Latest news with #RLNG
Business Recorder
3 days ago
- Business
- Business Recorder
Punjab power relief funded by profits of two power companies
LAHORE: After the reduction in electricity tariffs of two power companies - Quaid-e-Azam Thermal Power Private Limited and the Punjab Thermal Power Private Limited - there will be cut in power tariff for the consumers but its impact would not be too significant, it has been learnt. 'There will be definitely reduction in power tariff of electricity consumers in Punjab and the relief will be financed with profits earned by said two government-owned power companies,' sources in the energy department said, adding: 'In light of the Punjab cabinet decision, the provincial government would approach Nepra for a reduction in power tariffs for these two plants so that these price reductions get permanence and are reflected in the new tariff.' It may be noted that the Punjab government had established a special purpose vehicle company by the name of Quaid-e-Azam Thermal Power (Pvt) Limited (QATPL) in March 2015 under section 32 of the Companies Ordinance 1984 in Independent Power Producer (IPP) mode with the mandate to build, own and operate a 1180 MW RLNG based power plant at Bhikki, Shiekhupura on fast track. Punjab CM announces up to 40pc relief in power tariffs The Punjab Thermal Power (Private) Limited (PTPL) is a private limited company incorporated under the Companies Act, 2017. It is wholly owned by the government of Punjab through the energy department. The main objective of the company is to establish and operate a 1263 MW thermal power plant based on RLNG at Haveli Bahadur Shah near Trimmu Barrage, District Jhang in Punjab. It may be recalled that the provincial cabinet in its meeting had given nod to cut the power tariffs of these two plants by 30-40 per cent to reduce electricity bills. This move is similar to the federal government's which recently renegotiated contracts with independent power plants (IPPs) to reduce tariffs, the sources added. 'Both the companies had curtailed its profits as well as reduced non-developmental expenditures to materialize this move.' Copyright Business Recorder, 2025
Business Recorder
4 days ago
- Business
- Business Recorder
KCCI urges govt to re-evaluate its energy procurement & pricing strategies
KARACHI: President Karachi Chamber of Commerce & Industry (KCCI), Muhammad Jawed Bilwani, has called upon the government to urgently re-evaluate its energy procurement and pricing strategies to safeguard Pakistan's industrial sector and support economic growth. Bilwani emphasized the need to continue purchasing Regasified Liquefied Natural Gas (RLNG) under existing agreement with Qatar but suggested that it be sold to industries at a reduced rate. The pricing gap, he proposed, can be bridged by supplying indigenous gas to captive power plants at lower rates. This, in turn, would ensure sufficient gas supply to industries at affordable rates, enhance productivity, create employment opportunities and prove favourable for the economy. Bilwani highlighted that the import of RLNG, via six vessels per month, costs the country approximately Rs50.5 billion monthly. He proposed that this gas be provided to industries at Rs40 billion, while the remaining Rs10.5 billion be offset through the supply of locally available lower-cost gas. 'The current energy pricing structure is unsustainable for our industries,' he said. 'With soaring energy tariffs, elevated taxes, and high interest rates, our industries cannot compete effectively on the international stage.' He warned that suspending the supply of 400 million cubic feet per day (mmcfd) of indigenous gas to regions under the Sui Northern Gas Pipelines Limited (SNGPL), including Punjab and Khyber Pakhtunkhwa while relying more on expensive RLNG, poses a serious threat to the industrial sector and the national economy. Bilwani stressed the urgent need to foster an enabling environment to promote industrial growth and enhance exports. He noted that due to the sharp rise in gas tariffs, many industrialists have been forced to revert to biomass sources like rice husk, mustard, sunflower, maize waste, and even cow dung to generate steam, finding it more economical than using industrial gas connections. 'Pakistan currently has among the highest industrial gas rates globally,' Bilwani said. 'It's unfortunate that, to deal with load-shedding and erratic electricity supply, the government itself advised industrialists to invest in captive power plants. Following this advice, businesses spent billions on gas generators, boilers for waste heat recovery, and chillers that utilized jacket water to produce free steam and cooling. All of these installations are now rendered ineffective and financially wasteful.' Bilwani also criticized the government's over reliance on International Monetary Fund (IMF) conditions, stating that such policies are being used to justify decisions that severely harm the industrial base. He urged for meaningful consultation with stakeholders to devise balanced, sustainable energy strategies that consider both fiscal constraints and industrial needs. 'We need a clear roadmap that prioritizes the viability of our industrial sector,' he asserted. 'It's time to move beyond temporary fixes and focus on long-term, strategic planning that ensures economic stability and global competitiveness.' Bilwani concluded by stressing that expecting industries to compete internationally while being burdened with the most expensive energy, excessive taxes, and high interest rates is simply unrealistic. 'If the government or the Prime Minister wants us to compete globally, they must first provide a conducive environment,' he said. 'In the current scenario, I cannot understand how industries are expected to survive let alone thrive.' Copyright Business Recorder, 2025
