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ISLAMABAD: Petroleum Division has asked M/s Fauji Kabirwala Power Company Limited (FKPCL) to get consent of PPIB for supply of gas to its plant from Mari Petroleum Company Limited (MPCL).

The decision was taken under the chairmanship of the Secretary, Petroleum Division, to deliberate the issues related to supply/ allocation of gas/RLNG to FKPCL’s power plant. The meeting was attended by the representatives of Power Division, FKPCL, CPPA, PPIB, MPCL and SNGPL through video link) and officials of Petroleum Division.

Director General (Gas) gave the background of the issues related to gas supply to FKPCL’s power plant. Subsequently, Managing Director-FKPCL apprised the meeting that the power plant was commissioned in 1999, pursuant to Power Policy 1994. However, due to mismatch in the terms of PPA (30 years) and GSA (15 years), FKPCL faced issues regarding allocation/ supply of gas due to expiry of GSA in 2014-15.

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Upon expiry of the GSA, FKPCL was allocated 30 MMCFD of RLNG on take &pay basis, through a tripartite agreement, which was signed amongst SNGPL, FKPCL and CPPA-G. However, gas shortage and non-availability of RLNG led to plant stoppage and withholding of capacity payments by the power purchaser.

On a query of Secretary Petroleum, it was noted that the plant is 157 MW combined cycle IPP having 39% efficiency and that RLNG may be provided at OGRA notified rates. Representative of FKPCL then apprised about their proposal for provision of 38 MMCFD gas from Goru B Reservoir of MPCL be made available to FKPCL. On a query of chair, representative of CPPA-G stated that the plant is closed owing to non-availability of fuel. He further stated that plant may come up on merit if indigenous gas is provided instead of RLNG.

Director General (Gas) apprised that ECC of Cabinet in its decision of March 15, 2022 approved allocation of 110 MMCFD gas from Mari Deep (Goru-B) reservoir to SNGPL on firm basis till June 30, 2024 and the said gas is being injected into SNGPL’s system. Any subsequent extension in gas supplies beyond June 30, 2024 shall be subject to review of availability of gas volumes for which a new proposal shall be submitted to ECC for consideration.

On a query of the chair, Mari Petroleum Company Limited (MPCL) representative stated that MPCL may enter into a commercial arrangement with FKPCL for supply of up to 38 MMCFD gas subject to agreement on commercial terms & conditions between MPCL and FKPCL and Government allocation of up to 38 MMCFD Goru-B gas to FKPCL on “take and pay” and on “as and when required” basis with revision in SNGPL’s gas allocation from l10 MMCFD to 72 MMSCFD on firm basis and up to 38 MMCFD on “as and when available” basis.

Senior General Manager-SNGPL while giving input in the matter stated that SNGPL is in dire need of indigenous gas owing to continuous depletion of existing reservoirs and any reduction in SNGPL’s allocated indigenous gas/ 110 MMCFD from Goru B shall lead to curtailment of gas supply to various sectors.

The Chair while giving his viewpoint stated that indigenous gas is not available and that RLNG at full cost and take or pay basis may be provided to FKPCL’s power plant. He further stated that the Petroleum Division’s role is limited to supply of gas to the plant while the issue of release of capacity payments rests with CPPA/ Power Division.

Joint Secretary, Power Division stated that the quota of RLNG to power sector is at the disposal of NPCC for allocation/ dispatch to power plants. Director General, PPIB while giving his viewpoint stated that the plant will not come up on merit on RLNG fuel as other similar plants like Rousch are also closed for this reason. He further stated that the loss of FKPCL’s power plant is compensated by extension in term of the project while considering such period in OFME.

Subsequently while discussing the way forward FKPCL’s representative apprised that since they cannot sustain in the present situation, therefore they have filed a petition in PPIB to ensure supply of gas or dismantle the plant. On receipt of PPIB response, matter may be taken up with competent forum for decision in the matter.

After detailed deliberations, it was agreed that in first instance FKPCL will follow with PPIB for its petition and then position will be apprised to Ministry of Energy to proceed further in the matter.

Copyright Business Recorder, 2023

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