ISLAMABAD: The country’s both gas utility companies are said to have started process to disconnect gas to Captive Power Plants (CPPs) on formal instructions from the Directorate General of Gas (Petroleum Division) and receiving of data from K-Electric (KE) and Discos, well-informed sources told Business Recorder.
According to official documents, currently, total number of captive units (export) is 1180 of which 383 are on SNGPL system, whereas, 797 are on SSGCL network.
Estimated indigenous gas consumption on systems of both gas utility companies is 242 MMCFD, of which 59 MMCFD is on SNGPL, whereas 183 MMCFD is on SSGCL network.
Transfer CPPs to the national grid, suggests PD
Estimated RLNG consumption is 156 MMCFD (114 MMCFD SNGPL and 42 MMCFD on SSGCL).
In pursuance of the commitment made with the International Monetary Fund (IMF) for phasing out of the captive power plants from gas grid by January 2025 the tariff for captive power plants have been revised from Rs2,750/ MMBTU to Rs3,000/ MMBTU from July 01, 2024.
Meanwhile, Power Division has also undertaken a survey and load assessment of captive power units along with time bound plan for provision of power grid connectivity to these units.
The data in this regard has also been shared with Petroleum Division. In letters to managing directors of Sui Northern Gas Pipeline Company Limited (SNGPL) and Sui Southern Gas Pipeline Company (SSGCL) and Chief Executive Officer (CEO) Power Planning and Monitoring Company (PPMC), an arm of Power Division, Deputy Director (Technical) Directorate General of Gas, Salahuddin Khan has cited reference of discussions held in the meetings co-chaired by Minister for Power, Sardar Awais Ahmad Khan Leghari and Minister for Petroleum Dr Musadik Masood Malik on September 12, 2024 to deliberate upon transition of gas based CPPs to power grid, a follow up meeting was chaired by Additional Secretary (Policy), Petroleum Division on September 19, 2024 with the representatives of SSCCL, SNCPL, Power Discos and PPMC wherein different issues related to this issue came under discussion.
According to Deputy Director (Technical) based on the understanding reached in the latter meeting, Power Discos including KE/ PPMC shall collate the data of CPPs and share with respective gas utility companies divided in following phases:
(i)CPPs which can be immediately switched to power grid without involving any further infrastructure requirements;
(ii)CPPs which require minimum additional infrastructure in short-term for switching to power grid;
(iii) CPPs which require additional infrastructure in medium-term for switching to power grid;
(iv) CPPs which require additional infrastructure in long-term for switching to power grid; and
(v)CPPs which are not connected to grid and/ or operating under wheeling; i.e., industrial estates/ zones.
Directorate of Gas (Petroleum Division) had asked that Discos including KE/ PPMC are requested to proceed and do the needful immediately.
KE and Discos have been asked that upon receipt of CPPs data from power distribution companies both the gas companies will prepare a plan with timelines serving disconnection notices followed by physical disconnections by Tuesday; i.e., September 24, 2024.
The Finance Ministry has reportedly sought a mechanism from the Petroleum Division which guarantees that the gas allocated to industry (process) will be used only for the prescribed purposes and not for power generation.
This guarantee will be part of final approval of a summary of Petroleum Division to treat processing industry at par with domestic consumers and commercial sector and placing CPPs at par with the CNG sector.
The Petroleum Division was of the considered view that the change in gas supply priority/ merit order coupled with gradual increase in gas tariff for captive power units would enable these units to transition to the power grid. The issue was discussed in the Apex Committee of the SIFC in its meeting held on February 2, 2024 which endorsed the revised gas supply priority order.
Accordingly, Petroleum Division had formulated the following proposals for approval of the ECC:
(i) existing gas allocation/ priority would be amended and gas use by the industry (process) would be upgraded and placed in the first priority alongside domestic and commercial sector; and
(ii) existing gas allocation/ priority would be amended and gas use by the industry (captive) would be relegated and placed alongside CNG sector. The ECC and Federal Cabinet, both accorded approval of recommendations of Petroleum Division.
Copyright Business Recorder, 2024
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