February 11, 2021 - Energy Update

State Bank approved financing under TERF reaches Rs374bn

February 11, 2021February 11, 2021 Admin

State Bank of Pakistan’s (SBP) Temporary Economic Refinance Facility (TERF) has shown significant growth over the last ten months despite the COVID-19 pandemic. As per SBP, as of Jan 28, 2021, investments approved under TERF have reached Rs374bn, up by Rs51bn in one week. The highest weekly increase since the announcement of this scheme. Whereas, 450 projects approved so far. TERF has shown significant growth over the last ten months as reflected by increase in requested amount from Rs 36.1 billion by end April 2020 to Rs 687.4 billion by…

LNG supply chain in jeopardy as PLL defaults on payments

February 11, 2021February 11, 2021 Admin

ISLAMABAD: In a shocking development, the 100 percent state-owned company, Pakistan LNG Limited (PLL), has defaulted with the United Bank Limited (UBL) on LNG payments, putting the LNG supply chain in jeopardy. This appalling situation, which has emerged because of non-payment of dues of Rs61.2 billion by Sui Northern, has exposed PLL to an imminent default on future LNG supply. This irritating development was identified in Pakistan LNG Limited’s (PLL) letter of February 4, 2021 to Special Secretary of Petroleum Division Nadeem Irshad Kiyani. It mentions that receivables of PLL…

Oil in longest rally in two years

February 11, 2021February 11, 2021 Admin

LONDON: Oil extended its rally for a ninth day on Wednesday, its longest winning streak in two years, supported by producer supply cuts and hopes that vaccine rollouts will drive a recovery in demand. The American Petroleum Institute said on Tuesday crude inventories fell by 3.5 million barrels, versus expectations for a 985,000-barrel build. The Energy Information Administration’s official stocks report is due at 1530 GMT. Brent crude was up $0.44, or 0.7%, at $61.53 by 1247 GMT after touching a 13-month high of $61.61 earlier in the session. US…

The might of metals in the clean energy transition

February 11, 2021February 11, 2021 Admin

Metals. It isn’t often that we — most of us, anyway — think about them. They are like water or packaged foods, things that appear out of a faucet or on a grocery store shelf as if by some magic inception. But there is a scientific beginning to metals. And it’s something we ought to be thinking about, increasingly so. Here’s why: Minerals are critical to the transition to clean, green energy. Copper supplies, for example, need to increase by as much as 6 percent per year to meet the…

Power tariff hiked by Rs1.53 per unit

February 11, 2021February 11, 2021 Admin

The National Electric Power Regulatory Authority (Nepra) on Wednesday increased power tariff by Rs1.53 per unit on account of monthly fuel charges adjustment (FCA) for December 2020. The increase will be applicable to consumers of all power distribution companies, except for K-Electric. The power distribution companies would collect the amount from consumers in the bills for February 2021. The regulator allowed the increase as the power distribution companies charged less than the actual cost of electricity generated from different fuels in December. The Central Power Purchasing Agency-Guarantee (CPPA-G), on behalf…

Ogra allows Rs13.4 rate increase to SNGPL

February 11, 2021February 11, 2021 Admin

ISLAMABAD: Rejecting a request for 123 per cent increase, the Oil & Gas Regulatory Authority (Ogra) on Wednesday allowed Rs13.42 per unit (2pc) raise in the prescribed price for Lahore-based Sui Northern Gas Pipelines Ltd (SNGPL). The increase was determined on the request of gas utility on the basis of its estimated revenue requirement (ERR) for 2020-21. The regulator said it provisionally determined the shortfall in revenue required for the SNGPL at Rs4.35bn. “Accordingly, the revenue required for SNGPL is provisionally determined at Rs228.7bn and prescribed at Rs644 per million…

NAB, Nepra to keep an eye on IPPs: minister

February 11, 2021February 11, 2021 Admin

Says talks with banks under way to double their debt repayment tenure with IPPs• Four Discos to be given to private sector to curtail losses ISLAMABAD: The government on Wednesday said the National Accountability Bureau (NAB), National Electric Power Regulatory Authority (Nepra) or Securities and Exchange Commission of Pakistan (SECP) would be free to proceed against independent power producers (IPPs) for any misdeed or criminality even after they agreed to give about Rs770 billion discount over the remaining 20-year life of their contracts. At the same time, the government is…

Sindh govt to set up 200MW power plant

February 11, 2021February 11, 2021 Admin

The Sindh government has decided to set up a 200-megawatt power plant based on solid civic waste as primary fuel in Karachi as the city of ports generates around 8,000 tons of waste every day. The decision was taken at a meeting chaired by Sindh Minister for Local Government, Information, Religious Affairs and Forests Syed Nasir Hussain Shah and Sindh Minister for Energy Imtiaz Ahmed Sheikh on Wednesday. The meeting decided to develop the project at a fast pace and make it “operational as soon as possible”, said a statement…

Energy ministry warned of LNG supply chain disruption

February 11, 2021February 11, 2021 Admin

LAHORE: Pakistan LNG Limited (PLL) has warned the Ministry of Energy (MoE) of massive disruption in the liquefied natural gas supply chain in near future if Rs6.5 billion payments are not released by the Sui Northern Gas Pipelines Limited (SNGPL). The PLL, which already defaulted with the United Bank Limited (UBL) for LNG supply payment last week, has in a recent communication to the MoE complained that the SNGPL has failed to release payment on an urgent basis despite repeated requests. “Please refer to our letter No. PLL/FA/2021/01/25-01 of Jan…

ANALYSIS: What IPPs ‘deal’ means for power sector investment

February 11, 2021February 11, 2021 Admin

THE government has extracted concessions worth several hundred billion rupees in future payments to the 47 independent power producers (IPPs) set up between 1990 and 2013 by forcing their hand but the ‘deal’ has left a bad taste in the mouths of their investors. The government has secured the lucrative deal in exchange for promises of payment of Rs403 billion it owes to the IPPs. What makes the bargain sweeter for the government is the fact that it will pay only a third of the amount in cash; the remainder…