Punjab power plants: Centre, Sindh govt exchange allegations over use of LNG

Sindh says power plants in Punjab are constructed on illegally swapped gas

ISLAMABAD: The federal and Sindh governments have traded allegations over the use of Liquefied Natural Gas (LNG) in power plants being set up in Punjab.

The National Power Parks Management Company (Private) (NPPMCL), a private limited company wholly owned by the government, had filed a petition before the power regulator to approve tariff for RLNG-based power plant on a fast-track basis at Haveli Bahadur Shah, Jhang and at Balloki. The proposed projects are based on the combined cycle technology with a capacity of net 1,207.90MW and 1,198.55MW 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 regarding the fuel used for the generation of power by the National Power Parks Management Company (Private).



The Sindh government believed that the entire power plant was being constructed on illegally swapped natural gas from Sindh without consent of the provincial government, which, as a result, was jeopardising the energy security of the province.

“In the absence of a dedicated RLNG pipeline from Karachi to upcountry, SNGPL has only been relying on the swapped, locally produced natural gas molecules and not on the RLNG molecule,” it said. “Resultantly, the proposed power plant cannot be considered as running on RLNG.”

Sindh has requested the regulator to defer the petitions of NPMCL for approval of generation tariff for RLNG-based power project at Haveli Bahadur Shah and at Balloki in Punjab till swapping arrangement of locally produced gas with RLNG is decided by the CCI and the government of Sindh, respectively.

Federal govt’s argument

The objection of the Sindh government is misleading, baseless and appears to be used as a delaying tactic, said the federal government.

It said the import and export across customs frontiers and inter-provincial trade and commerce were the exclusive domains 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 is the exclusive power of the federal government.”

The federal government said that it appears that the government of Sindh is relying on the Article 158 of the Constitution according to which “a province in which a wellhead of natural gas is situated shall have precedence over other parts of Pakistan in meeting the requirements from that wellhead.”



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

The company had sought a levelised tariff for Haveli power plant at Rs6.37 per unit for RLNG operations and Rs10.36 on High Speed Diesel (HSD) for combined cycle mode and Rs8.06 per unit for RLNG and Rs13.06 per unit on HSD under the simple cycle mode.

The total cost of the project has been indicated at $913.41 million.

However, the authority allowed a levelised tariff of Rs6.11 per unit for RLNG operations and Rs9.60 per unit for HSD on combined cycle mode. Under simple cycle, Nepra approved a levelised tariff of Rs7.38 per unit for HSD operations.

The company had also sought a levelised tariff of Rs6.7 per unit on RLNG and Rs10.34 per unit on HSD for Balloki power plant. For simple cycle, tariff was proposed at Rs8.05 for LNG operations and Rs12.93 for diesel operations.

Total cost of the project is estimated at $864.7 million.

The power regulator approved the generation tariff for National Power Park Management Company (Private) Limited for its 1,198.555 MW (net) Power Project on RLNG/HSD at Balloki for combined cycle and simple cycle operation.

Published in The Express Tribune, August 11^th, 2016.

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