ISLAMABAD: The Board of Private Power and Infrastructure Board (PPIB) has reportedly granted a No Objection to the Supplemental Agreement (SA) of the Power Purchase Agreement (PPA) for Engro Powergen Qadirpur Limited (EPQL), as per the Negotiated Settlement Agreement (NSA), sources in PPIB told Business Recorder.
Sharing the details, sources said Engro Powergen Qadirpur Limited operates a dual-fuel power generation facility with a gross capacity of 226.53MW (net 217.3 MW). The plant, located in Ghotki, Sindh, primarily uses permeate gas from the Qadirpur gas field, while High-Speed Diesel (HSD) serves as the secondary fuel.
EPGL secures additional gas supply for power plant
To formalize the project framework, a Power Purchase Agreement (PPA) was executed between the company and NTDC on October 26, 2007, and an Implementation Agreement (IA) was executed on October 29, 2007, between the company and PPIB on behalf of the Government of Pakistan (GoP). A guarantee to backstop the payment obligations of the power purchaser was issued to the company by the GoP on April 30, 2008. These agreements, together with other project documents and the applicable legal and regulatory framework, constitute the overall transaction structure governing the project.
At the time of commissioning, permeate gas was considered the primary fuel source, with the expectation that this resource would begin depleting by 2015. In such a scenario, the commingling of fuel with an alternate source would be required to ensure continued operations. However, due to the continued and extended availability of permeate gas, the actual need for commingling only arose in 2018.
Under the terms of the IA, EPQL was obligated to submit a Gas Depletion Mitigation Plan (GDMP) proposing Gas Depletion Mitigation Options (GDMOs), to be agreed upon by the GoP. Currently, the plant is being operated in mixed mode, utilising both permeate gas and HSD, while the finalization of the GDMP/ GDMO remains under review and is still pending.
In the meantime, the company identified low-BTU PEL gas as an additional alternative fuel for plant operations. This was intended as an interim measure to maintain reliable generation. For this purpose, the company applied to Nepra for an amendment to its generation licence and a tariff modification in the Fuel Cost Component (FCC) to reflect the use of PEL gas. Nepra subsequently approved the amendment to the company’s generation licence on December 18, 2023, permitting the use of PEL gas. Thereafter, on February 20, 2024, Nepra also approved the tariff for PEL gas.
In parallel, the company, CPPA-G, and GoP entered into an amendment agreement on February 17, 2025 — the Negotiated Settlement Agreement (NSA) — under which the parties, inter alia, mutually agreed to amend the existing PPA and IA on certain specified terms and conditions.
In this regard, through its letter dated August 18, 2025, the company informed PPIB that a draft Supplemental Agreement had been negotiated and agreed upon with CPPA-G, and that it had been duly approved by CPPA-G’s Board. In the same letter, the company requested PPIB/ GoP’s No Objection to the Supplemental Agreement under Section 18.3 of the IA dated October 29, 2007.
For processing the company’s request, PPIB, through its letter dated September 9, 2025, sought certain clarifications from CPPA-G regarding the implications and execution of the Supplemental Agreement. CPPA-G responded through its letter dated September 23, 2025. However, after reviewing the response, PPIB noted that CPPA-G’s clarifications were inadequate in addressing several key issues and queries originally raised. These points were documented, and a way forward was suggested to save time and effort.
In light of the foregoing, a draft No Objection to the Supplemental Agreement was prepared by PPIB. Similarly, to give effect to the amendments contemplated in the NSA, draft amendments to the IA and the government guarantee were also prepared for consideration and approval by the Board.
In its proposal, PPIB requested the Board, in its previous meeting, to approve the issuance of the No Objection to the PPA Supplemental Agreement. The Board was also requested to approve the draft amendments to the IA and guarantee, to be executed simultaneously or prior to the issuance of the No Objection.
The sources said the PPIB Board has accorded approval to PPIB’s proposal aimed at facilitating the company’s operations in line with the NSA.
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