ISLAMABAD - K-Electric Thursday alleged that Sui Southern Gas Company Limited (SSGCL) was not ready to sign Gas Sales Purchase Agreement (GSPA) as the gas company was reluctant to commit supply of indigenous gas supply for power plants.

However the allegation was rejected by SSGCL and counter alleged that K electric was not ready to settle the issue bilaterally and was moving to court for the settlement. The allegations were traded by K Electric and Sui Southern Gas Company Limited (SSGCL) in a public hearing conducted by National Electric Power Regulatory Authority (Nepra) here.

The hearing was conducted on the request of K-Electric for using Re-Gasified Liquefied Natural Gas (RLNG) as an alternate fuel for its existing power plants.

In its letter for the Modification of Generation License, KE said that the proposed change will improve availability of generation plants due to option of RLNG, however, the same will be achieved at the cost of increase in tariff to consumers, as it is thrice as expensive as Natural Gas. In view of existing situation affecting consumers, no other cheaper option is available to KE, hence we request Nepra to approve our request for modification with immediate effect to include RLNG as an alternate fuel source for existing plants as mentioned in the enclosed document.

During the public hearing, Nepra Chairman, Tariq Sadozai, observed that burden would be faced by the consumers if K electric gets less local gas for its power plants.

Officials of K-Electric said that cabinet committee on energy had allowed to use 60 mmcfd RLNG to operate power plants on alternate fuel.

Official of K-Electric and SSGCL traded allegations against each other over supply of indigenous gas to the K-electric power plants. K electric alleged that authorities of SSGCL were reluctant to commit supply of indigenous gas supply for power plants to generate cheaper electricity were not ready to sign gas sales purchase agreement (GSPA).The authorities of SSGCL alleged that alleged that K electric used to move court to settle issues instead of sitting together to find amicable solution.

Official of the KE further said that they had requested SSGCL to enhance supply of local gas for power plants to generate cheaper electricity. They further said that KE had been unable to sign gas sales purchase agreement (GSPA) with SSGC for supply of indigenous gas for power plants.

It was informed that KE was using 130 mmcfd gas for power plants to generate electricity.

K-Electric official further said that SSGCL had conveyed that they would provide gas in line with the gas availability and was reluctant to set the volume of gas to be provided to KE plants in gas sales purchase agreement.

The representatives of SSGCL informed during the meeting that demand for consumers in domestic sector had increased and alleged that K electric used to move court to settle issues instead of sitting together to find amicable solution.

The regulator was informed by K-Electric that  new power plants would be run on imported RLNG and negotiations was going on regarding import of gas.

Nepra sought details of techno economic analysis from K electric. Officials of the K-Electric informed that cost of electricity through diesel-based plants was Rs 21 per unit whereas it would cost Rs 13 per unit on imported gas RLNG.

The Nepra chairman said that KE plants were duel fuel and they had infrastructure of diesel- based plants. He said that consumers could be relief of load shedding if diesel- based plants could be run. He said that KE should apply for tariff for diesel- based plants as they had infrastructure in place.

After hearing, Nepra reserved the judgment regarding running power plants of KE on alternate fuel RLNG.

It is pertinent to mention here that in April this year the Cabinet Committee on Energy (CCoE) has ordered SSGCL  to increase gas supply to KE under an arrangement of 130 million cubic feet per day (mmcfd) of natural gas and 60 mmcfd of RLNG to meet KE's minimum gas requirement of 190 mmcfd.

On the basis of CCOE's decision  the KE had filed an application before Nepra seeking inclusion of RLNG as an alternative fuel with effect from the date of CCoE's directives when it started operating its concerned power plants on RLNG.

In its interim order in June , the power-sector regulator has allowed K-Electric to use imported gas - re-gasified liquefied natural gas (RLNG) - as an alternative fuel for power generation, but on the condition that it will first consume a minimum 180 million cubic feet per day (mmcfd) of locally produced gas.

The decision to use RLNG as an alternate fuel will increase the price of electricity for Karachites, RLNG is thrice expensive than indigenous gas.