K-Electric’s new plant to begin production in March-April

The federal government and K-Electric are putting in place required infrastructure and new generators to lift power supply by 40%, or 900 megawatts, to the city of ports, parts of upper Sindh and Balochistan ahead of the forthcoming summer season.

Ongoing efforts to reduce prolonged power outages during sweltering heat may, however, be partly jeopardised. The power utility has expressed a little bit of doubt about getting new gas connection for its under-construction power plant at Bin Qasim, Karachi.

Speaking at a press conference the other day, K-Electric Chief Executive Officer Moonis Alvi said that the entity was setting up two 450MW power plants and the primary fuel for the plants was re-gasified liquefied natural gas (RLNG) or gas.

“First of the two plants will begin production by March-April 2021,” said Alvi. Besides, the federal government would provide an additional 450MW from the national grid by February-March 2021, he said.

The federal government has approved 150 mmcfd of gas supply from Pakistan LNG Limited (PLL) through pipeline infrastructure of Sui Southern Gas Company (SSGC). The Oil and Gas Regulatory Authority (Ogra) has also awarded licence to K-Electric for laying and operating a 2-2.5km-long pipeline for gas supply.

SSGC, however, was reluctant to allow K-Electric to use its infrastructure before clearing its dues of billions of rupees. Despite this situation, high officials of K-Electric have expressed hope that they will get the required gas connection soon since the federal government is trying to put things in order. The 900MW plants, which are under construction, can also be operated on alternative fuel ie high-speed diesel.

With the addition of 900MW, power supplies by K-Electric will increase to around 3,000MW by the summer of 2021. “Demand for power, however, is estimated to peak at around 3,850-3,900MW in summer,” he said.

Second unit of the plant is scheduled to start production by October 2021. The two plants are being set up at an estimated cost of $650 million. The company has planned to phase out aging units next winter, which are being run on expensive fuel – furnace oil.

The company has also planned to phase out 300MW of its production at Bin Qasim. Alvi said that power outages would go down substantially over the next three years and 93-94% area on K-Electric’s network would be free from load-shedding by 2023.

SSGC’s version

“SSGC dismisses the assertions made by K-Electric CEO Moonis Alvi about the dues as well as the power utility’s perspective in relation to the gas sale agreement (GSA) between the two companies,” SSGC said in response to request for comments.

SSGC reiterated that it had always shown utmost seriousness for ironing out contentious issues with K-Electric, including the signing of a valid GSA with the power company, even though dues of K-Electric had now crossed Rs122 billion, and not Rs13.7 billion as the K-Electric CEO mentioned.

SSGC said it had always maintained that the vital issue of growing dues needed to be sorted out before the company inked a fresh GSA with K-Electric.

It stressed that contrary to K-Electric CEO’s assertion, the main reason behind the lack of progress on signing the GSA had been K-Electric’s reluctance to abide by the 2018 decision of the then Cabinet Committee on Energy, which called for finalisation and signing of terms of reference for the settlement of dues among SSGC, K-Electric and Karachi Water and Sewerage Board.

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