Daily Times

ISLAMABAD: The Sindh government has shown serious reservations over the use of liquefied natural gas (LNG) in power plants being set up in Punjab.

The National Power Parks Management Company (Private) Limited (NPPMCL), owned by the government of Pakistan, had filed a petition before the power regulator to approve tariff for Re-gasified liquefied natural gas (RLNG)-based power plants on a fast-track basis at Haveli Bahadur Shah, Jhang, and at Balloki.

The proposed projects are based on the combined cycle technology, with 1207.9MW and 1198.55MW net generation capacity, respectively.

In its comments submitted to the National Electric Power Regulatory Authority (NEPRA), the Sindh government said that it had strong reservations over the fuel used for the generation of power by the NPPMCL. The Sindh government believed that the power plants were being powered by illegally swapped natural gas without the consent of the provincial government, jeopardising the energy security of the province.

It said that in the absence of a dedicated RLNG pipeline from Karachi to upcountry, the SNGPL had only been relying on the locally produced natural gas molecules, and not on RLNG molecules. Resultantly, it said, the proposed power plants could not be considered as running on RLNG.

The Sindh government requested the regulator that the petitions of the NPPMCL for approval of generation tariff for RLNG-based power projects may be deferred till swapping arrangement of locally produced gas with RLNG was decided by the Council of Common Interests (CCI) and the government of Sindh.

The federal government said that objection by the Sindh government was misleading, baseless and “appears to be used as a delaying tactic”.

Import and export across customs frontiers and inter-provincial trade and commerce was the exclusive domain of the federal government, as enshrined in Entry No 27 of Part-1 of the Fourth Schedule of the Constitution of the Islamic Republic of Pakistan, 1973.

Under the said constitutional provision, the import of RLNG as well as the inter-provincial trade, including gas, was the exclusive domain of the federal government. The federal government said that it appeared that the Sindh government was relying on the “precedence of a province in which wellhead of natural gas was situated in meeting the requirements from the wellhead”, over other parts of Pakistan, as given under Article 158 of the constitution.

In response to this comment, the federal government said that such precedence was not unfettered but “subject to commitments and obligations as on the commencing day”.

The company had sought a levelised tariff for Haveli power plant at Rs 6.37 per unit for RLNG operations and Rs 10.36 on HSD for combined cycle mode, and Rs 8.06 per unit for RLNG and Rs 13.06 per unit on HSD under simple cycle mode. The total cost of the project has been estimated at $913.41 million.

However, the authority allowed a levelised tariff of Rs 6.11 per unit for RLNG operations and Rs 9.60 per unit for HSD on combined cycle mode. Under the simply cycle, NEPRA approved a levelised tariff of Rs 7.38 per unit for HSD operations.

The company had also sought a levelised tariff of Rs 6.7 per unit on RLNG and Rs 10.34 per unit on HSD for Balloki power plant. For the simple cycle, tariff was proposed at Rs 8.05 for LNG operations and Rs 12.93 for diesel operations. The total cost of the project was estimated at $864.7 million.

The power regulator approved the generation tariff of the NPPMCL for its 1,198.55MW (net) power project on RLNG/HSD at Balloki for combined cycle and simple cycle operations. Levelised tariff for combined cycle has been approved at Rs 4.82 for RLNG and Rs 8.48 for HSD. For simple cycle, it has been approved at Rs 7.38 per unit for RLNG operations.