‘RLNG: Supply glut or policy failure?’: KE’s response

It is important to clarify certain points and provide factual context to the assertions made. The article’s assertions are factually incorrect. K-Electric (KE) does not contract directly with international RLNG suppliers, rather, it utilizes RLNG procured under existing government contracts through its Gas Sales Agreement with Pakistan LNG Limited, the terms of which have been appropriately disclosed to Ogra and Nepra.

RLNG: Supply glut or policy failure?—II

Therefore, the responsibility for managing RLNG procurement, including cargo diversions, rests solely with the relevant government entities. It is inappropriate to attribute this responsibility to KE, whose role is limited to utilizing the RLNG as per Gas Sales Agreement.

We would like to highlight that commissioning of KE’s RLNG plant was not out of corporate preference but as a result of actions and policy of government. Following 2009, there had been drastic reduction in local gas supply to KE and since 2018 the major portion of supply from SSGC comprised of imported RLNG and till recent amendments a major portion of local gas was being supplied to captive consumers.

The matter of inadequate supply of indigenous gas is also a sub judice matter and being contested in courts. Furthermore, KE’s earlier plan to add a 700 MW Coal Plant was set aside at the government’s request due to surplus national grid capacity.

Based on above, commissioning an efficient RLNG based plant was the only viable option to reduce reliance on the expensive legacy BQPS-I and prevent load-shedding. Since its commissioning, BQPS-III has not only avoided outages but also saved over PKR 100 billion in fuel costs for government and consumers due to its superior efficiency, ranking it amongst the most efficient power plants in Pakistan.

Moreover, KE’s Vision 2030 commits to 30 percent renewable sourcing, in alignment with national energy policy. Three projects — the 220 MW Dhabeji wind-solar hybrid and 150 MW solar projects at Winder and Bela in Balochistan — have received Nepra’s approval.

Dhabeji’s tariff, determined via open competitive bidding, is the lowest levellised solar-hybrid price cleared in Pakistan to date, ensuring more affordable power once operational. Together, these projects will shift the portfolio toward lower-cost, zero-fuel-cost energy. ‘Under Vision 2030’, KE targets 30 percent renewables, a 30 percent cut in outages, and 95 percent load-shedding exemption city-wide, backed by USD 2 billion in fresh investment.

RLNG: Supply glut or policy failure?—I

KE’s generation cost differs from CPPA-G because KE does not have access to nuclear or large hydropower resources, nor is it supplied with sufficient indigenous or low-Btu gas to run its plants. Had KE received the committed supply of indigenous gas, its fuel costs, and thus electricity generation costs, would have been lower.

Finally, it is important to note that K-Electric’s electricity consumers are not charged a higher price for electricity; customers nationwide pay base tariff and quarterly adjustments according to the uniform tariff policy determined by the Government of Pakistan. The only variation lies in Fuel Cost Adjustment (FCA) charges, which importantly have consistently remained lower than those charged by XWDISCOs nationwide.

Copyright Business Recorder, 2025