National Electric Power Regulatory Authority (Nepra) is facing a catch-22 with respect to approval of generation licence for RLNG-fired 1000- 1500 MW Quaid-e-Azam Thermal Power Plant Limited (QATPL) at Bhikki, Sheikhupura, as the Punjab and federal governments want to award the generation licence immediately whereas Sindh is urging deferment of licence till resolution of incidental and ancillary matters are deliberated and decided at the Council of Common Interests (CCI).
This was the crux of a public hearing held in Nepra on Tuesday presided over by Chairman Nepra, Brigadier Tariq Saddozai (retired). Member Nepra Balochistan, Major Haroon Rashid(retired) and Member Sindh Masood ul-Hasan Naqvi were present in the hearing whereas Member Punjab, Khawaja Naeem and Member KPK Hamayat Ullah Khan were absent. Chief Executive Officer (CEO), QATPL, Ahad Khan Cheema with his team, Managing Director PPIB, Shah Jahan Mirza, senior officials of Petroleum Ministry and Tariq Ali Shah, Director (Oil and Gas) Energy Department Sindh represented their respective departments. However, KPK did not send any official to present its case.
Chief Minister Punjab Shahbaz Sharif recently lashed out at Nepra for what he said delaying tariff applications of new power plants. QATPL conducted a bidding process with an estimated capacity of 1500MW; however, subsequently after the bidding process the capacity of the project has now been determined at 1156MW (Net)/ 1180MW (Gross). For this capacity the gas required would not exceed 200 MMCFD.
CEO, QATPL, Ahad Cheema, gave detailed answers to questions raised by Nepra in writing which are as follows: (i) Is the project justified considering the fact that a considerable number of imported and local coal based projects are being set up in the south of the country - the generation of which is supported to be used in the centre and north of the country? (ii) natural gas, electricity and all related incidental or ancillary matters appear at entry No 2,4& 18, Part II of the Fourth Schedule of the Constitution of Pakistan. Has the mandatory approval of the competent forum like ie Council of Common Interests been obtained for the project or not? (iii) Currently, there is no dedicated transmission line for RLNG in the country then how the required fuel will be delivered to the project site to operate the proposed generate facility/ thermal power plant? (iv) Will there be any swapping of the imported RLNG with indigenous natural gas being extracted from Sindh (including Zamzama, Dadu, Kandanwari and Sawan fields). Has the province of Sindh given its consent to the proposed arrangements? (v) Are the required arrangements/agreements etc for the import and continuous supply for the RLNG to the proposed generation facility/ thermal power plant are in place or otherwise? (vi) Will the project be utilising pipeline for transportation of RLNG to the site of the project or some new infrastructure will be laid? If new infrastructure is to be laid, will the same be in place before the completion time of 27 months of commercial operation of the project? (vii) the project has an allocation of 200 MMCFD of RLNG. Will the said allocation be sufficient to produce the envisaged 1500 MW of electric power to be generated?
Ahad Cheema argued that QATPL does not require CCI's approval because, as per the Constitution, CCI is required to formulate and regulate policies in relation to matters in Part II of Federal Legislative List. By no stretch of the imagination the same can be inferred that the subject project, or such a project, would be required to first seek CCI's approval. The project is being processed and regulated under the existing applicable legal/regulatory framework, under the Constitution.
CEO QAPTL was of the view that the Bhikki Power Plant has already got firm allocations of RLNG (imported) supply from the SNGPL. The Gas Supply Agreement (GSA) between Quaid-e-Azam Thermal Power (Pvt) Ltd and SNGPL has also been finalised. Unlike natural gas, wherein the province in which a well-head of natural gas is situated shall have precedence over other parts of Pakistan in meeting the requirements from that well-head, there is no such impediment on imported gas/RLNG. The allocation of imported gas/RLNG is merely a commercial decision of the gas supply companies. Specifically with regard to the contention, Ministry of Petroleum has also averred that "the jurisdiction of CCI is limited to natural gas production from the well head situated in the territorial jurisdiction of province while RLNG being an imported product doesn't fall within the jurisdiction of CCI and is a federal matter". Q ATPL also endorses the aforesaid position. Moreover, as per entry 27 of Part I of Federal Legislative List in the Fourth Schedule in the constitution, the import/export across custom frontiers is the exclusive domain of Federal Government.
Bhikki Power Plant will be run on imported RLNG, as confirmed by the relevant agencies, hence, being an internal arrangement of the gas supply companies, the swapping, if any, will be against equivalent import of RLNG and energy security as apprehended will not be compromised. The matter is a commercial decision of the gas supply companies and does not warrant the alleged apprehension.
CEO QAPTL argued that RLNG is a fuel not natural gas so Nepra in not empowered to discuss this issue in hearing. Managing Director, PPIB Shah Jahan Mirza fully supported the viewpoint of CEO QAPTL saying that since RLNG is not natural gas hence Nepra is not authorised to raise this point. Chairman Nepra argued that the purpose of public hearing is to listen to all the stakeholders' viewpoints.
Tariq Ali Shah, the representative of Sindh government, in his eight-page reply, stated that the Sindh government supports all necessary measures to mitigate electricity shortfall be it in the form of electricity generation through coal, natural gas, RLNG through dedicated transmission and distribution lines, furnace oil, diesel or renewable energy sources.
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