LNG-fired power plants: ECC all set to approve amendments in PPAs, GSAs

ISLAMABAD: The Economic Coordination Committee (ECC) is all set to approve amendments in Power Purchase Agreements (PPAs) and Gas Supply Agreements (GSAs) of three LNG-fired power plants, well-informed sources told Business Recorder.

Sources said Cabinet Committee on Energy (CCoE) considered the summary submitted by the Power Division regarding the waiver of minimum 66% take-or-pay commitment in Power Purchase Agreement(s) (PPAs & Gas Supply Agreement(s) (GSAs) of three RLNG public sector power plants namely, Quaid-e-Azam Thermal Power Plant, Balloki Power Plant and Haveli Bahadur Shah Power Plant. CCoE approved the proposal subject to the intent that the minimum take-or-pay commitment of 66% under the PPA(s) and GSA(s) shall be relaxed with effect from January, 2022. All parties to the transaction shall initiate amendments in the respective agreements and stakeholders including Privatization Commission, Petroleum Division and Power Division undertook the implementation of the decision and relaxation /diminishing of the minimum 66% take or pay commitment in the PPA and GSA of NPPMCL projects (Balloki Power Plant and Haveli Bahadur Shah Power Plant) and Quaid-e- Azam Thermal Power Plant.

The proposed amendments in the PPA and GSA to relax/diminish the minimum 66% take or pay commitment are based on the following: (i) the concept envisages a Monthly Production Plan (MPP) binding on the Power Purchaser and the Power Seller with effect from 2022 wherein the power purchaser shall be entitled to give each such MPP between zero percent (0%) and one hundred percent (100%) of the prevailing tested capacity at least seventy-five days before the start of each such month, to be finalized by the System Operator and Operating Committee formed under the PPA; (ii) concept of a Monthly Delivery Plan (MDP) for deliveries of gas under the GSA, has been paired with the MPP provided under PPA; and (iii) corresponding changes to Article-V of the PPA are required to harmonize the concept of MPP with the Annual Production Plan (APP) to be submitted by the Power Purchaser which shall be indicative and non-binding in nature.

Similarly, an indicative and non-binding Annual Delivery Plan (ADP) under the GSA shall also be given by the project companies to SNGPL.

The summary has been circulated to the Government of Punjab, Finance Division, Ministry of Energy (Petroleum Division) NEPRA, NPPMCL, CPPA-G, Ministry of Law and Justice, PPIB and Ministry of Privatization Commission for views/comments regarding incorporation of the proposed contractual concept/mechanism.

Copyright Business Recorder, 2021