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Business

April 11, 2018

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Govt mulls RLNG supply to 2,500MW defunct power plants

Govt mulls RLNG supply to 2,500MW defunct power plants

KARACHI: Government geared up efforts to rev up its two defunct power units with 2,500 megawatts of production capacity by providing imported re-gasified liquefied natural gas (RLNG) to the plants amid remerging power crisis, officials said on Tuesday.

The officials said ministry of energy (power division) decided to make arrangement of RLNG for Northern Power Generation Company, having 1,921MW production capacity, and Jamshoro Power Company, which runs 777MW power unit, the officials said.

Currently, the plants are operating at their minimal production capacity.

“They might be utilising only 10 percent of their production capacities,” an official said.

Currently, Pakistan has two LNG terminals with capacity to produce 1.2 billion cubic feet/day (bcfd) of RLNG. Shortfall in natural gas, which is contributing nearly 46 percent to the country’s primary energy supply mix, is likely to increase to 3.9 bcfd in the fiscal year of 2019/20 and 6.6 bcfd by FY2030.

Pakistan State Oil was used to supply furnace oil and Sui Northern Gas Pipelines and Sui Southern Gas Company were supplying gas to the two generation companies.

Last year, Prime Minister Shahid Khaqan Abbasi said the country would completely phase out furnace oil-based power generation in near future to mitigate oil’s negative fallout on climate.

Government has already banned new power plants based on furnace oil in the wake of a growing import of liquefied natural gas.

Officials said Jamshoro and Northern power plants have been on ‘standby mode’ since November 2017 because of shortage of natural gas and cut in furnace oil supply and therefore there is no other option than to run the power plants on RLNG.

The official said as indigenous gas is not currently available, operation of the plants on RLNG is must.

“The infrastructure required for operation of the machines at the above mentioned generation companies on indigenous gas/RLNG are intact and machines are ready to be operated on either gas alone, furnace oil alone or on mixed firing,” an official said.

Officials said the units are technically sound and could efficiently be operated, and could contribute to generate economic activities.

Fuel cost component of the plants is subject to adjustment in accordance with the prescribed fuel price adjustment mechanism as notified in the official gazette.

Since the tariffs determined for these plants are based on dual fuel (natural gas and furnace oil), there would be a need for new tariffs based on RLNG price.

Jamshoro Power Generation Company and Northern Power Generation Company have already approached National Electric Power Regulatory Authority to get new tariffs to adjust variation in prices.

At present, hydroelectric power has a 34 percent share in the power generation mix, furnace oil contributes 29 percent, locally produced natural gas 19 percent, RLNG eight percent and renewable and nuclear energy five percent each.

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