Fuel price adjustment row: SECL has refused to pay dues to SNGPL?

ISLAMABAD: M/s Sapphir Electric Power Company Limited (SECL) is said to have refused to make payment of outstanding amount to Sui Northern Gas Company Limited (SNGPL) against LNG supply in May 2015 unless Nepra determines its fuel price adjustment based on OGRA’s clarification.

SECL has established 225-MW (gross) with net capacity of 209-MW combined gas-fired power plant on the basis of Gas Supply Agreement (GSA) with SNGPL signed on January 24, 2007.

Both companies; i.e., SNGPL and SECL are fighting with each other on payment of fuel (gas) supply in May 2015.

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The power company, in a letter to SNGPL referred to the Gas Supply Agreement of January 24, 2007, adding that capitalised terms used in the letter, unless defined herein, shall have the same meanings as ascribed in the GSA.

M/s SECL has also referred to SNGPL letter of August 06, 2024 whereby the gas utility company requested the power company to pay the outstanding amount for the month of May 2015 based on the RLNG price determined by OGRA for the month of April 2015 in view of OGRA’s clarification vide its letter of November 23, 2020.

According to the power generation company, as already communicated to SNGPL through several communications, Nepra’s fuel price adjustment for May 2015 is necessary in view of OGRA’s said clarification, adding that the company submitted its requests in this regard to the power sector Regulator many times.

The power generation company, in its latest letter reminded SNGPL that the latter is aware of the request of January 5, 2023 to NEPRA for fuel price adjustment based on OGRA’s clarification.

On January 11, 2023, Nepra responded as follows: “reference is made to your request for revision of Fuel Cost Component (FCC) on RLNG for May 2015 in the email and attached letters. It has already been clarified that notification of OGRA determined RLNG price for the relevant period is missing. Therefore, it is advised to the company to re-submit your request along with the Oil & Gas Regulatory Authority determination for RLNG Price of May 2015.”

Referring to SNGPL’s letter of August 6, 2024, SECL apprised the former that it inadvertently missed out the response of Nepra of January 11, 2023.

Concluding the letter, Faisal Zia Siddiqui, Group Head Energy Business SECL, cautioned the top brass of gas utility company that SECL could not legally make the payment of May 2015 unless Nepra makes its fuel price adjustment based on OGRA’s clarification. In this regard, SECL is following up with Nepra and will revert to the gas company as soon as Nepra makes its fuel price adjustment based on OGRA’s clarification. The company also clarified that all its rights are expressly reserved.

Copyright Business Recorder, 2024