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
