Power plants at mouth of gas fields to produce 1,000MW

Petroleum ministry makes case for setting up such units.

Zafar Bhutta November 11, 2014

ISLAMABAD: The Ministry of Petroleum and Natural Resources has made a strong case for installation of power plants at the mouth of gas fields that will lead to production of 1,000 megawatts of electricity, reduce outages and add Rs100 billion to the value of national economy.

Speaking to a meeting of the cabinet on October 31, Federal Minister for Petroleum Shahid Khaqan Abbasi said the policy framed for power generation close to gas fields would help increase energy production.

The Economic Coordination Committee (ECC) of the cabinet has already endorsed the policy. Acute shortage of electricity is said to erase three percentage points off economic growth every year in addition to plaguing the entire energy chain.

“Pumping of gas into pipelines from a new well takes two and a half years, but by developing a power unit close to the well, electricity can be produced immediately,” Abbasi said, adding this initiative would have a positive impact of Rs100 billion on the national economy.

He pointed out that in addition to domestic gas, re-gasified imported liquefied natural gas (LNG) would be consumed for power production. An estimated 600 million cubic feet of LNG per day (mmcfd) will generate 3,600 megawatts of electricity.

An LNG terminal with a capacity of handling 400 mmcfd is being set up in Karachi on a fast track, which will start functioning in the next three months. Tender for another 400-mmcfd terminal has been issued and is being pursued vigorously.

Abbasi stressed that the Petroleum Policy 2012 had been implemented after obtaining approval of the Council of Common Interests (CCI). Under the policy, 44 new exploration agreements have been signed whereas 137 wells have been drilled and in the last 17 months 37 oil and gas discoveries have been made.

Oil production has hit the peak at 98,980 barrels per day (bpd). Against a depletion of 19,000 bpd, 30,000 bpd has been added, causing a positive financial impact of Rs20 billion per year.

In the case of gas production, compared to a depletion of 490 mmcfd, 500 mmcfd has been added and the positive financial impact is calculated at Rs10 billion per year.

Abbasi also told the cabinet that gas supply had been increased to fertiliser plants that eventually benefitted the farmers. He said gas infrastructure development cess (GIDC) had fetched Rs150 billion per year and a merit-based gas connection policy had been pursued. Apart from this, he added, discriminatory allocation of liquefied petroleum gas (LPG) had been stopped.

Published in The Express Tribune, November 12th, 2014.

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