ISLAMABAD: M/s Mari Petroleum Company Limited (MPCL) has asked Genco Holding Company Limited to execute already agreed term sheet to avoid 110-MMCFD gas disconnection to Guddu Thermal Power Plant.
Hasan Mehmood, Director- Business Development and Commercial, MPCL has sent a letter to Chief Financial Officer (CFO), Genco Holding Company Limited, wherein reference of MPCL letter of March 25, 2022 and other previous correspondence pertaining to extension and execution of term sheet for supply of 110 MMCFD gas to TPS Guddu was cited.
According to Director Business and Commercial, in the email correspondence of February 16, 2021, MPCL was apprised that Central Power Generation Company Ltd (CPGCL) has agreed in principle with the supplemental term sheet, and will be signing it immediately after obtaining approval from its Board of Directors. “However, no response or update has been received from CPGCL, despite our follow ups, regarding the subject matter till date.”
MPCL argues that the validity of the term sheet with TPS Guddu expired on February 8, 2020; however, MPCL in the larger national interest has still been supplying gas as per requirement. Thereafter, the negotiated term sheet (which is yet to be executed by CPGCL), having extended validity till February 8, 2022, has also expired.
“We would again like to reiterate that having a legally enforceable arrangement in place for the supply of 110 MMSCFD gas to TPS Guddu is imperative, especially considering the prevailing situation of receivables, irregular payments, and low/ erratic off-take,” he added.
M/s MPCL maintained that being a listed company, it has very strict audit and regulatory oversight with respect to having a legal gas supply agreement with its customers, adding that in the absence of a signed term sheets, MPCL will not be in a position to continue its supply of gas to TPS Guddu and will be forced to discontinue its gas supply.
MPCL has requested M/s CPGCL that term sheet be executed with a further extended validity of June 30, 2022 at the earliest.
Copyright Business Recorder, 2022