Pakistan Minister for Energy Hammad Azhar has tweeted that K-Electric has signed first of its kind GSA with Pakistan LNG Limited . This is for the supply of 150 mmcft LNG to K-Electric. The benefits include enhanced power supply to Karachi. Congratulations to both the entities.
The RLNG-based power plant will go a long way in meeting Karachi’s power demand and ensuring the city and its industries stay energized to play their due role in the national economy.
The addition of the 900 MW RLNG Power Plant will increase the power utility’s generation capacity, efficiency, and reliability. The National Electric Power Regulatory Authority (NEPRA) has also recently approved the modification in the generation license of K-Electric, with the addition of the 900 MW RLNG powered BQPS-III to the power utility’s generation capacity. The power plant is being built as per the power utility’s business plan, approved under the Multi Year Tariff for the control period 2017-2023.
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Moonis Alvi, CEO K-Electric said the project is a major private sector investment in the country’s power sector. “In addition to bridging the demand for electricity, this plant will also enable us to gradually phase out some units of the aging and less efficient BQPS I plant, which have been in service for more than 30 years. The BQPS-III would result in lower import costs for the government, affordable power for consumers and a much smaller carbon footprint as compared to furnace oil power plants, and K-Electric is committed to commissioning the project as per planned timelines. I am confident that we will continue to have the support of the government and other stakeholders since there is no doubt that the upcoming 900MW RLNG power plant is very crucial for Karachi.”
While the COD of 900 MW plant is a vital element towards meeting Karachi’s growing power demands, other commitments also need to be fulfilled in a timely manner for this reality to be realized. Heads of Agreement with Pakistan LNG Limited (PLL) for supply of 150 mmcfd of gas for BQPS-III has already been signed, subsequently negotiations on the Gas Sale Agreement (GSA) have reached to the advance stage and any potential hurdles need to be resolved as per past commitments by the Cabinet Committee on Energy (CCoE).
The power utility appreciates the decision of the Oil and Gas Regulatory Authority (OGRA) to approve K-Electric’s application for a license to construct and operate a gas pipeline, that will supply Re-gasified Liquefied Natural Gas (RLNG) for the upcoming RLNG-based 900 MW BQPS-III power plant and supplementing fuel requirement of the power plants located at its Bin Qasim Power Complex. This is a very positive development for KE as the grant of the license by OGRA is a key step in ensuring that the upcoming BQPS III power plant receives the right amount of gas, at the right pressure. This milestone will go a long way in helping bridge the supply-demand gap in Karachi in the years to come.
The 900 MW RLNG based plant and its timely completion is just one step towards keeping Karachi energized. Further, keeping in view surplus of power in national grid, KE would off-take additional supply of 1,400 MW from National Grid to mitigate demand supply gap in future. In this regard, subsequent to CCOE decision in June 2020 for Approval of Supply of Additional Power to KE from National Grid, KE is engaged in negotiations with the CPPA for procurement of this additional 1,400 MW from the National Grid under a long-term Power Purchase Agency
Agreement (PPAA). This will be in addition to the existing supply 650 MW from the National Grid. Additional Supply of 1,400 MW will be procured in phases and the first phase will include 450 MW starting from April 2021 after the completion of rehabilitation works on Jamshoro-KDA transmission lines and NKI cross tripping tests. Subsequently in the next phases (2022-2023), completion of Dhabeji and KKI Grid along with transmission lines (Interconnection Facilities) would also be required for complete evacuation of 1,400 MW from the National Grid. NTDC’s support for timely completion of Interconnection Facilities will be of immense importance.
While, K-Electric is fully committed to its future planned investments, sustainable resolution of the government receivables issue which have reached to an unsustainable position and timely approvals by NEPRA for quarterly tariff adjustments and mid-term petition, remain critical to the execution of these planned investments to ensure smooth supply of power to Karachi. K-Electric is confident that all concerned stakeholders will continue to lend support so that KE achieves its vision of bringing Karachi to a power surplus situation by the year 2022.