Three plants relieved of LNG purchases from SNGPL, PSO

ISLAMABAD: Overruling the petroleum division’s objections to looming losses to its companies, the federal cabinet has approved doing away with the condition of “minimum 66 per cent take-or-pay commitment of RLNG (re-gasified liquefied natural gas) for three Punjab-based mega power plants” to earn better privatisation proceeds and scale down power sector liabilities of over Rs2.15 trillion.

The petroleum division has put on record that without a budgeted subsidy, the decision will “simply be transferring circular debt from power division companies to petroleum division companies and in fact increasing it”.

A senior government official told Dawn that a meeting of the cabinet presided over by Prime Minister Imran Khan had endorsed a majority view of the elected members of the Cabinet Committee on Energy (CCoE) to relieve three LNG-based power projects of 1,220-1,230MW each of the guaranteed 66pc LNG purchases from Sui Northern Gas Pipeline Limited (SNGPL) and Pakistan State Oil (PSO) which have 100pc guaranteed commitments for LNG purchases from Qatar and private suppliers.

However, the cabinet directed the power division to provide year-head consolidated annual production plan (CAPP) for the four RLNG-based government power plants (GPPs) — Qaid-i-Azam thermal plant, Punjab thermal plant, Balloki plant and Haveli Bahadur Shah plant — based on principle of economic merit order dispatch per grid code. It also accepted a power division’s demand that CAPP once finalised would be a firm RLNG demand of the power sector subject to upward revision, if required. The power sector may divert the consolidated off-take to any RLNG power plant based upon the system requirement.

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