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K-Electric alleges SSGC reluctant to commit natural gas supply

ISLAMABAD: K-Electric and Sui Southern Gas Company (SSGC) have failed to come on the same page and gave divergent views on the supply of domestically produced natural gas for power production. At a public hearing conducted on Thursday by the power-sector regulator – the National Electric Power Regulatory Authority (Nepra), K-Electric authorities alleged that SSGC was reluctant to commit natural gas supply to power plants, which would help generate cheaper electricity.SSGC officials, however, countered that K-Electric always went to court to settle issues instead of sitting together to find an amicable solution. Nepra held the hearing on proposed production of electricity by K-Electric with the help of alternative fuel – re-gasified liquefied natural gas (RLNG). Nepra Chairman Tariq Sadozai pointed out that consumers would have to face the burden of high tariff if domestic natural gas supply to K-Electric slowed down. However, K-Electric representatives informed the regulator that the Cabinet Committee on Energy had allowed consumption of 60 million cubic feet of RLNG per day (mmcfd) for running its power plants on the alternative fuel. They revealed that K-Electric had also requested SSGC authorities to enhance the supply of domestic gas in order to generate cheaper electricity. K-Electric has been unable to sign a gas sale-purchase agreement with SSGC for the provision of domestic gas. It is currently receiving 130 mmcfd. They told the hearing that SSGC had conveyed that it would provide gas for power plants in line with the available energy. However, they alleged that SSGC was reluctant to set the gas volume in the sale-purchase agreement. The regulator sought a techno-economic analysis from K-Electric, which apprised Nepra of plans to run new power plants on imported gas and of discussions going on for gas import. Giving a comparison, K-Electric representatives said electricity production through diesel cost Rs21 per unit whereas the cost stood at Rs13 per unit if RLNG was used as fuel.

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