The Private Power and Infrastructure Board (PPIB) is expediting its efforts to allocate up to 55 mmscfd low BTU (British thermal unit) gas from Kandhkot field to Engro Powergen Qadirpur Limited (EPQL), which will help to generate electricity at cheaper rates.

The Petroleum Division is planning to reallocate around 100 mmcfd volume of Kandhkot gas to other consumers to enhance the off-take from the field. The utilization of indigenous permeate and Kandhkot gas for EPQL can lower the overall energy basket price for the power sector, resulting in a potential benefit of over Rs. 300 billion to the consumers over the next 13 years.

Further, it can potentially produce 23 billion units of electricity over the remaining Power Purchasing Agreement (PPA) term of EPQL plant (till 2035), which in turn can provide foreign exchange savings of up to $2 billion versus imported coal/ fuel. Assuming the stability of current gas prices, the supply of Kandhkot gas to EPQL can also result in potential revenue of Rs 150 billion for Pakistan Petroleum Limited (PPL)/ Government of Pakistan (GoP) till 2035.

“This development is very positive for Pakistan to help overcome its energy challenges as the majority of fuel — including furnace oil, LNG and coal — is currently imported to generate power. For cheaper electricity and to ensure energy security, Pakistan needs to take advantage of the available, yet inadequately utilized, local fuel sources such as low BTU gas. Over the last 12 years of its operations, the EPQL plant has operated with a very high capacity/ availability factor and is an ideal candidate for this gas allocation”, said an energy expert.

According to Managing Director PPIB Shah Jahan Mirza, EPQL plant is specifically designed for consumption of low BTU gas with high Sulphur and, therefore, it can prudently utilize the Kandhkot gas field to produce cheaper electricity. Earlier, it was anticipated that more than a 100 km pipeline with huge capex would be required for supply of limited volume of gas from Kandhkot; however, EPQL has recently worked out that only 30 km pipeline would be required to connect EPQL plant with nearest off-take from Kandhkot field.

The 226 MW EPQL power plant, commissioned in March 2010 under the Power Policy 2002, was initially allocated low BTU permeate gas from Qadirpur gas-field. It was anticipated that the gas would start declining from 2015 and reach its minimum level by 2017. The updated gas profile shared by the gas supplier SNGPL indicates that a commingling fuel would be required to operate the plant, technically at a minimum level of 90 MW by end of this year. At present, the project is being operated in mixed mode i.e. using HSD to cover the shortfall of permeate gas.