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ISLAMABAD: M/s Engro Power Gen Qadirpur Ltd (EPQL) has reportedly not submitted feasible assumptions for compensation on financial results of Gas Depletion Mitigation Plan/ Option (GDMP/ GDMO), sources close to Managing Director PPIB told Business Recorder.

M/s EPQL was commissioned in March 2010 to produce electricity using low BTU Permeate Gas (PG) from Qadirpur gas-field. Initially, it was conceived that the PG would start declining from 2015 onwards and reach a minimum level by 2017; however, actual production was higher than projected.

At present EPQL is being operated in mixed-mode using HSD to the extent of shortfall in PG. As per gas profile shared by SNGPL, a comingling fuel would have been required for the plant; however, latest estimates indicate that the project can continue operation for another year at a minimum technical load factor of 90 MW. To enable EPQL going further, a GDMP/ GDMO has to be mutually agreed or project can be terminated after payment the compensation amounts.

EPQL power generation: PPIB seeks analysis on minimum price of PEL gas

PPIB Board in its last meeting took the following decisions: (i) since sufficient clarity on financial results of GDMP/ GDMO did not exist, the Board directed that further analysis is to be done on the possible options of gas depletion mitigation; (ii) EPQL is to be engaged for reduction in PEL gas pricing. Moreover, Petroleum Division shall make an analysis with OGRA regarding minimum expected price of PEL gas; and (iii) a duly signed-off table be finalized with EPQL on year-wise termination compensation amounts for rest of the life of the project.

Sharing update on the decisions taken by the Board in its last meeting, the sources said, further analysis on various gas depletion mitigation options are in process. M/s EPQL has submitted a sensitivity analysis on several options including PEL gas, Kandhkot gas and the gas available after expiry of Liberty Power Plant contract discussed in a meeting of stakeholders held on March 1, 2023. It was deliberated that PEL gas can be used to make up shortfall of the depleting permeate gas for initial period of three years. Moreover, Kandhkot gas can be utilised alternatively for which EPQL will liaise with PPL and Petroleum Division for gas availability and allocation.

CPPA-G was requested to provide dispatch modelling and financial impact analysis of plant operation on latest sensitivity analysis.

The sources said that EPQL is in coordination with PEL for gas price reduction; however, PEL has reportedly not reduced the gas price. PPIB, vide its letter dated 9th January 2023, requested Petroleum Division to provide detailed analysis regarding minimum possible price of PEL gas.

The Petroleum Division advised that since the Badar Gas pricing has been mutually agreed between PEL and EPQL, the matter is required to be dealt solely between them. Discussions are also under way to finalize termination compensation amounts. EPQL has submitted the compensations amounts; however, there is no clarity on assumptions for these calculations. Accordingly, EPQL was advised to submit detailed assumptions.

Copyright Business Recorder, 2023


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