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ISLAMABAD: Directorate General of Gas (Petroleum Division) has urged Power Division to revise Firm Gas Orders (FGOs) of Government Power Plants (GPPs) down from November 2023 to February 2024 to avoid any financial implications on any party.

Directorate General of Gas, sources said, floated this proposal in response to letters from Power Division and National Transmission and Despatch Company (NTDC), adding that Sui Northern Gas Pipeline Limited (SNGPL) has highlighted that three GPPs had placed FGOs from November 2023 to February 2024.

Settlement of dues of IPPs/GPPs: FD seeks expenditure details of Rs601bn extended to PD

The sources said, for November, 2023, GPPs’ FGOs are 437-MMCFD of gas, power demand is 200-MMCFD whereas RLNG spot cargoes are 200-MMCFD. For December 2023, GPPs FGOs are 424-MMCFD, whereas power demand is 274-MMCFD against available RLNG of 274-MMCFD. In January 2024, GPPs’ FGOs are 387-MMCFD, power demand is 360-MMCFD, whereas RLNG availability on spot cargoes is 290-MMCFD and 220-MMCFD without spot cargoes. For February, GPPs’ FGOs are 268-MMCFD, power demand is 150-MMCFD whereas RLNG availability with and without spot cargoes is 150-MMCFD each.

Deputy Director (Tech) Salah Uddin Khan, in his letter noted that M/s SNGPL has stated that RLNG demand provided by power sector is less than cumulative FGOs of three GPPS and it can lead to financial repercussions for SNGPL, as well as, the GPPs. Further, winter’s gas demand of domestic sector rises exponentially and SNGPL has to divert RLNG to domestic sector to meet shortfalls of highest prioritised domestic sector in light of federal government directions.

“This exposes SNGPL to non-supply on account of lesser supply of RLNG volumes against FGOs as it may not be possible for SNGPL to meet FGOs of three GPPS even if SNGPL meets the overall demand of power sector,” said Deputy Director (Tech) Directorate General of Gas.

He further contended that in case LNG is not procured as per SNGPL’s requirements, the exposure on account of non-supply against FGOs shall increase further during December 2023 and January 2024. Therefore, downward revision of FGOs of three CPPs for months of November 2023, December 2023, January 2024 and February 2024 is required.

The GPPs; however, may increase the FGOs in other months of 2024 to meet their annual dispatches required under their respective Power Purchase Agreements (PPAs). In view of the position, forecast by M/s SNCPL, Power Division has been requested to advise the concerned for downward revision of FGOs of GPPS so that financial implications, if any, to either party may be avoided.

Copyright Business Recorder, 2023

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