Gas supply to be diverted from Engro to Guddu plant

Govt will provide gas to fertiliser manufacturer from alternative sources

ISLAMABAD:

Petroleum and Natural Resources Minister Shahid Khaqan Abbasi has said that gas supply will be diverted from Engro Fertilizers to the Guddu power plant in December this year in a bid to increase electricity production from the plant.

“The fertiliser manufacturer, however, will be provided gas from other sources to meet its needs,” said the minister while talking to The Express Tribune.



Earlier, in a meeting chaired by Prime Minister Nawaz Sharif on October 14, the Ministry of Water and Power and the Ministry of Petroleum and Natural Resources got engaged in an argument over diverting gas supply from Engro Fertilizers to the Guddu power plant.



Water and Power Secretary Younus Dagha suggested that 60 million cubic feet of gas (mmcfd) should be withdrawn from Engro Fertilizers and it should be provided to the Guddu plant after December 2015 as envisaged in an agreement.

However, the petroleum minister responded that Engro had formally purchased the gas and it could not be used for other purposes.



Earlier, 60 mmcfd was diverted from the Guddu plant to Engro Fertilizers and the period was extended to December 2015 because of delay in start of operations at the new Guddu plant. In response to the continuous gas supply for one year, Engro offered to install two gas-booster compressors at the power plant with maintenance services.

In the meeting, the petroleum minister briefed the participants about expected gas supply to the Guddu plant in the summer of next year.

At present, 250 mmcfd of gas is being supplied to the plant for producing 747 megawatts of electricity, which will be enhanced by 700MW through additional supply of 100 mmcfd from a new pipeline from the Mari gas field, which will start running in January.



According to the minister, an additional 30 mmcfd will be available depending on repair and maintenance of the existing Sui pipeline. However, the repair work will take six months.

The meeting was told that funding for laying the new pipeline and the repair of Sui pipeline was a major obstacle.

The water and power secretary argued that the Guddu plant needed 215 mmcfd of gas for boosting power generation by 600-700MW by April 2016 and any gas shortage would lead to a decrease in electricity production in the summer of 2016.



Saying that demand for electricity would rise during summer next year, the prime minister gave directives that the required gas should be provided from Sui to the Guddu plant by the end of March 2016.

He also ordered that all legal avenues should be tapped to expedite the repair work. A mass awareness campaign should be undertaken for energy conservation, he said.

A representative of the Ministry of Petroleum aired concern over the financing gap that could hamper repair work on the Sui pipeline. “The completion of repairs could be possible in six months, therefore, it will be difficult to meet the deadline of March 2016,” he said.



The water and power secretary suggested that his division could arrange funds from its resources to meet the repair expenses within the set timeframe.

The meeting participants decided that the Ministry of Petroleum would ensure the supply of required gas volume of 215 mmcfd to the Guddu power plant by March next year.

It would complete construction of the pipeline from Mari field to the Guddu plant by the end of January next year and would also come up with estimates for the repair of pipeline from Sui to the power plant.

The petroleum ministry will provide the expenses estimates to the water and power ministry for arranging necessary funds.

Published in The Express Tribune, November 6^th, 2015.

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