ISLAMABAD - Fawad Yousafzai - The government has allocated Rs 3.8 billion for the country’s first-ever re-gassified LNG (RLNG) power plants in the PSDP 2015-16, to be constructed in Punjab.

Earlier, only Rs 1.3 billion were allocated for the evacuation/transmission of power from the RLNG-based power plants and no allocations were made for the plants, sources told The Nation. Now in the revised PSDP Rs2.5bn have been allocated for the power projects, to be utilised through the National Power Parks Management Company, source added. To meet the energy needs of the country the government is planning to import LNG and will use it in power plants to lessen the heavy reliance on furnace oil.

Both combined cycle power plants will be set up in Punjab. The power plants of 1,200 megawatts each will be constructed in Balooki (district Kasur) and Haveli Bahadur Shah (district Jhang) and cost around Rs 178 billion. The source said that the estimated cost of Balooki Power Plant was around Rs 88 billion while Haveli Bahadur Shah would cost Rs 90 billion. He said these were just estimated costs which might go up. The government has set a target of two years for the completion of these projects.

Besides constructing power plants , the government will have to lay 750 km pipeline to carry RLNG to the plants. The estimated cost of the pipeline is Rs 80 billion, sources noted. Since the timely completion of the pipeline project up till June 2017 was in doubt, SNGPL would provide gas to these projects through swap arrangements with SSGCL.

Under this arrangement, for time being, the gas from Sindh would be provided to the power plants in Punjab and RLNG would be provided to Sindh. For this purpose a 48 km long pipeline would be laid for supplying gas to the proposed power plants which would cost Rs 3.7 billion. The National Transmission and Dispatch Company (NTDC) has carried out a load flow study for generating power from the proposed plants and the government has allocated Rs 1.3 billion in the upcoming PSDP for this purpose, the source maintained.

Two companies have already been set up in the public sector, to be working under the supervision of National Power Parks Management Company, namely Ravi Power Park Company (private) Limited and Chenab Power Park Company (private) Limited. The third plant will be constructed from provincial budget.

Experts in the Planning Commission are of the opinion that they preferred gas-fired power plants over furnace or coal-fired power plants but before embarking on the projects with such a huge investment, the government needed to clarify certain things which included the cost of RLNG vis-a-vis oil, remove the concerns about the location of the project, LNG transportation, continuous supply and a detailed feasibility study of these projects. One may ask why these power plants are not being constructed in the coastal areas near the LNG import site with low transportation cost, the source said.

The government is required to remove the reservations of Sindh as, according to Sindh government’s contention, the construction of federally-funded LNG-based projects in Punjab is unconstitutional. The decision in this regard was made by the Cabinet Committee on Energy (CCoE) which, according to Sindh government, had no authority to make such decision and might only advise the Council of Common Interests (CCI), but final policy-decision rested with the CCI.