Nandipur starts producing 470MW

ISLAMABAD: Nandipur Power Plant went on producing 470 MW on Monday and was finally adjusted to 430 MW which is being injected to national grid.
It made dead plant equipment, stuck on Port Qasim for four years, successfully electricity producing plant, sources working at site confirmed to The News and concerned officials in Islamabad also verified the same.
Currently, the plant is operating by using furnace oil as fuel and after installation of gas convertor plant in next five months, the combined cycle plant will be producing much cheaper electricity for around Rs10 per unit.
Nepra has approved a tariff of Rs11.3 per unit for production of electricity from furnace oil for the Nandipur plant. It is pertinent to mention here that tariff demanded from Nepra by KP government for hydro power plants is Rs12 per unit of electricity.
Nandipur power project was conceived and approval for the cost for purchasing machinery was given during Musharraf regime. EPC (Engineering, Procurement, Construction) contractor M/s Dongfong was hired during PPP regime. Plant machinery continued catching rust and remained stuck at Port Qasim for four long years because of incompetence and vested interests of officials and their political masters.
The plant was installed and successfully test run in August this year but was shut down subsequently because an agreement reached with a Malaysian firm for Operation & Maintenance (O & M) of plant was cancelled as it was demanding very high rates. A project which remained dead for around a decade was successfully installed and tested but was made a ‘big scandal’ because of few weeks delay in its operations.
Priority fuel for the plant was natural gas right from the day this plant was conceived but it was decided to make it a dual fuel plant as bankers were not ready to finance a single fuel plant fearing losing their money in case of unavailability of a single fuel like gas.
It was observed during inspection of the plant earlier this year that Furnace Oil Treatment Plant (FOTP) was of low capacity (60%) as compared to the required measurement. This was a fact and was highlighted as one of the big points of the ‘scandal’ without explaining functioning of FOTP, possibility of its up-gradation to the desired level and as to who was responsible for installation of low capacity plant which remained for years at Port Qasim. FOTP is needed only when plant is operating on furnace oil. Most importantly current situation of FOTP is not being highlighted.
It has been established that it was responsibility of the EPC to install required capacity FOTP and made the plant fully functional. Those who made an important energy project a mega scam are unaware that EPC contractor not only admitted this fact but has already started working on up-gradation of FOTP plant and this enhancement process will be completed in next three to four months without spending of a single penny from the Pakistan government exchequer.
The government of Pakistan has $35 million bank guarantees of EPC contractor it submitted for Chicho Ki Malian project which was scrapped and government can cash these guarantees if FOTP not functioned at the desired level. FOTP is a small part of a big power unit and its function is to purify furnace oil from sulfur contents. Interestingly, the plant is operating and will operate on full capacity with FOTP working on 60% capacity as plant has storage of around 28,000 metric tonn of purified furnace oil which will continue fulfilling 40% deficiency till the time FOTP is up-graded to the required level. The machinery purchased by previous governments is an old model.
Officials say that as there are other plants operating on different fuels which can generate relatively cheaper electricity so Nandipur plant can also be shut down for seven to eight hours per day when power requirements at the national level are low and in this duration FOTP will continue purifying furnace oil.
The second LNG terminal is not competed yet as it is expected to be completed early next year following which RLNG will be included in the system and will be available for Nandipur resulting in production of much cheaper electricity.
Board of GENCO-III which owns Nandipur plant has recently requested Nepra to increase the already decided per unit price of electricity being produced on furnace oil from Nandipur as there are some costs which were not considered by the authority while penning down April 2015 judgement through which per unit rate was decided.
If Nepra does not allow increase in the price, it will add to the circular debt but once the plant is converted on gas this effect will also be minimised. Nepra will decide per unit cost of electricity produced from Nandipur by using gas after gas convertor plant will be installed. Old model machinery will produce costlier electricity as compare to latest models of gas turbines but scrapping of machinery bought by previous government for hundreds of millions of dollars was not an option. Experts having understanding of whole process and are aware of history of the project term successful operation of Nandipur Power Plant as a big success which will add considerable electricity in the national grid which will also become much cheaper when will be converted on gas.