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ISLAMABAD: The Private Power & Infrastructure Board (PPIB) has constituted a three-member committee to evaluate Gas Depletion Mitigation Plan/ Option (GDMP)/GDMO of 226.5 MW Engro Powergen Qadirpur Ltd (EPQL), official sources told Business Recorder.

On June 21, 2022, Managing Director, PPIB apprised that EPQL, a 226.5 MW power plant near Ghotki, Sindh, is utilizing low BTU Permeate Gas (PG) from Qadirpur Gas-filed. As per the latest gas profile shared by the gas supplier i.e., SNGPL comingling fuel would be required to operate the plant technically at minimum level of 90 MW by the end of this year. The Board was given a presentation about the project’s history.

Secretary Power/ Chairman PPIB Board, Rashid Mahmood Langrial observed that in current economic scenario, GoP is focusing on renewable and indigenous fuel-based projects. Converting a project to imported fuel will add to the burden of consumers. If additional 220 MW is required, then why not close down this project and opt for solar power.

MD PPIB explained that the project is based on PG which is produced during gas processing at Qadirpur field. It is low BTU gas and has no other usage except for power generation and has to be flared if not utilized.

The energy generation costs from this plant are very low, making it higher on merit order with current ranking of 10th as per latest merit order. The plant has even been despatched on HSD in the last few months.

MD PPIB highlighted that a detailed analysis was done jointly by PPIB, CPPA-G and NTDC and it was concluded that only three year extension, i.e., up to December 31, 2025 be given to the project to utilize available PG, after which it will be re-evaluated besides exploring other options like Kandhkot gas supply.

This extension will be on the premise that there will be no provision of minimum dispatch or guaranteed off-take on any fuel and the plant will be dispatched on economic merit order. Moreover, all risks and costs for this arrangement will be on the part of the company with no passing on any cost to consumers.

The Chairman enquired why the project is not proposed to be running on the level of availability of permeate gas only. MD PPIB explained that technically plant cannot operate below 90 MW and permeate gas is not enough to run the plant at minimum level; hence, comingling is expected to be required by end of this year.

Representative Finance Division enquired if the project is already paid off then why capacity payments are to be made and what will be the quantum of capacity payments?

DG (Thermal) PPIB explained that loan has already been retired and current capacity cost of Rs.1.4153/RW/hr includes fixed O&M, cost of working capital and Return on Equity as per Nepra tariff determination.

On a question about average tariff in period of extension, DG (Thermal) PPIB explained that as per latest merit order, the fuel cost component for EQPL on PG is Rs.7.36/kWh. At present, the plant is despatched at over 50% on available PG. In three years, the quantum of comingling fuel is expected to increase to 60-70%, depending upon the PG profile.

The tariff will accordingly be increased as per weighted average of commingling fuels. After detailed deliberation and considering recommendations of Projects’ Committee the Board concluded that the agenda requires further analysis for which a committee was constituted comprising of a representative Finance Division, a representative of Planning Division and MD PPIB.

To further evaluate the Gas Depletion Mitigation Plan/ Option (GDMP/GDMO) of EPQL, the Board constituted a committee comprising of: (i) representative Finance Division (Chairman and Member); (ii) representative Planning Division (Member); (ii) and MD PPIB (Member).

The Committee will evaluate the Gas Depletion Mitigation Plan /Option of EPQL and submit its report to the Board.

Copyright Business Recorder, 2022

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