The Ministry of Petroleum and representatives of fertiliser companies and Independent Power Plants (IPPs) met on Thursday to finalise an agreement to divert 40 million cubic feet per day (mmcfd) of gas from the power sector to fertiliser plants.
Under the agreement, power companies will use high-speed diesel that will be subsidised by the fertiliser sector and the federal government. Total price differential between gas and diesel will be over Rs6 billion which will be shared by the government and fertiliser companies.
Four power plants including Orient, Halmore, Saif and Sapphire had been allocated 152 mmcfd of gas, of which 40 mmcfd will be diverted to fertiliser units.
The fertiliser industry will pay Rs4.65 billion as compensation cost to the power plants for using their share of gas from May to June this year. The federal government will pay in advance Rs1.55 billion on behalf of power plants to Pakistan State Oil for arranging 854 tons of diesel per day.
The Economic Coordination Committee has already approved a summary moved by the Ministry of Petroleum.
Case filed against SNGPL
Meanwhile, Engro Fertiliser has filed a case against Sui Northern Gas Pipelines Limited (SNGPL) in the Sindh High Court over cut in gas supply to its new plant in Daharki. The court had earlier directed SNGPL to continue gas supply to the plant on the basis of Article 158 that barred the company from reducing supplies in Sindh. “SNGPL was providing 80 mmcfd of gas to the plant that has now been stopped,” said a company official.
Published in The Express Tribune, May 20th, 2011.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