ISLAMABAD - NEPRA has Tuesday allowed K-Electric to use Re-Liquefied Natural Gas (RLNG) as an alternative fuel to overcome the supply demand gap and to provide relief to people of Karachi.
In order to bridge the demand and supply gap and to provide immediate relief to end-consumers, the authority has decided to allow immediate application of RLNG as alternative fuel in the instant case subject to an order of refund for the protection of the consumers, while the proceedings are pending before the authority, said a notification issued by NEPRA.
K-Electric vide letter dated April 30, 2018, requested the authority to allow RLNG as an alternate fuel for its existing power plants. According to KE, the request has been filed in purview of the Cabinet Committee on Energy's (CCoE) directives dated April 23, 2018, wherein Sui Southern Gas Company (SSGC) was directed to increase gas supply to KE under an arrangement of 130 MMCFD of natural gas and 60 MMCFD of RLNG to meet KE's minimum gas requirement of 190 MMCM).
KE also requested the authority to provisionally approve inclusion of RLNG as an alternate fuel with effect from the date of CCoE's directives as according to KE, it started operating its power plants on RLNG with effect from the date of CCoE's directives.
The authority admitted the application of KE on May 9, 2018 and decided to initiate proceedings to modify the existing mechanism of fuel cost component on account of RLNG.
The authority also considered the request of KE for immediate application of RLNG as alternative fuel.
The authority has decided to allow immediate application of RLNG as alternative fuel in the instant case subject to an order of refund for the protection of the consumers, while the proceedings are pending before the authority. This shall also be subject to utilization of minimum quota of 180 MMCFD of gas for KE.
NEPRA has also directed KE to execute Gas Supply Agreement with Sui Southern Gas Supply Company Limited at the earliest. The immediate application of RLNG as alternate fuel shall be subject to the following conditions: Utilization of RLNG shall only be allowed after utilization of the minimum quota of 180 MMCFD of local gas; The dispatch shall be strictly in accordance with the economic merit order; Operation on simple cycle shall not be allowed; Reference fuel price on gas and RLNG shall be the same; Other terms and conditions shall remain unchanged.
The decision will be subject to final decision and an order of refund for the protection of the consumers, while the proceedings are pending before the authority.