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Business Recorder
23-07-2025
- Business
- Business Recorder
PD in a quandary over less RLNG off-take by power plants
ISLAMABAD: Petroleum Division is still in a quandary over less off-take of Regasified Liquefied Natural Gas (RLNG) by the power plants, which is resulting in rapid saturation of Sui Northern Gas Company Limited (SNGPL) system, well informed sources told Business Recorder. 'SNGPL is continuously reporting reduced RLNG consumption by the power sector against its committed demand of 600 MMCFD for July 2025,' said Deputy Director (Tech Gas) Salahuddin Khan. M/s SNGPL in a letter of July 15, 2025 has reiterated that consumption remained 327 MMFCD on July 16, 2025, with a monthly average of 501-MMFCD, leading to surplus gas accumulation that has pushed system pack beyond critical levels. Short on commitment with SNGPL: Power sector uses 28pc less RLNG SNGPL further highlighted that power consumption on July 17, 2025 was recorded at 300 MMCFD, leading to continued gas accumulation in the system, which is unsustainable. 'If RLNG off-take is not immediately increased and maintained as per demand, the resulting high pressures may disrupt re-gasification at terminals, risking cargo discharge delays and potential financial losses in the form of demurrages and take-or-pay applicability. Alternatively, SNGPL shall be constrained to further curtail supplies from local gas fields,' said Directorate General (Gas) Petroleum Division. According to sources, Power Division has been requested to advise the concerned quarters to increase RLNG off-take as per demand for the month of July 2025 with re-coupment of previously unconsumed volumes to ensure smooth operation of the SNGPL system and to avoid any untoward situation in the national interest. On July 10, 2025, responding to the comments of Minister for Petroleum and Natural Resources Ali Pervaiz Malik on underutilisation of RLNG by the IPPs, Minister for Power, Sardar Awais Ahmad Khan Leghari staunchly defended the Economic Merit Order (EMO), declaring that any attempt to alter it would be a 'grave sin' (Gunnah Kabeera). He urged the Petroleum Division to review Liquefied Natural Gas (LNG) contracts—if necessary—just as the Power Division had done with Independent Power Producers. 'Ali Pervaiz Malik is a close friend, and his concerns are valid if the contracts are flawed,' Leghari said. 'Power plants operate under the EMO, which prioritises electricity generation from the cheapest sources. If RLNG plants don't qualify under EMO, they simply can't be operated,' he further explained. National Electric Power Regulatory Authority (Nepra) has been sharing violations of EMO by the System Operator during the public hearings on FCAs, on the basis of which billions of rupees of NGC (former NTDC) were withheld. However, this exercise has now almost been stopped without any reason. Nepra has directed that the System Operator and NGC must present a comprehensive update that includes covering outages of economic power plants, the resulting financial impact, and reliance on out-of-merit generation. The update should also include the status of identified system constraint, progress made, revised completion timelines and associated financial implications. At a recent meeting on gas issues, the representative of Power Division commented that challenges need to be met and disruptions need to be looked into. The Chair responded that the tactical issues would be discussed later and, presently, the focus needs to be on sustainability of the gas sector and how LNG over supply/ less off-take is affecting it. Secretary Petroleum framed the key issues to be addressed by the Committee, namely rationalisation of gas tariffs (for both indigenous and imported gas), synchronisation of LNG demand with the power sector along with resolution of circular debt within the gas sector. Copyright Business Recorder, 2025
Business Recorder
10-07-2025
- Business
- Business Recorder
Minister defends EMO, terms changes ‘a grave sin'
ISLAMABAD: Minister for Power, Sardar Awais Ahmad Khan Leghari, on Thursday staunchly defended the Economic Merit Order (EMO), declaring that any attempt to alter it would be a 'grave sin' (Gunnah Kabeera). He urged the Petroleum Division to review Liquefied Natural Gas (LNG) contracts—if necessary—just as the Power Division had done with Independent Power Producers (IPPs). Leghari made these remarks during a press conference focused on the performance of Distribution Companies (DISCOs) in curbing power sector losses. Highlighting improved operational efficiency, the Minister revealed that Pakistan saved Rs191 billion in FY 2024–25. Power sector losses were reduced to Rs399.7 billion, down from Rs590.9 billion in FY 2023–24. According