Use of RLNG as GDMO: EPQL seeks Power Division support to push for PPIB approval

ISLAMABAD: Engro Powergen Qadirpur Limited (EPQL) has reportedly sought the Power Division's support to push the 'reluctant' Private Power& Infrastructure Board (PPIB) to approve the use of RLNG as Gas Depletion Mitigation Option (GDMO).

The company has conveyed its concerns to Prime Minister's Special Assistant on Power and Petroleum, Tabish Gauhar and other concerned authorities. The approval is pending before the PPIB board.

On August 10, 2021, a delegation of EPQL held a meeting with Power Division's authorities and subsequently wrote a letter to the Minister on gas depletion mitigation option for EPQL.

According to the letter, EPQL was commissioned in March 2010 with a dependable capacity of 217.3 MW utilizing permeate gas from Qadirpur Gas field. Permeate gas is produced as a by-product of processing of raw gas. At the time of feasibility, it was known that Qadirpur field will enter depletion phase after 2015 and a framework for finalization of alternate fuel was included in the Implementation Agreement (IA).

Qadirpur field entered depletion phase in September 2018.

EPQL engaged stakeholders, including PPIB, CPPA-G and Nepra and started working on the Gas Depletion Mitigation Plan (GDMP) under the IA. After extensive deliberations with stakeholders in 2019 and 2020, RLNG was narrowed down as the Gas Depletion Mitigation Option (GDMO) by stakeholders. CPPA-G board approved RLNG as GDMO on February 3, 2021.

Stakeholders including the PPIB, CPPA-G and Nepra met on March 16, 2021 and finalized RLNG as GDMO for EPQL. It was decided that PPIB will seek necessary approvals and notify RLNG as GDMO for EPQL at the earliest. However, GDMO has not been notified to date and the PPIB has informed that the matter was placed before Board Projects Committee who directed NTDC to carry out dispatch modeling for RLNG and HSD.

According to Ahsan Zafar Syed of EPQL, permeate gas profile indicates that its supply will deplete to such a level by mid- 2022 that plant will not be able to operate on permeate gas on a standalone basis and use of a commingling fuel will become essential, adding that at this point, in absence of GDMO, either HSD will be used as a commingling fuel or plant will be shut down and permeate will be flared, both of which are loss-loss scenarios for the consumer.

"We strongly feel that, at this stage, dispatch modeling using PLEXOS would be an exercise in futility, especially considering that NTDC has remained part of the stakeholders throughout development of GDMP and finalization of RLNG as GDMO," he added.

The EPQL argues that the benefits of GDMO can be gauged from the fact that had it been available on RLNG last year, the power basket price would have been reduced by Rs 3 billion by displacing expensive generation on RFO. It has also claimed that over the project term, implementation of GDMO will result in potential saving of Rs 90 billion compared to RFO.

"We feel compelled to report that EPQL plant has even received dispatch on HSD (@ Rs. 23/unit) during the recent past. We, therefore, believe that GDMO should be notified at the earliest to ensure continued utilization of permeate gas and to avail benefit of cheaper generation compared to RFO/HSD," he concluded.

Copyright Business Recorder, 2021