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ISLAMABAD: Private Power & Infrastructure Board (PPIB) has expedited its efforts to get up to 55 mmcfd gas from Kandhkot gas-field for 226 MW Engro Powergen Qadirpur Limited (EPQL), sources close to Secretary Petroleum told Business Recorder.

Managing Director, PPIB, Shah Jahan Mirza has written a letter to Secretary Power, a copy of which has also been sent to Secretary Petroleum, in which he has advocated allocation of gas from Kandhkot field to EPQL established near Qadirpur gas field.

EPQL, is a combined cycle power plant near Ghotki, Sindh, commissioned in March 2010 under 2002 Power Policy. The project was initially allocated low BTU Permeate Gas (PG) from Qadirpur gas-field which was anticipated to decline from 2015 and reach minimum level by 2017. However, actual production of PG was higher and the updated gas profile shared by the gas supplier SNGPL indicates that a commingling fuel would be required to operate the plant, technically at a minimum level of 90 MW by end of this year. At present, the project is being operated in mixed mode i.e. using HSD to cover the shortfall of PG.

The sources said EPQL submitted Gas Depletion Mitigation Plan (GDMP) in 2019 and after detailed discussions in a series of stakeholders’ meetings, RLNG was narrowed down as most viable Gas Depletion Mitigation Option (GDMO). EPQL’s GDMP /GDMO was discussed by PPIB Board on September 27, 2021, and subsequently by PPIB Projects’ Committee on November 26, 2021, who directed NTDC and CPPA-G to provide despatch modelling and sensitivity analysis for plant operation on commingled RLNG in various scenarios.

EPQL wants gas allocation from Kandhkot field

NTDC carried out sensitivity analyses using PLEXOS software to assess the plant dispatch. CPPA-G also forwarded a presentation on EPQL’s cost benefit/sensitivity analysis for 2023-35 under different options, upon which PPIB highlighted certain observations and sought clarifications, which are yet to be received.

Lately, EPQL has requested allocation of Kandhkot gas by highlighting potential benefits of producing cheaper electricity by using this low BTU gas with savings on account of overall energy basket price (Rs. 300 billion for remaining life) or forex savings (upto $ 2 billion).

According to Managing Director PPIB, EPQL believes that it is an ideal consumer of Kandhkot gas, as the plant is specifically designed for consumption of low BTU gas with high HS content. Earlier, it was anticipated that more than a 100 km pipeline with huge capex would be required for supply of limited volume of gas from Kandhkot; however, EPQL has recently worked out that only 30 km pipeline would be required to connect EPQL plant with nearest off-take from Kandhkot field.

PPIB argues that PPL had earlier been pointing out low gas off-takes from Kandhkot field by GENCO due to which locally produced gas was under-utilized, adding that low utilization would result not only in technical issues in the gas-field but also loss of revenue for PPL. Reportedly, PPL was also looking for an alternate buyer for Kandhkot gas during last winter.

EPQL has also highlighted that Petroleum Division is planning to re-allocate some volume of Kandhkot gas to other consumers to enhance the offtake.

Managing Director PPIB has requested Secretary Power Division to use his office to pursue Petroleum Division for possible allocation of 25-55 mmscfd gas from Kandhkot gas-field to EPQL (gradual increase in gas offtake from Kandhkot with depleting Qadirpur reserves).

Mirza maintained that the project has a remaining useful life of over 12 years, with all the debt paid, which can be prudently utilised to produce cheaper electricity by using indigenous low BTU gas.

Copyright Business Recorder, 2022

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