Business Recorder
28-05-2025
- Business
- Business Recorder
SNGPL tells APTMA all gas-related issues will be resolved on a priority basis
LAHORE: Managing Director Sui Northern Gas Pipelines Ltd (SNGPL) Amer Tufail has assured All Pakistan Textile Mills Association (APTMA) of resolving all gas-related issues of textile industry on top priority. He was talking to leading textile manufacturers and exporters during his visit to APTMA along with a team of senior SNGPL officials including Faisal Iqbal, Deputy Managing Director, Saqib Arbab, Deputy Managing Director and Jawad Naseem, Senior General Manager and other senior management. Earlier, he was received at APTMA by Kamran Arshad, Chairman, Ali Ahsan, Aamir Fayyaz, Former Chairmen, Aamir Sheikh, Faisal Jawed, Muhammad Ali, Danish Aslam, Haroon Ellahi, Shaiq Jawed, Rehman Naseem, Senior Executives, Raza Baqir, Secretary General and other senior executives of APTMA member mills. Amer Tufail said that Textile Industry has a share of more than 60% in the total exports of Pakistan and brings valuable foreign exchange of billions of dollars to the country. As such, incessant operations of textile mills is not only very important for the country but for SNGPL also. He added that export industry has always been extended high priority on supply of gas and SNGPL will continue to extend fully facilitation and cooperation to Textile Industry in order to meet their energy requirements. Amer offered to lay dedicated pipeline to the mills opting to use gas on 24 hours basis so as to save them from any gas outages or pressure issues. Speaking on the occasion, Kamran Arshad highlighted excessive high tariff of gas especially imposition of unjustified levy on supply of gas. He added that levy has exorbitantly raised gas tariff which has become the highest in the region rendering our exporter incompetitive in the global textile market. He continued that tariff of gas supplied by SNGPL is even higher than RLNG price which has tempted the industry to switch over for purchase of gas from SNGPL to the open market suppliers. He continued that electricity supplied by grid now costs Rs 29.60/kWh whereas electricity generated through gas now costs Rs 41.63/kWh. This difference of Rs 12.03/kWh per unit has forced many mills to stop consumption of gas. To illustrate his point, he informed that gas consumption by member mills during April 2025 was only 13 MMCFD as against average consumption of more than 150 MMCFD per month. The chairman APTMA requested SNGPL to take up issue of excessively high gas tariff with the relevant authorities in the Government of Pakistan as well as IMF. Copyright Business Recorder, 2025
Express Tribune
20-05-2025
- Business
- Express Tribune
OGRA greenlights hike in gas price
The Oil and Gas Regulatory Authority (OGRA) has approved an increase in gas prices for consumers of Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) for the fiscal year 202526. The regulator has forwarded its decision to the federal government for formal notification of category-wise consumer gas prices. Under the law, the federal government is bound to issue the notification within 40 days of OGRA's decision. In a statement, OGRA said that under Section 8(1) of the OGRA Ordinance, 2002, it had determined the estimated revenue requirements (ERR) of both SSGCL and SNGPL through its decisions dated May 20, 2025. The determinations have been submitted to the federal government for category-wise natural gas sale price advice, as required under Section 8(3) of the same ordinance. SSGCL had sought an increase in the average prescribed gas price to Rs 2,398.90 per MMBTU, but OGRA approved a raise of Rs 103.95 per MMBTU. Currently, SSGCL's average prescribed price stands at Rs 1,762.51 per MMBTU. Similarly, SNGPL requested an increase of Rs 707.37 per MMBTU; however, the regulator allowed only Rs116.90 per MMBTU. The rise in SNGPL's prescribed price primarily stems from the impact of the re-gasified liquefied natural gas (RLNG) diversion in line with the federal cabinet's decision dated October 30, 2023. Noting the consistently rising RLNG diversion and its influence on pricing, OGRA directed SNGPL to immediately engage with the federal government to review gas supply management. The authority advised the review to consider sectoral energy demand, international contractual obligations and macroeconomic factors. OGRA reiterated that until revised sale prices are advised by the federal government and formally notified, the existing category-wise gas prices will remain in effect. SNGPL has informed OGRA that declining domestic and commercial gas consumption is largely due to price increases that have altered usage patterns. High RLNG tariffs, increased system gas prices, and a levy on captive power plant (CPP) users have driven industrial consumers towards the national grid or alternative fuels. Moreover, gas offtake by the power sector has decreased significantly, from 66% to 33%, over the past few years, leading to a reduction of 150 MMCFD in consumption. The drop is attributed to greater reliance on solar energy and other alternative fuels, which are reducing dependency on expensive RLNG. SNGPL also explained that curtailment of indigenous gas supplies is due to 1,000 MMCFD of RLNG being locked under firm government-to-government agreements. Failure to lift the committed volume could result in heavy take-or-pay (TOP) penalties and potential sovereign default. Meanwhile, demand for RLNG has dropped owing to reduced consumption by CPP users and the power sector. Curtailment of indigenous gas has also been undertaken to maintain system integrity.
