Mon. Sep 23rd, 2019

RLNG based power plant: Punjab government to pay differential cost of furnace oil

Aftab Ahmed

Islamabad: The federal government has decided that Punjab government will pay differential cost of furnace oil to run power plant on RLNG in Punjab.

‘In case of provision of RLNG for the power plant at Trimmu, other plants to be operated and run on furnace oil, then differential in the cost of furnace oil and RLNG for the operation period will be borne by the government of Punjab, the federal government said in a decision conveyed to Punjab government.

ECC had approved implementation agreement, power purchase agreement and reimbursement agreement for 1263.2 MW RLNG based public sector power generation project near Trimmu Barrage district Jhang Punjab by Punjab Thermal Power (pvt) Ltd on May 10, 2018.

The RLNG supplier was decided to be the Pakistan LNG Ltd (PLL) for the subject project. It was also decided that in case of privatization of the project in future, ECC before such privatization takes place, shall review and adjust the risk allocation under this agreement and power purchase agreement which is meant exclusively for R-LNG based public sector power projects particularly pertaining to non-supply event in light of the prevailing power policy for private sector power projects at the time of such privatization.

Cabinet committee on energy had decided that gas sale agreement (GSA) would be executed between SNGPL and Punjab Thermal Power Limited in line with GSA of other RLNG based public sector power plants –ie Haveli Bhadur Shah, Bhikki and Balloki. The cabinet body directed power division to work out front demand of LNG for new power plants on that a reliable supply chain can be established by SNGPL. It further directed that gas/sale agreement (GSA) will be executed between SNGPL and Punjab Thermal Ltd in line with GSA of other LNG based public sector power plants.

In light of it, power division had requested economic coordination committee to allow modification of earlier decision taken on May 11, 2018 for signing of the PPA and RA with SNGPL instead of PLL accordingly allow CPPA-G to modify the PPA and RA. The federal government has approved modification and however it decided that in case of provision of RLNG to this plant, Punjab government will face the cost difference of other power plants which run on furnace oil instead of RLNG.

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