Ministry of Energy (Power Division and Petroleum Division) has reportedly prepared an interim plan on conversion of 6052MW power plants-Gencos and IPPs-from furnace oil into Liquefied Natural Gas (LNG) by the end of 2019, well-informed sources told Business Recorder. On September 6, 2017, the plan was submitted to the Cabinet Committee on Energy (CCoE) presided over by Prime Minister, Shahid Khaqan Abbasi.
However, the CCoE deferred the plan on the request of Petroleum Division as an additional analysis was required to finalise figures, the sources added. According to an estimate, Pakistan could save $6-8 billion in four years by running Bhikki-type plant on RLNG in comparison to the current furnace oil-based power generation.
Power Division has to prepare the interim plan in close co-ordination and consultation with Petroleum Division which is responsible for sharing data, facts and figures relating to LNG import, and pricing vis-à-vis furnace oil.
The Petroleum Division argues that RLNG is the cheaper source of electricity generation and is advocating a ban on the consumption of furnace oil and diesel in power plants. Power Division updated the CCoE in its last meeting and the Prime Minister, who also holds the portfolio of Energy Ministry, directed that a consolidated interim report may be submitted to the CCoE in its next meeting, the sources continued.
"Power Division has prepared a report in co-ordination with the Petroleum Division which will be tabled in the forthcoming CCoE meeting," the sources maintained. Power Division, sources said, is still verifying some facts/figures provided by the Petroleum Division so that a comprehensive report is submitted to the forum which would account for an informed decision being taken. "It's a very complicated subject and until complete data is made available, it is very difficult to make any projection. Availability of gas and price are major issues. Should we factor in today's LNG prices or in the three coming years? The future prices are only projections and they require complete simulation but Pakistan does not have the capacity to analyse. It will take a lot discussions and deliberations and then a decision will be taken at the highest level as it will not be an easy decision," said a top official.
He further stated that there are several "known unknowns" like pricing, availability and infrastructure for availability of gas and its transportation, adding that it is too early to make any guess. He said debate is necessary on this issue even after the report is submitted to the CCoE. According to the fuel efficiency comparison made by the Petroleum Division, the cost of consuming RLNG in Bhikki power plant stood at 97% lower than the cost of furnace oil used in Muzaffargarh thermal power station. Similarly, the cost of RLNG is 83 per cent less than the cost of high-speed diesel being consumed in Saif power plant.
At present, hydroelectric power has a share of 34 per cent in power generation mix, furnace oil 29%, locally produced natural gas 19 per cent, LNG 8 per cent and renewable and nuclear energy 5 per cent each. However, in 2018, when power production is expected to go up to 33,124 megawatts, the share of hydroelectric power will be 30 per cent, furnace oil 18 per cent, LNG 16%, local natural gas 12 per cent, imported coal 10 per cent, renewable energy 8 per cent, nuclear power 4% and local coal 2 per cent.