Ministry bent upon importing LNG to cut power generation cost

In opposition to the Ministry of Water and Power''s plan to put a cap on import of Liquefied Natural Gas (LNG) to power sector, Ministry of Petroleum and Natural Resources is bent upon importing LNG to bring down the electricity generation cost by 17 percent, an official privy to developments told Business Recorder.
The official further revealed that to counter the energy crunch, the government has decided to allocate 200 mmcfd LNG to power sector to run inefficient plants, presently running on furnace oil. Through this replacement electricity generation cost would come down by 17 percent, he maintained.
Based on a plan to cap consumption of different fuel sources for power generation, Ministry of Water and Power has proposed limiting the establishment of new LNG-based power plants. Its argument presented to Cabinet Committee on Energy held in November 2016: in the event of absence of re-gasified LNG, the power plants would have to be run on high-speed diesel and the price differential between the two would have to be picked up by the federal government. Ministry of Petroleum and Natural Resources have argued that first a study should be undertaken to determine the sustainability of indigenous sources such as local gas before capping imported fuel source.
Ministry of Water and Power has projected electricity surplus by 2022 and based on that it maintains that there is a need to put a cap on the use of imported fuel with hydroelectric power''s share rising to 36 percent in total electricity production, furnace oil 12 percent, LNG 10 percent, renewable energy 9 percent, nuclear energy 9 percent, locally produced gas 8 percent, local coal 8 percent and imported coal 8 percent.
On June 28, 2016, Economic Coordination Committee (ECC) of the cabinet approved the new implementation agreement for three LNG-fired power plants. The implementation agreement made it binding for the three public sector power plants to produce 3,600 megawatts of electricity. The government is working on three LNG-based power plants being set up in Punjab to ease energy shortages there. It is also working on a second LNG terminal in Karachi, which will start running before June this year.