The primary objective of the policy is to utilise more than 200 million cubic feet of gas per day, which could not be added to the pipeline network. STOCK IMAGE
The Ministry of Petroleum and Natural Resources has indicated that 10 gas fields will be presented for an initial round of bidding for installing private power projects at their mouth based on interim gas supply arrangements, officials say.
The government has already given the go-ahead to a policy framework for on-site private power projects, which will generate a cumulative 1,000 megawatts of electricity.
Officials suggest that the primary objective of the policy is to utilise more than 200 million cubic feet of gas per day (mmcfd), which could not be added to the pipeline network. The power plants closer to the fields will be able to consume the unutilised gas.
Based on this concept, the petroleum ministry had indicated availability of 10 fields for an initial round of bidding as per agreed policy framework, representatives of the ministry told the Economic Coordination Committee (ECC) of the cabinet in a meeting held on December 24 last year.
Earlier, the ministry, in a meeting of the Cabinet Committee on Energy on November 10, 2014, presented a plan for installing 1,000MW-capacity power plants based on re-gasified liquefied natural gas (RLNG) or pipeline-specification gas under a separate initiative.
In another presentation to the energy committee later in the month, it was decided that RLNG-based power plants would be installed in the jurisdiction of Hyderabad Electric Supply Company (Hesco). They would replace fuel oil-based generation by Thermal Power Station-Jamshoro and produce more electricity.
The ECC was briefed that based on the above proposals, Hesco placed advertisements in national and international newspapers, seeking applications for developing on-site power projects along with production of 1,000MW based on RLNG.
According to the breakdown of RLNG-based plants, up to 600MW will be produced over the short term with the help of pipeline-specification gas at the Jamshoro power station of Generation Company-1 and another 400MW will be generated by other short-term projects of various capacities based on gas at different sites in the jurisdiction of Hesco.
In an attempt to implement the initiative, Hesco has issued Requests for Proposals (RFPs) to prospective bidders after approval by the National Electric Power Regulatory Authority (Nepra).
However, such short-term projects were neither covered by the policy framework for on-site power generation nor covered under the Independent Power Plants (IPP) policy, which only deals with long-term projects.
In a bid to add such provisions, certain amendments were made to the already approved policy framework for on-site power projects, the ECC was told.
The ECC also discussed the issues raised by the bidders relating to the duration of standby letters of credit, imports, tax regime and payments in case of “non-evacuation” of power by power distribution companies. The committee approved some amendments to address the bidders’ concerns.
Published in The Express Tribune, January 3rd, 2015.
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