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ISLAMABAD: Power Division is said to have prepared a new draft Power Purchase Agreement (PPA) between Central Power Purchasing Agency Guaranteed (CPPA-G) and Karachi Electric (KE) aimed at regularizing supply of power to the latter, official sources told Business Recorder.

Presently, the Federal Government is supplying 1000MW of electricity to KE from the national grid to bridge power utility's gap between demand and supply, the sources added.

"We are placing revised PPA before the Economic Coordination Committee (ECC) of the Cabinet within a few days. Power Division has included the disputed condition in the draft PPA, which states that KE has to pay directly to the CPPA-G against power supply. KE has to get the amount of subsidy from the Finance Ministry directly that cannot be linked to payment to CPPA-G," the sources continued.

The federal government is supplying power from the national grid. The PPA between KE and NTDC expired on January 15, 2015. Regarding supply of LNG to KE, sources said PLL will supply 160mmcfd RING at the Custody Transfer Station (CTS) from summer 2021 till December 2025. An agreement is near finalization, with the only pending item being applicability of LPS (Late payment Surcharge) if TDS subsidy is not received on time. PLL cannot tie LPS to receipt of subsidy by KE. If the issue is addressed at macro level, it will apply here as well. KE measurement meters at CTS will be used until PLL can procure its own meters (long lead).

PLL will be using about 60 ft of interconnection of SSGC pipeline at CTS header and also using balancing services of SSGC (i.e., forced outages, etc). SSGC has declined to do O&M on metering facilities. PLL will either hire a third party, or work out an arrangement with KE for maintenance of the metering facility.

Commenting on interconnections at CTS, the sources said access was granted to KE contractors by SSGC inside CTS on February 27, 2021. Demarcation of pipeline route, metering station and allied facilities within CTS are completed. Work of foundations on existing pad is completed and concrete pouring is in progress. Excavation for foundations of vent stacks and control room is in progress. Laying of pipeline from metering station and passing under existing Engro pipe line is completed. Pipeline stringing and welding from boundary to metering station and other work of entire project is expected to be completed by 25 April 2021.

Petroleum Division has also been directed to submit a formal summary regarding additional supply of LNG to KE for consideration of Cabinet Committee on Energy (CCoE) after consultation with relevant stakeholders.

The sources said Privatisation Commission (PC) has also finalised its summary on modalities of Arbitration Agreement between KE and other public sector entities. The summary is based on viewpoints of power utility, Power Division, Petroleum Division, SSGC etc.

The key dispute between the Power Division and KE is on the clause "fairness and equity." Both sides have exchanged views through media and in the shape of letters. "We have given final touches to the summary on Arbitration as the concerned parties have not agreed on many issues," said a source in Privatisation Commission.

Copyright Business Recorder, 2021

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