KARACHI: K-Electric demanded of the power regulator to remove strings attached to its use of re-gasified liquefied natural gas (RLNG) for electricity generation, The News learnt on Tuesday.
The National Electric Power Regulatory Authority (Nepra) imposed a requirement of utilisation of 130 million metric cubic feet/day (mmcfd) of local gas prior to use RLNG.
The power utility filed a review petition with the Nepra as it has reservations over certain provisions of the decision in the matter of request filed by K-Electric for approval to utilise RLNG as an alternate fuel for its generation plants.
K-Electric observed that Sui Southern Gas Company (SSGC) is supplying 60 mmcfd of RLNG to KE, whereas supply of local gas up to 130 mmcfd is being made on availability basis. K-Electric reached out to the court to ensure supply of local gas.
The court’s interim order directed SSGC to supply 130 mmcfd of local gas and 60 mmcfd of RLNG.
SSGC, however, unilaterally reduces gas supply and provides it on availability basis. The power utility requested Nepra to amend its decision and remove the compulsion to utilise 130 mmcfd of local gas prior to using RLNG.
The company said RLNG use helped it cut production cost of Bin Qasim power station (BQPS-II) and Korangi combined cycle power plant (KCCPP). Increased cost of diesel-run power production and its intensive maintenance requirements will unnecessarily increase tariffs and burden government and consumers, it added.
Diesel-based power generation costs Rs21.54 per kilowatt/hour (kWh) at BQPS-II. On local gas, it is Rs5.03 and Rs14.12 on RLNG. Diesel-run electricity generation costs Rs22.91 at KCCPP, whereas it is Rs5.34 on local gas and Rs15.01 on RLNG.
In June last year, government allowed KE to use RLNG as an alternate fuel for power generation, but didn’t grant any change in the fuel price.
In April, the power utility requested Nepra to allow RLNG as an alternate fuel for its existing power plants after a fuel shortage worsened electricity breakdowns in the city.
Subsequently, the Cabinet Committee on Energy directed SSGC to increase gas supply to KE under an arrangement of 130 mmcfd of natural gas and 60 mmcfd of RLNG to meet KE’s minimum gas requirement.
RLNG share in energy mix soared to almost 20 percent as the country set up two terminals to produce 1.2 billion cubic feet/day of RLNG.
Overall, gas-based power production increased to 43 percent, followed by hydel (19.44 percent), coal (15.79 percent) and furnace oil (8.33 percent), according to the Nepra.
The power regulator, however, attached some conditions with the permission to KE to use the imported gas as a substitute fuel.
“Utilisation of RLNG shall only be allowed after utilisation of the minimum quota of 180 mmcfd of local gas,” the regulator said in a statement then.
“The dispatch shall be strictly in accordance with the economic merit order. Operation on simple cycle shall not be allowed. Reference fuel price on gas and RLNG shall be the same. Other terms and conditions shall remain unchanged.”