LNG import, Nandipur plant: Govt denies corruption, presents itself for probe

Power minister says Nandipur plant is working and generating 445MW

ISLAMABAD:

Two energy ministers have said they have no objection if they are probed by the media and investigating agencies in relation to the import of liquefied natural gas (LNG) and the closure of Nandipur power plant.

The remarks appeared to be aimed at shielding the top leadership from the allegations of corruption in LNG deals and the Nandipur project.



Certain lobbies with vested interests like the oil mafia were creating doubts about the proposed LNG deal with Qatar, said Petroleum and Natural Resources Minister Shahid Khaqan Abbasi and Water and Power Minister Khawaja Muhammad Asif at a seminar on Pakistan LNG Import, hosted by the petroleum ministry here on Wednesday.

They have come in for a lot of flak from opposition parties and media houses over reported corruption in the energy projects.

“LNG will help the country save $2 billion per annum in oil imports for power plants,” Abbasi said and called LNG a game changer, which was the only viable option to resolve the energy crisis.



“We will be able to import gas from Iran by the end of December 2017 if sanctions are eased, but gas from Turkmenistan will not be available before 2020,” he said.

According to the minister, the country produces 4 billion cubic feet of gas per day (bcfd) against demand for 8 bcfd and to reduce the gap the government has planned to import 2 bcfd of LNG over the next three years, which requires almost five LNG terminals.

He said the first terminal had been built in Karachi in the shortest time and its tolling fee was the lowest in the world. The second terminal is being constructed at the Gwadar Port with Chinese assistance and a tender will be floated shortly to develop another terminal in Karachi.



“The LNG import deal is expected to be struck with Qatar by mid-November for a long-term supply arrangement,” Abbasi said.

He pointed out that 3,600-megawatt LNG-based power plants were being established to tackle power outages and said LNG was an efficient fuel that would add 10% electricity to the national grid without any investment.

He also faced criticism from energy experts over the long-term LNG deal with Qatar at a time when several countries like the US were emerging as potential LNG exporters, which could lead to a further drop in prices.



In response, the minister said all political parties had been invited to discuss any alternative option and parliament was also briefed about the LNG import project several times.

Speaking to the audience, Water and Power Minister Asif announced that the Nandipur power plant was working and generating 445MW of electricity. He put the project cost at Rs59 billion.

“I have fought four cases of corruption in the Supreme Court and anyone who has solid proof against us, should go to the court,” he said.



According to the minister, the Nandipur plant was generating power at 10 cents per unit by consuming furnace oil and the cost would come down to 9 cents after it started running on LNG.

He said hydroelectric power generation would come down to 1,000MW from 6,900MW in December because of reduced water flow in rivers. “LNG is the only choice to keep power plants running for 365 days in a year.”

The Indus Cascade had the potential to produce 30,000MW in the next 20 years and a Chinese company had asked for the whole area for hydroelectric power plants, he said, adding the company had also offered to inject some equity into the plants.

Published in The Express Tribune, October 29^th, 2015.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.