ISLAMABAD: Kot Addu Power Company Limited (Kapco) and Sui Northern Gas Pipeline Limited (SNGPL) are said to have locked horns over the draft of tripartite agreement meant to supply RLNG to the power plant. The multi fuel-fired power plant, which produces 1,600 MW intends to sign RLNG supply agreement with the SNGPL.
According to a letter written by Chief Executive Officer (CEO), Kapco, Aftab Butt to Chief Financial Officer, CPPA-G, Rehan Akhtar, a detailed discussion and exchange of comments was carried out between the teams of concerned parties and a draft was finalized which was circulated among the parties for signature.
However, Kapco was surprised to note that certain further amendments in clauses 8 and 10, which were fundamental in nature for the company were not incorporated, which has made this version of the agreement unacceptable.
The matter was further discussed between the teams and it was mentioned that CPPA-G has taken these clauses from Rousch RLNG agreement, which was signed before the ECC approved draft for other IPPs. "We informed SNGPL team that no such changes were made in case of other IPPs while signing the respective agreement," the sources quoted, Aftab Butt as saying in his letter.
RLNG is a preferred fuel both in terms of commercial and operational angles. Therefore, RLNG is extremely important for Kapco generation due to its lowest cost and ready operations. SNGPL has already stated that they would not supply gas to Kapco in case the agreement is not signed.
"We have already compromised on the credit period available to Kapco in the GSA in the interest of the sector. We are ready to sign the agreed terms which are also approved by the ECC," CEO Kapco added.
Earlier, in November, SNGPL's Deputy General Manager (BD-Corporate) in its letter to CEO, Kapco, reiterated that RLNG supplies to Kapco were initiated on May 3, 2020 pursuant to assurance/commitment of execution of tripartite agreement within one week. Despite giving considerable time beyond committed timelines and sensitizing the repercussion of RLNG supplies to Kapco in the absence of valid agreement, the tripartite agreement has not been executed till date.
SNGPL's facilitation is evident from the fact that apart from written/verbal communication, a number of meetings (both online and in person) were arranged with the stakeholders to deliberate upon the pending issues. Subsequently, draft agreement while incorporating necessary agreed changes was shared. Upon repeated requests and continuous follow-up, CPPA-G in its letter of November 16, 2020 has maintained that they have responded to the queries raised by Kapco and were ready to execute the draft.
SNGPL, in its letter requested Kapco to sign the tripartite agreement on immediate basis to ensure supply of RLNG to Kapco as and when NPCC advises diversion. However, SNGPL shall not resume supplies to Kapco, even if power purchaser gives diversion request for Kapco, unless the agreement is executed and requisite formalities are completed.
Copyright Business Recorder, 2020
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