In a major development for Karachi's power sector, a gas supply agreement (GSA) has been signed between utility provider K-Electric and Pakistan LNG Limited (PLL).

The development was shared by Federal Minister for Energy Hammad Azhar in a tweet post on Tuesday. The minister said that under the agreement PLL, a state-run gas importer, will supply 150 mmscfd of LNG to KE.

“The benefits include enhanced power supply to Karachi,” said Azhar.

Minister for Energy Hammad Azhar lauded both organizations on achieving this milestone, deeming it "a step in the right direction for the future of Karachi and a positive move for both KE and PLL which ensures the interests of both parties as well as Karachi."

In line with the government's resolve to alleviate the energy crisis from Karachi, PLL will be supplying 150 MMSCFD of RLNG to fuel KE's new power plant of 900 MW.

CEO PLL, Masood Nabi said, "this will remain as a key moment in the public-private collaborative efforts towards the country 's sustained growth."

BQPS-III is KE's flagship project and valued at over $600 million. It will add 900 MW to KE's generation supply and meet Karachi's growing power demands.

Speaking on the occasion CEO KE, Moonis Alvi said, "Work on BQPS-111 is progressing swiftly and this is the fastest commissioning of a project in recent times. The addition of this plant will go a long way in supporting Karachi's continued growth."

Pakistan has increased its reliance on imported LNG over the last few years as its local gas output has declined while domestic demand, led by the power sector, has increased.

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Days ago, KE informed Nepra that Karachi’s power demand is expected to grow at a compound annual growth rate (CAGR) of 6.5 percent in the next five years.

Pakistan financial hub Karachi constantly face power shortages during peak seasons, and in order to mitigate demand-and-supply gap, the power company carries out hours-long load-shedding in the port city.

However, the addition of 900MW RLNG power plant could help ease the power woes of the city, besides increasing the power utility’s generation capacity, efficiency and reliability.

As per KE, the upcoming 900mw plant with 60 percent efficiency will be amongst the top five efficient power plants in Pakistan.