Uch phase-II development project: Power plant project under jeopardy

International Power warns of cancelling 404MW electricity project.

ISLAMABAD:

International Power may shelve a 404-megawatt power project after the Oil and Gas Development Company Limited (OGDCL) cancelled a tender for engineering, procurement and construction contract for Uch phase-II development project.

Informed sources told The Express Tribune that International Power Chief Executive Officer Dr Ronald Spiers had sent a letter to the prime minister, making it clear that his company would abandon the project worth millions of dollars if the government failed to award the contract for Uch-II project.

The Uch gas field phase-II project, located in Balochistan, is now under implementation stage. Around 300 million cubic feet of gas per day will be produced from this field and used for producing 404 megawatts of electricity.

In the letter, Spiers said that his company had already committed $470 million for the project which was of great importance to Pakistan.

On the other hand, OGDCL’s top management decided to cancel the tender for contract of Uch-II project.

OGDCL has been operating phase-I of Uch gas field and supplying gas to Uch power plant that is producing 586 megawatts per day.

With phase-II now under implementation, an additional 300 million cubic feet of gas per day will be produced from this field and used for producing additional power of 404 megawatts.

The Asian Development Bank (ADB) has approved $100 million in loan for the construction of the 404-megawatt Uch-II power plant which is expected to be completed by 2013. OGDCL under a gas sales agreement will provide gas to the power plant for electricity generation.

Published in The Express Tribune, May 10^th, 2011.