Engro Powergen seeks early gas supply from Badar field
Engro Powergen Qadirpur Limited (EPQL) has urged the federal government to expedite the long-pending approval of a supplemental agreement that will allow it to utilise low BTU gas from the Badar-1 field.
In a letter sent to Power Division Secretary Dr Muhammad Fakhre Alam Irfan, EPQL Chief Executive Officer Adeel Qamar highlighted that despite completing all technical and procedural formalities, including infrastructure readiness and regulatory approvals, the supplemental agreement remains pending, which was submitted to the Central Power Purchasing Agency-Guarantee (CPPA-G) in August 2024.
EPQL, which operates a 225-megawatt power plant primarily on permeate gas from the Qadirpur gas field, entered into an agreement with Petroleum Exploration Limited (PEL) on August 5, 2024 for the supply of 8-13 million cubic feet per day (mmcfd) of low BTU gas from Badar-1.
It came after the National Electric Power Regulatory Authority (Nepra) formally approved the use of Badar-1 gas through a determination issued on February 20, 2024. However, the EPQL's proposal to amend its power purchase agreement (PPA) with CPPA-G to incorporate the use of this indigenous gas has yet to be approved.
The company has cautioned that continuous delay not only undermines the use of cheaper domestic energy resources but also forces reliance on expensive imported fuels amid peak summer demand.
In the letter, the company noted that if approval had been granted by October 2024, EPQL could have generated an additional 122 million units of electricity using the low BTU gas, resulting in estimated savings of Rs787 million for power consumers and $9 million in foreign exchange.
'Infrastructure is ready and we can begin immediate offtake. Moreover, the transaction is based on a take-and-pay model, meaning gas will only be utilised when it is competitive under the economic dispatch merit order,' the CEO said in the letter.
Since commencing operations in March 2010, EPQL has contributed approximately 18.9 billion units of electricity to the national grid, saving the country an estimated Rs89 billion and $1.6 billion in foreign exchange by using indigenous permeate gas.
The company emphasised that this track record of cost-effective generation underlines the urgent need to begin Badar-1 gas supply.
While acknowledging past cooperation from government entities, EPQL expressed dismay over the current lack of progress and called on the Power Division to facilitate early approval of the supplemental agreement.
Given the summer energy crisis, the company said that the delay was becoming increasingly costly and counterproductive to the national energy security goals.
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