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ISLAMABAD: M/s Engro Powergen Qadirpur Limited (EPQL) has reiterated its interest in purchase of 50 MMCFD low BTU gas from PPL’s Kandhkot Field for its complex ‘as and when available basis.’

In a letter to Imran Abbasi, CEO/ MD Pakistan Petroleum Limited (PPL), CEO EPQL, Sameen Akhtar referred to previous correspondence on “expression of interest for allocation of gas from Kandhkot gas field” and confidentiality agreement signed between WPQL and PPL on February 22, 2023.

EPQL has also resubmitted its Expression of Interest (EoI) for purchase of upto 50 mmcfd gas from Kandhkot gas field to be utilized in operating its power generation complex located in Qadirpur, Ghotki, Sindh.

By using Kandhkot gas, Qadirpur plant can help Pakistan save $2bn: CEO Engro Powergen Qadirpur

Engro Powergen Qadirpur Limited, is a public listed company, incorporated in Pakistan, setup a 217 MW combined cycle power plant near Qadirpur.

The primary source of fuel for the plant is low BTU Permeate Gas supplied from OGDCL’s Qadirpur gas field. The project started commercial operations on March 27, 2010 and since then, the Company has supplied over 18 billion electricity units to the national grid.

Gas supply from Qadirpur gas field is depleted and EPQL entered Gas Insufficiency Phase in 2018. Currently, the Company makes its plant available on its secondary fuel i.e. High-Speed Diesel (HSD), up to the extent of shortfall of permeating gas and is actively exploring alternate sources of local gas supply to meet the shortfall in fuel requirement, which is around -25000 MMBtus/day currently; meanwhile over 43,000 MMBtus/day are required for full base load operations.

EPQL has been issued an electricity generation licence by the National Electric Power Regulatory Authority (NEPRA). In addition to this, a Power Purchase Agreement is in place, pursuant to which Central Power Purchasing Agency (Guarantee) Limited purchases the energy generated from EPQL’s power plant. EPQL has all relevant regulatory approvals for operating the said power generation plant and sell electricity thereon.

According to CEO EPQL, the company has received demand on gas throughout the year and the project has the potential to generate -19 billion units for its remaining PPA term. The Company is exploring alternate indigenous fuel sources to meet the gas shortfall. Hence, it submits an EoI for purchase of up to 50 mmscfd gas from PPL’s Kandhkot gas field, subject to technical due diligence and regulatory approvals.

CEO is EPQL is of the view that Kandhkot gas is a source of low BTU gas with a high sulfur content like the permeate gas currently being utilized by EPQL. Since the Company’s Complex has been specifically designed to utilize low BTU gas with high sulfur content, and it is just 30 KM away from Kandhkot gas field, supplementing the Qadirpur gas supply with Kandhkot gas shall enable PPL to start earning revenue with the least amount of construction time and cost.

For this purpose, EPQL reiterates its expression of interest in the allocation of Kandhkot gas to EPQL’s Complex and submits that such allocation be on “as-and-when available” basis. Please note that this EOI is indicative only for further discussion. The terms of the transaction will be finalized in the agreement to be executed between EPQL and PPL, if EPQL enters into a definitive agreement.

Copyright Business Recorder, 2024

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