ISLAMAABD : Engro Powergen Limited (EPQL) has sought support of Power Division for early signing of Supplementary Agreement (SA) for utilization of low BTU indigenous gas from Badar-1 Gas Filed.
According to Chief Executive Officer (CEO), EPQL, Adeel Qamar, the Power Company owns and operates a 225 MW power plant which operates primarily on Permeate Gas from Qadirpur gas field. EPQL has executed a Power Purchase Agreement (PPA) with CPPA-G on October 26, 2007.
Since commencement of commercial operations in March 2010, EPQL has remained high in the Economic Merit Order (EMO) of dispatch and supplied 18.9 billion units of electricity to the national grid operating at a very high utilization factor of on gas.
The Power Company has claimed that this has resulted in the following benefits to electricity consumers and Government of Pakistan: (i) savings of Rs 89 billion as a result of procuring lower cost electricity from EPQL ;(ii) forex savings of $1.6 billion by utilizing indigenous resource ; and (iii) revenue of Rs 96 billion for fuel suppliers (SNGPL/ OGDCL) from sale of Permeate Gas which was previously flared.
” These benefits have only been realized with extensive cooperation and support from Government of Pakistan and associated departments, including PPIB, CPPA-G and NTDC,” said CEO EPQL.
The Power Company has stated that to mitigate the effects of gas depletion at the Qadirpur gas field and to further enhance and optimize the utilization of EPQL power plant, EPQL has been working with stakeholders, including PPIB and
CPPA-G, to find alternate fuel options. In this context, NEPRA has, via determination of February 20, 2024 approved the inclusion of low BTU gas from Badar-1 gas field as an additional fuel source for the operations of EPQL’s Complex and consequently EPQL entered into an agreement with Petroleum Exploration Limited (PEL) for supply of 8-13 mmscfd low BTU gas from Badar-1 gas field. This agreement was signed on August 5, 2024.
On August 26, 2024, and after extensive consultations with CPPA-G, EPQL submitted a draft of the Supplemental Agreement to the PPA for CPPA-G’s review and -approval.
” We note with deep concern that despite a lapse of 10 months, the matter is still pending with CPPA-G, delaying the opportunity for EPQL to generate incremental electricity on low BTU gas from Badar-1,” said Mr. Qamar.
The Power Company is of the view that the infrastructure for supply of Badar-1 gas to EPQL is ready and it can start offtake immediately upon completion of necessary approvals. Moreover, the transaction is on a Take-and-Pay basis and Badar-1 gas will only be utilized if it competitive on the Economic Dispatch Merit Order.
The Power Company has illustrated the potential savings that could have been realized had the requisite approval been received by October 2024.
During this period, EPQL could have generated an additional 122 million units of electricity on this low BTU indigenous gas. This could have resulted in estimated savings of Rs 787 million for the power consumers and forex savings of $9 million.
” We have consistently been following up with CPPA-G for approval and have promptly responded to all queries raised by CPPA-G, but the matter remains pending. Considering the fact that we are in the midst of peak summer season and high cost imported fuels are being utilized for generation of electricity, it is imperative to execute the Supplemental Agreement without further delay and avail the associated economic and operational benefits,” the CEO maintained.
The Power Company has sought Power Division’s support for facilitating earliest completion of necessary approvals in this
regard.
