Winter: power plants to get extra RLNG

ISLAMABAD: The Federal Government has decided to give five per cent extra RLNG to power plants this winter as compared to previous year’s actual consumption whereas in case of gas fluctuations in natural gas based power plants, furnace oil will be used.

This is included in the winter-gas load management plan 2021-22, shared by the Petroleum Division with the Cabinet Committee on Energy (CCoE). Implementation on the plan has already started from December 1, 2021.

A winter gas load management plan (December-January) is annually proposed by Sui gas companies and implemented by them after approval of the Federal Government.

The challenge of managing gas supply to domestic consumers during winter includes enhanced demand vis-à-vis supply constraints and infrastructure limitations. Due to requirement of space/ indoor heating and water heating during winters, the demand of gas increases - SSGCL demand increases from 350 MMCFD to 500 MMCFD and SNGPL demand increases from 550 MMCFD to 1200 MMCFD.

A policy to allow diversion of RLNG on SNGPL network during winter months, i.e., December to February every year starting from FY 2018-19 onwards has been approved by the Federal Government to mitigate the demand challenges. Due to substantial difference in the tariff of indigenous gas and RLNG, the un-recovered tariff differential has accumulated to the level of Rs104 billion for SNGPL.

Sources close to Minister for Energy told Business Recorder that a projection of national gas demand and supply position for November 2021 to March 2022 shows that demand during December 2021-January 2022 is projected to increase from 4,243 MMCFD in November to 4,474 MMCFD (5 per cent month on month) and 4782 MMCFD from November to March (7 per cent month on month), respectively. While the industrial demand remains constant throughout the year, there is substantial escalation in domestic demand during the winter.

Required supply of RLNG not possible as of now

The deficit is projected at 717 MMCFD in December, 2021 and 961 MMCFD in January, 2022 for domestic sector.

The projected position of natural gas demand and supply indicates that dedicated supplies which were 1,080 MMCFD in November 2021, 1,111 MMCFD in December 2021, 1,111 MW in January 2022, 1110 MMCFD in February 2022 and 1,050 MMCFD in March. Of this SNGPL input which was 810 MMCFD in November, will be 820 MMCFD from December 2022 to March 2022 whereas input from SSGCL will be 940 MMCFD. RLNG input which was 696 MMCFD in November 2021, will reach 886 MMCFD in December 2021, 950 MMCFD in January 2022, 12,00 MMCFD in Feb-22 and 1,125 MMCFD in March -22.

Furnace oil demand for power, which recorded at 81,707 Metric Tons (MT) in November 2021, will be 168,861 MT in December, 148,392 MT in January 2022 and 57,337 MT in February 2022.

According to Petroleum Division, dedicated demand, which was recorded at 1,080 MMCFD in November 2021, will remain 1,111 MMCFD in December 2021 and January 2022. But it will slightly reduce to 1,110 MMCFD and 1,050 MMCFD in February and March 22.

SNGPL demand for November 2021 was 986 MMCFD, December 1,216 MMCFD, January 2022 1,430 MMCFD, February 2022, 1,152 MMCFD and March 918 MMCFD.

SSGCL demand was recorded at 1,208 MMCFD in November 2021, 1,261 MMCFD in December 2021, 1,291 MMCFD in January 2022, 1,221 MMCFD in February 2022, and 989 MMCFD in March 2022.

RLNG demand in November was 696 MMCFD, December 886 MMCFD, January 2022, 950 MMCFD, February 1,200 MMCFD and 1,125 MMCFD in March 2022.

Furnace oil availability which was 159,013 MT in November 2021, will be 140, 152 MT in December 2021, 91,780 MT in January 2022 and 134, 423 MT in February 2022.

RLNG storage: Petroleum Div. asked to explore possibilities

The statistics show shortage of 444 MMCFD/ MT in November 2021, 717 MMCFD/ MT in December 2021, 961 MMFCD/ MT in January 2022, 613 MMCFD/ MT in February and 147 MMCFD in March 2022.

In order to address the energy demand and supply gaps, the Ministry of Energy has taken an integrated policy approach and has provided electricity incentive package for domestic consumers @ Rs.12.96 kWh from November 2021 to February 2022 so that pressure on gas consumption can be reduced. Further an electricity incentive package has been put in place for export industry @ 09 Cents per KWh plus gas tariff for export industry (captive) has been raised from USD 6.6/ MMBTU to USD 9/ MMBTU, which will allow the industry to switch from gas to power grid, thus creating a cushion for more gas supplies to domestic in peak winter months. Further, policy measures to address the challenges in short to medium term include development of virtual LNG supply chain, utilizing excess terminal capacity and a new LPG Policy 2021.

The Sui Companies in collaboration with Discos are carrying out a public awareness and engagement plan for conversation of gas which includes the use of electricity for space/water heating and the use of conical baffles, as well as, time devises for geysers. Both Sui companies have been advised to strictly monitor the efficient uses of scarce gas and load management as per policy.

The government has approved the following gas supply mechanism for winter 2021-22, commenced from December 2021 to January 31, 2022:

Domestic sector: (i) domestic consumers to remain top priority for sustained supply of gas ;(ii) enhanced demand of domestic consumers to be met through saving of gas previously utilized from captive power generation (export) ;(iii) low pressures of domestic network in winter to be managed through prudent pressure augmentation strategy ;(iv) in extreme winter, the curtailed gas from CNG, cement and general industry to be diverted to domestic sector for comfort of citizens ;(v) Petroleum Division to present LPG Policy 2021, which embodies incentive structure for domestic LPL production, streamlining imports and promotion of new investments in the sector including G-to-G interactions for long-term import of LPG and;(vi) plan to tap unutilized capacity of LNG terminal(s) is under final stage.

Industrial sector:(a) dedicated consumers of power sector to get uninterrupted gas supply;(b) power production based on LNG to get five per cent extra supplies during this winter as compared to last year’s actual ;(c) in case of deficiency in power production due to gas pressure fluctuation, furnace oil may be used for which sufficient stocks have been made available with OMCs and IPPs;(d) consumers of fertilizer sector to get uninterrupted supply of gas in order to boost agricultural productivity;(e) export sector(zero-rated) to get uninterrupted gas supplies during the winter;(e) the captive power generation by export sector (zero-rated) has been incentivised by special power tariff of 9 cents per kWh to switch on-grid electricity source;(f) general industry (non-export) to get sustained supplies till pressure issues are faced. In case of system constraints, following regime to be followed - weekly rotation plan for off days; rotation-wise closure of units in consultation with Sui companies and cement and CNG sector to be curtailed ahead of general industry, if necessitated.

Copyright Business Recorder, 2021