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ISLAMABAD: Petroleum Division has requested Power Division to initiate efficiency audit of energy being consumed by Captive Power Plants (CPPs) through National Energy Efficiency & Conservation Authority (NEECA) before March 1, 2022, sources close to Secretary Petroleum told Business Recorder.

Petroleum Division, the sources said, will also be seeking the nod from Cabinet Committee on Energy (CCoE) for necessary guidelines in respect of efficiency audit, as well as, gas tariff of CPPs.

In a letter to Secretary Power, Assistant Director, (Tech) (Directorate General Gas), Salahuddin Khan has explained the plan of Petroleum Division with respect to efficiency audit of CPPs besides sharing the undertaking to be signed with the export units.

According to Assistant Director, Cabinet Committee on Energy (CCoE), in its meeting held on October 8, 2021, did not approve the proposals made in Power Division’s summary regarding conducting of audit of Captive Power Plants (CPPs) of textile industry.

As per the CCoE’s decision, Petroleum Division was advised to hold consultative session on the issue and submit proposal for price review of the gas supplied to CPPs.

Gas moratorium forestall: Cabinet may review CCoE decision today

In pursuance of CCoE’s direction, Petroleum Division submitted a tariff revision summary to Federal Cabinet which was approved on November 9, 2021 and revised tariff was made effective for the period November 15, 2021 to March 31, 2022.

However, export (captive power) units assailed the decision of Federal Cabinet in respective High Court (s) and sought stay orders which were granted. Consequent to this, SNGPL disconnected gas/ RLNG supply to CPPs in Punjab and Khyber Pakhtunkhwa from November 15, 2021.

Later, consultative meetings were chaired by the Advisor for Commerce and Investment with export industry, Ministry of Commerce and Petroleum Division. He maintained that based on understanding reached with the industry, the gas/ RLNG supply was restored on December 29, 2021 subject to provision/ furnishing of an understanding by each captive unit.

As per the understanding, the export (captive power) units are willing to get efficiency audits conducted before June 30, 2022 for continuation of gas/ RLNG supply.

Directorate General of Gas further stated that in order to proceed with required efficiency audit which needs to be initiated not later than March 01, 2022, Petroleum Division has requested Power Division to advise its attached organisation, i.e., National Energy Efficiency & Conservation Authority (NEECA) to proceed with its audit plan.

Meanwhile, Petroleum Division would submit a summary to CCoE for necessary guidelines in respect of efficiency audit, as well as, gas tariff, the sources continued.

The proposed draft of undertaking for Punjab-based CPPs says that this is an undertaking between M/s (textile unit name) through its CEO/ Signatory of contract and Sui Northern Gas Pipelines Limited (SNGPL) through its GM/RM concerned regarding provision of gas supply to CPPs.

Following terms and conditions have been mutually agreed and shall be implemented: (i) volume equivalent to 38 per cent of consumption of average for the months from September to November 2021 i.e., … MMCFD shall be supplied till January 31, 2022;(ii) gas shall be provided @ $ 9/ MMBTU (to export units) and OGRA notified tariff to non-export units;(iii) court cases where stay orders have been obtained for supply of gas /RLNG @ $ 6.5/ MMBTU and ancillary matters pertaining to captive power tariffs and priority allocation of gas supply are withdrawn;(iv) in case of consumption over and above the agreed volume, there will be no objection if gas supply is disconnected till January 31;(v) get an energy audit done at their own expense by June 30, 2022 through an audit firm/consultant pre-qualified by NEECA to verify whether the unit is Co-gen and has an efficiency level as per ToRs decided by the CCoE, failing which gas connection will be disconnected; and (vi) undertake not to enter into any litigation and not obtain stay order against the company or the Federal Government on this matter. The wording of undertaking with KP industry and SNGPL will be the same as is with the Punjab based export units, except that gas shall be provided at the tariff notified by OGRA.

The number of customers on SSGCL is 1,453 of which 1,012 are processing units while 441 are captive units. Total gas load of 1,453 customers is 230 MMCFD, i.e., 90 MMCFD is industry (processing) and 140 MMCFD captive units. On SNGPL system, total customers are 621, which include 361 processing units and 260 CPPs. Total gas requirement of gas on SNGPL system is 203 MMCFD, of which 150 MMCFD is for processing units and 53 MMCFD for CPPs, respectively.

Copyright Business Recorder, 2022

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