Express Tribune
14-05-2025
- Business
- Express Tribune
ECC extends Rs50b loan guarantee
Listen to article The Petroleum Division has informed the Economic Coordination Committee (ECC) that the financial position of its companies has improved and they now have sufficient stocks to retire the debt. The ministry shared the information with the economic decision-making body in a recent meeting while discussing the loan guarantees for Sui Northern Gas Pipelines Limited (SNGPL) for liquefied natural gas (LNG) payments. The Petroleum Division said that cash flows of energy management companies had shown a considerable improvement and sufficient funds would be available to retire the debt. The ECC directed the division to share projections of the SNGPL cash flow with them. It sought the projections in order to retire Rs50 billion worth of bank loans acquired for re-gasified LNG (RLNG) payments. In a recent meeting, the ECC noted that short-term borrowing was made from commercial banks to meet financing needs, despite the fact that sufficient cash flow had been anticipated. It expressed concern that the case had been submitted a year after the expiry of financing. It was explained that SNGPL would be able to pay off the amount in one year. The Petroleum Division pointed out that the ECC while considering a summary submitted on March 14, 2023 had approved that the Finance Division would provide a sovereign guarantee along with the Letter of Comfort in favour of SNGPL for commercial borrowing of Rs50 billion on an immediate basis. Pursuant to the ECC's decision, the Finance Division issued the sovereign guarantee on July 4, 2023 in favour of Allied Bank Limited (ABL), Faysal Bank Limited (FBL) and the National Bank of Pakistan (NBP) amounting to Rs20 billion, Rs20 billion and Rs10 billion respectively against the running financing facilities obtained by SNGPL on account of RLNG payments to Pakistan State Oil (PSO) and Pakistan LNG Limited. The tenor of the financing facilities was one year, which expired on April 12, 2024. Currently, SNGPL is facing a liquidity crunch due to a huge circular debt, subsidies to the export/fertiliser sector, RLNG diversion to the domestic sector and financing costs. Thus, it was not in a position to repay the loans to banks and requested an extension in the validity period of guarantees by one year. The Finance Division conveyed that the Petroleum division had submitted a summary to the ECC, seeking approval for the extension in the sovereign guarantee. Additionally, SNGPL may be advised to apprise the forum of the plan that envisages the servicing and retirement of the guaranteed facility for FY 2024-25. In response to the Finance Division's letter, SNGPL said that its ability to repay the facility was compromised due to the circular debt. SNGPL submitted the following position for the repayment of the loan and the settlement of circular debt by the government. It proposed the conversion of the running finance facility into a long-term loan with a period of 5-10 years. The Petroleum Division further briefed the meeting that the instant matter was not a new case for the allocation of government guarantee; rather it was an extension in the validity period of the already issued guarantees. The summary was circulated to the Finance Division for comments. The Finance Division endorsed the proposal for a one-year extension in the validity period of the already issued sovereign guarantee amounting to Rs50 billion in favour of SNGPL. The Finance Division also stated that the extension would be construed as a new financing facility and the Petroleum Division may direct SNGPL to ensure strict compliance with the financing guidelines on the issuance of sovereign guarantees, dated February 3, 2020, while renewing the financing facilities for another year, after its approval. The Petroleum Division proposed that the ECC may consider approving the extension of the validity period for one year, with effect from April 13, 2024, enabling SNGPL to remain afloat in payment obligations to LNG suppliers as well as to avoid any threat to LNG supply. The ECC considered the summary regarding "Extension in Validity Period of Sovereign Guarantees issued against Running Finance/Musharakah Facility of Rs50 billion obtained from Allied Bank Limited, Faysal Bank Limited and National Bank of Pakistan for RLNG Payments" and approved the extension in the validity period up to June 2026, with the stipulation that it shall be a new facility and that the Petroleum Division shall comply with the guidelines of the Finance Division regarding issuance of sovereign guarantee.
