“Board has expedited its efforts for the same, which can potentially produce 23 billion units of electricity over EPQL’s remaining Power Purchasing Agreement (PPA) term till 2035 as it will result in a potential benefit of over Rs300 billion to the consumers over the next 13 years,” said Shahab Qader, Chief Executive Officer EPQL, talking to The News.
“At present the project is being operated in mixed mode i.e. using HSD (high-speed diesel) to cover the shortfall of permeate gas, therefore, Engro submitted a proposal to the government in March last year suggesting supply of gas from Kandhkot to EPQL instead of running the project on RNLG.”
Initially, he added, it was anticipated that more than a 100km pipeline with huge (CapEx) would be required for supply of limited volume of gas from Kandhkot.
However, EPQL has recently worked out that only a 30km pipeline would be required to connect EPQL plant with the nearest off-take from Kandhkot field.
Shahab said it could lower the overall energy basket price for the power sector, resulting in a potential benefit of over Rs300 billion to the consumers over the next 13 years.
Further, he added, it could potentially produce 23 billion units till 2035, which in turn could provide foreign exchange savings of up to $2 billion versus imported coal/fuel.
Assuming the stability of current gas prices, the EPQL chief said the supply of Kandhkot gas to EPQL could also result in potential revenue of Rs150 billion for Pakistan Petroleum Limited (PPL) or the government till 2035. In case this gas was not provided to the EPQL, Shahab said, then, on the basis of current prices of coal and RFO (residual furnace oil), the plant would need Rs450 billion and Rs550 billion, respectively, to run the plant on the said imported fuel for the next 13 years.
He said that over the last 12 years of its operations, the EPQL plant had operated with a very high capacity/availability factor and was an ideal candidate for this gas allocation.
“EPQL plant is specifically designed for consumption of low BTU gas with high sulphur, therefore, it can prudently utilize the Kandhkot gas field to produce cheaper electricity,” he said.
Shahab said the PPIB was expediting its efforts to allocate up to 55 mmscfd low BTU gas from Kandhkot field to the EPQL.
The Petroleum Division is planning to re-allocate around 100mmcfd volume of Kandhkot gas to other consumers to enhance the off-take from the field, the EPQL chief said.
Running the EPQL plant on gas from Kandhkot, Shahab said would bring the actual cost per unit drastically down to Rs7.40, which was currently Rs28/unit produced through RFO. He further said NEPRA would sort this out after the approval because recently Engro had informed NEPRA they were producing only 110MWs from gas and the rest HSD.
“The key factor is the analysis of plant efficiency which was already done in 2010, so the next phase is the determination of fuel cost component.”
He said that Nepra now only needed to decide the price of new fuel and if it was the same as that of Qadirpur they wouldn’t need to change even the fuel cost component.
“They would just allow and recognise that EPQL is using gas from Kandhkot as well so the next step is easy,” concluded Shahab.