Finding a solution: ECC to try and settle gas row between centre, K-P
Province claims right over consumption of gas produced in its area.
ISLAMABAD:
The federal government, run by the Pakistan Muslim League-Nawaz (PML-N) and the Khyber-Pakhtunkhwa (K-P) administration, led by the Pakistan Tehreek-e-Insaf are engaged in a row over gas supply as the latter has refused to provide the commodity to other parts of the country.
According to sources, the K-P government wants to consume the gas being produced in the province and is not ready to share it with other provinces, whereas the federal government is not committing any supplies to power plants in the province.
The centre has also told the provincial government that it will not bear any risk associated with the power plants because of gas shortage.
“The matter has been placed before the Economic Coordination Committee (ECC) of the cabinet for arriving at a settlement,” a source told The Express Tribune.
Sources said K-P had been consistently asking the Ministry of Petroleum and Natural Resources to allocate 100 million cubic feet of gas per day (mmcfd) for setting up combined-cycle gas turbine (CCGT) power projects in the province under Article 158 of the Constitution.
The article says “the province in which a wellhead of natural gas is situated shall have precedence over other parts of Pakistan in meeting the requirements from the wellhead subject to commitments and obligations as on the commencing day.”
The matter of gas allocation has been raised by the K-P government at various forums. A series of meetings have also been held between the province and the petroleum ministry.
“On all occasions, the ministry has categorically told K-P that no firm gas allocation can be committed in view of scarcity in the system due to the declining reserves,” the source said.
Seasonal demand shift
At present, average gas supply from various sources in K-P is 370 mmcfd against average consumption of 260 mmcfd. Contrary to the summer, the province fully consumes the gas in winter.
Thus, the surplus of 110 mmcfd will only be available in summer months if the demand stays at the existing level, which is remotely possible.
According to the sources, the petroleum ministry and K-P will try to settle the matter before the ECC, keeping in view the sanctity of Article 158 and commitments from higher offices.
The ministry proposes that the gas produced in K-P may be earmarked to the province for setting up CCGT power projects subject to the condition that 50 mmcfd may be allocated from January 1, 2016 and an additional 50 mmcfd from January 1, 2018.
The power projects will be dual-fuel based and the supplies will be subject to gas load management. All risks and costs associated with the setting up of power plants will be borne by the K-P government. The province will also complete a bankable feasibility study, land acquisition, regulatory approvals, financial close and engineering, procurement and construction (EPC) tender process.
Published in The Express Tribune, November 29th, 2014.
The federal government, run by the Pakistan Muslim League-Nawaz (PML-N) and the Khyber-Pakhtunkhwa (K-P) administration, led by the Pakistan Tehreek-e-Insaf are engaged in a row over gas supply as the latter has refused to provide the commodity to other parts of the country.
According to sources, the K-P government wants to consume the gas being produced in the province and is not ready to share it with other provinces, whereas the federal government is not committing any supplies to power plants in the province.
The centre has also told the provincial government that it will not bear any risk associated with the power plants because of gas shortage.
“The matter has been placed before the Economic Coordination Committee (ECC) of the cabinet for arriving at a settlement,” a source told The Express Tribune.
Sources said K-P had been consistently asking the Ministry of Petroleum and Natural Resources to allocate 100 million cubic feet of gas per day (mmcfd) for setting up combined-cycle gas turbine (CCGT) power projects in the province under Article 158 of the Constitution.
The article says “the province in which a wellhead of natural gas is situated shall have precedence over other parts of Pakistan in meeting the requirements from the wellhead subject to commitments and obligations as on the commencing day.”
The matter of gas allocation has been raised by the K-P government at various forums. A series of meetings have also been held between the province and the petroleum ministry.
“On all occasions, the ministry has categorically told K-P that no firm gas allocation can be committed in view of scarcity in the system due to the declining reserves,” the source said.
Seasonal demand shift
At present, average gas supply from various sources in K-P is 370 mmcfd against average consumption of 260 mmcfd. Contrary to the summer, the province fully consumes the gas in winter.
Thus, the surplus of 110 mmcfd will only be available in summer months if the demand stays at the existing level, which is remotely possible.
According to the sources, the petroleum ministry and K-P will try to settle the matter before the ECC, keeping in view the sanctity of Article 158 and commitments from higher offices.
The ministry proposes that the gas produced in K-P may be earmarked to the province for setting up CCGT power projects subject to the condition that 50 mmcfd may be allocated from January 1, 2016 and an additional 50 mmcfd from January 1, 2018.
The power projects will be dual-fuel based and the supplies will be subject to gas load management. All risks and costs associated with the setting up of power plants will be borne by the K-P government. The province will also complete a bankable feasibility study, land acquisition, regulatory approvals, financial close and engineering, procurement and construction (EPC) tender process.
Published in The Express Tribune, November 29th, 2014.