SSGC, NTDC seek clearance of dues from K-Electric

Link signing of GSA and PPA to clearance of outstanding Rs253b payments

KARACHI:

Sui Southern Gas Company and the National Transmission & Despatch Company (NTDC) have linked the signing of Gas Supply Agreement (GSA) and Power Purchase Agreement (PPA) with K-Electric to the clearance of their outstanding dues of Rs253 billion.

SSGC wants K-Electric to guarantee the payment of Rs103 billion prior to the GSA while NTDC also needs clearance of its Rs150 billion worth dues, said an official source.

In this regard, a meeting is due next week between the government and K-Electric official to resolve the issue of GSA and PPA, said the official. An SSGC spokesperson said that K-Electric has defaulted Rs115 billion to SSGC.

He said that the company has asked K-Electric to give a plan of paying dues on account of gas supply before entering into the agreement.

A K-Electric spokesperson said, “K-Electric has outstanding receivables of Rs240 billion from the federal and provincial government on principal basis, while the company has to pay Rs13.7 billion to SSGC on a principal basis too.

If K-Electric has to pay mark up on its payables, then on fairness basis the company should also receive mark-up on K-Electric receivables from the government.

We remain consistently in touch with relevant stakeholders for an earliest resolution of any outstanding matters in this regard.”

Pakistan LNG Limited (PLL) and K-Electric signed heads of agreements last October for the supply of 150 MMCFD RLNG to 900MW Bin Qasim Power Station III (BQPS-III) power plant.

The heads of agreement was supposed to be followed by a gas supply agreement in December or January.

PLL will supply up to 150 MMCFD RLNG to these power plants and it will use SSGC’s network for the supply of gas to K-Electric but the gas company has linked the supply of gas with the clearance of outstanding dues.