

RISK MANAGEMENT STRATEGY

• Risk Transfer (Contract, insurance)

• Risk Distribution (Between parties)

• Risk Mitigation (Eliminating risk causes)

• Risk Avoidance

CONCLUSION AND RECOMMENDATIONS

• Probability of risk occurrence comes out to be the function of project duration both during construction and operation phase. However Intensity of destruction or Impact is a function of enterprise internal and external environment.

• Three most critical tasks calculated by Risky Project are Excavation, Transportation of Material and Stringing of pipelines. The most critical risks come out to be change in economic parameters, Change in design and scope, earthquake and terrorism during construction and operation of gas pipelines.

• The secondary risks like change in material prices, construction not finished in time or budget and design not in time can be reduced or transferred to the other party or organization by contract. However SNGPL is designing, constructing and operating gas pipelines so risk can be eliminated by strengthening the internal organizational capacity for design, construction and operation.

• Organizational or technological risk like insufficient resource planning or project management, change in scope etc can be eliminated by improving the process or application of new technologies available in this field. New state of the art technologies are helpful in managing change at any stage of the project.

• Earthquake risk during construction phase depends on the length of execution of project and only impact on the construction cost of the project. As the duration of the execution increases probability of occurrence of risk also increase. However, in operation phase this risk must be eliminated by practicing design based on earthquake/horizontal forces.