ISLAMABAD : The Kot Addu Power Company (KAPCO ) has approached Sui Northern Gas Pipeline Company (SNGPL) for resumption of RLNG to it to avoid operation of plant on expensive furnace oil.
In a letter to Managing Director SNGPL, Chief Executive Officer (CEO), KAPCO, Shahab Qader Khan stated that the power company formally urges SNGPL to reconsider and resume RLNG supply to KAPCO Complex on an immediate basis.
According to him, as per public domain reports, the power sector’s RLNG consumption has declined by approximately 28% below committed volumes, resulting in surplus RLNG in the transmission network.
Mr. Khan stated that paradoxically, KAPCO-an established and efficient IPP with demonstrated offtake track record–is being denied RLNG supply, despite having already procured over Rs 250 billion worth of RLNG in the past. However, he has admitted that the current denial is linked to a disputed Late payment Surcharge (LPS) of Rs 2.2 billion.
He has submit that principal dues have been settled. LPS disputes were discussed between the relevant officials of the Company and SNGPL, however, both parties were unable to reach a resolution.
He was of the view that such disputes should not form the basis for unilateral suspension of operational fuel supply.
” In the absence of RLNG, NPCC will be compelled to dispatch KAPCO on LSFO, which is substantially more expensive leading to an avoidable burden on the power sector and end consumers,” Mr. Khan continued.
CEO KAPCO further stated that the power company is open to resolving the LPS dispute including through negotiations and request that SNGPL: (i) immediately restore RLNG supply to KAPCO, pending resolution of the LPS dispute ; and (ii) coordinate with relevant stakeholders to ensure aligned fuel supply for merit-based dispatch.
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