Loadshedding may mar summer due to delays in RLNG power plants

ISLAMABAD: Pakistan LNG Limited (PLL) has exposed that three RLNG power plants of 3600 MW for Punjab, already delayed too much, will still not be available in near future, as only one is to be functional in April. It means that the country may not be rid of loadshedding this summer.

“The scheduled imports of RLNG in the month of April as per the demand of the power division and commitments given in January 2018 by top management of the three RLNG power plants have adversely been affected resulting in the penalties, liquidated damages (LDs),” reveals official documents.

The latest letter sent by Adnan Gillani, the PLL managing director, on March 14 to DG Oil, states that the three RLNG Power Plants with capacity to generate 3600 MW have now backtracked as two of them are still not ready to generate electricity on combined cycle.

Late delivery of gas turbines, combustion seal leak with vibrations and calibrations issues at one of the turbines at Bhikki and severe damage caused to a turbine at Haveli Bahadur Shah are some of the major factors that had already contributed to commercial production delays.

The three plants at Bhikki (Sheikhupura), Baloki (Kasur) and Haveli Bahadur Shah (Jhang) have the capacity to generate more than 3,600 megawatts of electricity.

The first two plants were originally scheduled to start commercial operations in December 2017 and the third one was billed in the end of last calendar year 2017 to start supplying electricity to the national grid. Later on the third one also developed some faults. However, now the situation is quite different as expressed in the letter written by Power Division on March 9 to Petroleum Division intimating that the total projected utilisation of RLNG for the said projects stood at 1012 mmcfd gas in the month of April. But in the latest scenario the top management of the said power plants backtracked from their commitments saying now one of the plants would be available during April 2018 for power generation reducing the gas requirement of 1012 mmcfd to 760 mmcfd for whole power sector.

This development has resulted in the mammoth cut in RLNG supply to power sector in the month of April as only one RLNG based power plant will be functional in the month of April.

It may not be out of place to mention here that the National Assembly Standing Committee on Planning, Development and Reforms was also informed that around 2450 MW electricity would be added to national grid by February 2018 after completion of Haveli Bahadur Shah Combined Cycle Power Plant and Balloki Combined Cycle Power Plant, but the ground reality speaks the otherwise.

The PLL MD’s letter says: “Pakistan LNG Limited has arranged the import of LNG strictly in line with the confirmation of, and commitment from, SNGPL. However, SNGPL and Power Division (RLNG projects) have failed to honour its commitments and informed PLL of the apparent reduction in demand at last moment knowing the fact once LNG supplies are arranged.”

The ministry, through its communication dated September 14, 2017, had mentioned that RLNG volumes beyond the requirements of three GPPs are to be catered by PLL. Same was reiterated by SNGPL through letter dated November 22, 2017 stating that the GPPs cannot become a part of the PLL’s supply chain. Consequently, the agreements being negotiated between PLL and SNGPL were amended to exclude the references to GPPs. Now PLL is being advised to reduce its supplies.

The PLL is trying to re-schedule the cargoes it has already ordered to ensure that monthly imports (till September 2018) ranging between 2 to 3 cargoes which are equivalent to 200 to 300 mmcfd of RLNG, which may trigger net proceeds differential, demurrages etc. PLL shall, the letter says, not be responsible for any deficiency in the available RLNG supplies, due to the aforementioned direction of the ministry.