ISLAMABAD: Engro Powergen Qadirpur Limited (EPQL) has approached the Oil and Gas Development Company Limited (OGDCL) for the allocation of 10 MMCFD of gas from the newly discovered Chak-202-1 field, located in District Rahim Yar Khan, Punjab.
According to NewzShewz sources, Engro Powergen has written to the Managing Director/CEO of OGDCL, Mr. Ahmed Hayat Lak, referencing OGDCL’s announcement on the Pakistan Stock Exchange on August 13, 2024, regarding the gas discovery at Chak-202-1. In response, EPQL has submitted an Expression of Interest (EoI) to purchase up to 10 MMCFD of gas from the Chak-202-1 field, initially during the Extended Well Testing (EWT) phase and subsequently once the well enters the production phase. This gas would be utilized to fuel EPQL’s power generation complex in Qadirpur, District Ghotki, Sindh.
EPQL is a publicly listed company in Pakistan that operates a 217 MW combined cycle power plant located near Qadirpur, District Ghotki. The plant primarily uses low-BTU permeate gas supplied from OGDCL’s Qadirpur gas field. Commercial operations at the plant began on March 27, 2010, with an operational lifespan of 25 years.
Since its inception, EPQL has generated over 18.5 billion electricity units for the national grid by utilizing low-BTU, high-sulfur permeate gas from the Qadirpur gas field, which was previously being flared. This has resulted in savings of approximately PKR 80 billion in the national electricity basket by providing low-cost electricity. Furthermore, EPQL’s electricity generation has led to import substitution worth around $1.5 billion. By using permeate gas, EPQL has also generated over Rs. 93 billion in revenue for SNGPL and OGDCL from high-sulfur, low-BTU gas.
EPQL notes that the supply from the Qadirpur gas field is now in a depletion phase. Currently, EPQL operates its plant primarily on permeate gas and, when there is a shortfall, uses high-speed diesel. The shortfall in permeate gas supply is approximately 25,000 MMBtu per day and is expected to increase to 39,000 MMBtu per day over the plant’s remaining operational life. Consequently, EPQL is exploring alternate indigenous fuel sources to meet the gas shortfall.
EPQL holds an electricity generation license issued by the National Electric Power Regulatory Authority (NEPRA) and has a Power Purchase Agreement (PPA) with the Central Power Purchasing Agency (Guarantee) Limited, which purchases the energy generated by EPQL’s power plant. The company is fully licensed and approved to operate the plant and sell electricity.
EPQL’s plant has the capacity to generate up to 19 billion units of electricity for the remaining term of its PPA. In light of this, the company is actively seeking additional indigenous fuel sources to address the ongoing gas supply shortage. Therefore, EPQL has submitted an EoI to purchase up to 10 MMCFD of gas from the Chak-202-1 well, initially during the EWT phase and later, during the production phase after testing is completed, subject to technical due diligence and regulatory approvals.
EPQL is already connected to the Qadirpur gas field, operated by OGDCL, which is integrated into the main gas pipeline network. Gas from the Chak-202-1 well could potentially be supplied to EPQL directly or through a swap arrangement once the well is connected to the existing pipeline network. The additional gas supply from Chak-202-1 would complement the permeate gas from Qadirpur, ensuring maximum utilization of EPQL’s power plant and delivering substantial benefits for power consumers, along with additional revenue for OGDCL.
EPQL emphasizes that the EoI is an initial indication of interest for further discussions. The final terms of the transaction will be determined in a definitive agreement between EPQL and OGDCL, should they enter into a formal contract. Ends
