ISLAMABAD: The Engro Powergen Qadirpur Limited (EPQL) has approached the Power Division for support in expediting the signing of a Supplementary Agreement (SA) to utilise low-BTU indigenous gas from the Badar-1 gas field.
In a letter to the Power Division, EPQL CEO Adeel Qamar stated that the company operates a 225-MW power plant running primarily on permeate gas from the Qadirpur gas field under a Power Purchase Agreement (PPA) signed with the Central Power Purchasing Agency Guarantee Limited (CPPA-G) on October 26, 2007.
Since the commencement of commercial operations in March 2010, the plant has maintained a high position in the Economic Merit Order (EMO) and supplied 18.9 billion units of electricity to the national grid with high gas-based utilisation.
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The EPQL claims that its operations have delivered substantial benefits to electricity consumers and the Government of Pakistan, including: (i) Rs 89 billion in savings through procurement of low-cost electricity;(ii) $1.6 billion in foreign exchange savings by using indigenous gas; and (iii) Rs 96 billion in revenue for fuel suppliers (SNGPL and OGDCL) from the sale of permeate gas that was previously being flared.
“These benefits were only possible due to the extensive cooperation and support from the Government of Pakistan and its departments, including PPIB, CPPA-G, and NTDC,” said Qamar.
To address the declining gas supply from Qadirpur and to enhance the plant’s utilization, EPQL, in collaboration with stakeholders such as PPIB and CPPA-G, explored alternative fuel sources. As a result, NEPRA, in its determination dated February 20, 2024, approved the use of low-BTU gas from the Badar-1 field as an additional fuel source for the EPQL’s operations.
Following NEPRA’s approval, the EPQL entered into an agreement with Petroleum Exploration Limited (PEL) on August 5, 2024, for the supply of 8–13 mmscfd of low-BTU gas from Badar-1.
Subsequently, the EPQL submitted a draft Supplementary Agreement to the PPA for CPPA-G’s review on August 26, 2024, after detailed consultations. However, the company says the matter remains unresolved.
“We note with deep concern that, despite a lapse of 10 months, the matter is still pending with CPPA-G, delaying the opportunity for EPQL to generate additional electricity using low-BTU gas from Badar-1,” Qamar stated.
EPQL says the infrastructure for gas supply from Badar-1 is fully operational, and off-take can begin immediately upon receiving the necessary approvals. The transaction is structured on a Take-and-Pay basis, meaning gas will only be used if it qualifies under the Economic Dispatch Merit Order.
The company estimates that had the approval been granted by October 2024, it could have generated an additional 122 million units of electricity, resulting in:Rs 787 million in potential savings for power consumers, and$9 million in foreign exchange savings.
“We have consistently followed up with CPPA-G and responded promptly to all queries, but the approval remains pending. Given that we are currently in the peak summer season and relying on high-cost imported fuels for electricity generation, it is imperative to finalize the Supplementary Agreement without further delay,” Qamar added.
The EPQL has urged the Power Division to facilitate the earliest possible approval to unlock the economic and operational benefits associated with the project.
Copyright Business Recorder, 2025
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