to documents, amount of total billing was Rs 3.925 trillion, of which share of IESCO was Rs 502.75 billion, LESCO, Rs 995.95 billion, GEPCO, Rs 452.72 billion, FESCO 580.55 billion, MEPCO, Rs 620.32 billion, PESCO, Rs 29.8 billion, HESCO, Rs 156.43 billion, QESCO, Rs 124.60 billion, SEPCO, Rs 92.82 billion and TESCO, Rs 49.25 billion. The figures show reduction in recovery of Rs 132 billion between billing and recovery for FY 2024–25. Insiders have reportedly raised concerns regarding recoveries in the last quarter of the fiscal year especially in five top loss making Discos i.e. PESCO, HESCO, QESCO, SEPCO and TESCO. Power Division, however, has not shared figures of recovery, which creates doubts about the claims of recovery. System constraints: KE says unable to get more than 2,000MW from national grid 'This significant reduction is due to better performance by DISCOs. If these losses had been avoided, it would have been easier to pay off the country's debt,' he noted. Leghari admitted that the performance of Sindh-based DISCOs remained the poorest, and despite multiple efforts, the Power Division had been unable to replace the Boards of these companies. Responding to remarks by Petroleum Minister Ali Pervaiz Malik regarding LNG supply losses caused by underutilization by power plants, Leghari clarified that Malik was referring to contracts signed by previous governments. 'Ali Pervaiz Malik is a close friend, and his concerns are valid if the contracts are flawed,' Leghari said. 'Power plants operate under the EMO, which prioritizes electricity generation from the cheapest sources. If RLNG plants don't qualify under EMO, they simply can't be operated,' he explained. 'I consider any deviation from the EMO a grave sin. If there are issues with LNG contracts, they must be reviewed—just as we reviewed the IPP agreements.' On net metering, the Minister announced that work on revising the rate of return had been completed, and a summary would be submitted to the Federal Cabinet within one to two weeks. 'Our aim is to ensure that net metering remains sustainable and does not impose a financial burden on other electricity consumers,' he said. He emphasized that the current rate of return on solar net metering is not justified and must be revisited. 'If the net metering rate is not revised, it could add Rs3 trillion per annum to the bills of existing consumers,' he warned. ON the matte of K-Electric (KE) and its Fuel Cost Adjustment (FCA), Leghari noted that the Power Division may seek a review of NEPRA's recent decision, citing the Cabinet's role in policy oversight. 'K-Electric is currently drawing 1,600 MW from the national grid, and this may rise to 2,000 MW,' he said. 'If KE draws more power, a uniform tariff should be applied to ensure fairness.' Regarding the Competitive Trading Bilateral Contract Market (CTBCM), Leghari confirmed that a summary for final approval would soon be submitted to the Cabinet. He also shared updates on surplus electricity: 'We are in talks with the IMF and international development partners to utilize 7,000 MW of surplus electricity at discounted rates to support economic growth.' Responding to another question, Leghari revealed that he had written to provincial Chief Ministers requesting the discontinuation of Electricity Duty (ED) from July 1, 2025. 'In the letters, I made it clear that the federal government cannot act as a collecting agent on their behalf,' he said. 'We did what was within the federal government's control at the time. The PTV fee has already been removed from electricity bills. So far, only one Chief Minister has responded regarding the abolition of ED. Once I receive replies from the other three, I will escalate the matter to the Prime Minister.' The Minister further stated that the base tariff had been reduced for FY 2025–26 due to the termination or renegotiation of contracts with IPPs and Government Power Plants (GPPs). He anticipated that the tariff would remain stable throughout FY 2025–26. He also reported progress in negotiations with the remaining IPPs, including wind power producers, promising to update the media on developments. In a stern message regarding electricity theft, Leghari said that in the Lahore Electric Supply Company (LESCO), major industries and furnace oil-based power plants were involved in large-scale theft. 'LESCO has launched a major operation to curb this. In some cases, a single industrial unit was found to be stealing more electricity than an entire village,' he said. 'We will continue these improvements into next year, and losses will be reduced even further. Next year will be customers' satisfaction year. Apna Meter Apni Reading is one of the steps in this direction,' the Minister concluded. Copyright Business Recorder, 2025
