TPS Guddu: PD against planned diversion of gas supply to urea factories

ISLAMABAD: Power Division is said to have opposed diversion of 110 MMCFD gas of Mari Gas from Thermal Power Station (TPS) Guddu to two urea plants, saying that any such attempt will result in waste of significant investment made by the government of Pakistan in the plant and assets at TPS Guddu, well informed sources told Business Recorder.

Ministry of Industries and Production (MoI&P) wants to de-allocate 110 MMCFD indigenous gas of GTPS Genco-II to supply it to two fertilizer plants, i.e., M/s Fatimafert Limited and Agritech.

ECC on December 28, 2016 allowed MPCL to supply unutilized gas volumes of HRL reservoir, which become available due to operational exigencies from time to lime, to its existing consumers with preference to the fertilizer sector.

Urea production: Fertiliser plants to get gas till May 31st: ECC

Later, CCOE on November 26, 2020 allowed MPCL to supply up to 50 MMCFD of Thermal Power Station Guddu (TPSG)/ GENCO-II’s un-drawn/ underutilized HRL gas volumes to SNGPL on ‘as and when’ available basis while Engro Fertilizer Ltd (old unit on MPCL)) was also being supplied un-drawn volumes from other MPCL customers including TPSG/ GENCO-II.

Sharing the details, sources said that 100 MMCFD gas supplies from Mari Gas field have been allocated to TPS Guddu since 1984. However, during the year 2016-17, gas allocation increased to 110 MMCFD for the purpose of cheaper power for maintaining the basket price of electricity during high pricing era of imported fuel. Unit rate for gas is Rs 1050 per MMBTU for normal production (31 MMCFD) while $ 6.1144 per MMBTU for incremental production (79 MMCFD) at heating value is around 700-735 Btu/ CFT.

The term sheet signed between CPGCL and MPCL was for four years on the basis of 70 per cent take or pay basis.

To off-take this 110 MMCFD gas supplies from Daharki to TPS Guddu, the GoP through CPGCL invested Rs 4.5 billion on installation/ O&M of gas pressure boosting compressor station during the year 2016. Then GoP changed its policy during the year 2020 and Cabinet Committee on Energy (CCoE) decided to suspend the operation of cheapest plant of TPS Guddu.

Accordingly, Mari gas diverted the unutilized gas quota of Genco-II to fertilizer customers connected on Mari gas supply network. However, MPCL also raised Take or Pay (ToP) invoices to CPGCL during that period. Chairman Nepra during the public hearing allowed the operation of TPS Guddu plant even on open cycle mode in larger public interest due to its cost-effective power generation @ Rs 8 to 12 per kWh from TPS Guddu.

Presently, gas supplies disconnected by MPC effective from November 1, 2022 in purview of term sheet clause-10 due to the outstanding payment amounting to Rs 32.188 billion as on April 30, 2023 (only principal amount) that included in circular debt of power sector.

The sources said, as the cheapest power generation could not be added into national grid; therefore, it is required to restore the 110 MMCFD gas supplies from Mari gas field so that further cheaper power generation could be added into national grid.

Copyright Business Recorder, 2023