Two-developer pipeline capacity allocation approved – Journal

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ISLAMABAD: The Cabinet Committee on Energy (CCoE) on Friday approved the allocation of pipeline capacity to two new LNG terminal developers to facilitate their investment in additional gas infrastructure and again decided to dissolve the Pakistan Electric Power Company (Pepco). The company was dissolved. twice in the past.

A meeting of the CCoE, chaired by the Minister of Planning and Development, Asad Umar, “approved the summary presented by the Ministry of Maritime Affairs on the report of the Interministerial Committee (CIM) on the establishment of new terminals”, indicates a press release. .

He said that the CCoE had discussed the report and approved the allocation of the pipeline capacity and asked the concerned authorities to speed up the work of setting up new LNG terminals.

The meeting was informed that the IMC had held 15 meetings between December 2019 and August this year and resolved all outstanding issues, but the oil division and Sui gas companies continued to resist the allocation of the capacity of the pipeline to new private sector terminal developers – Energas and Tabeer Energy.

Cabinet Committee on Energy again decides to dissolve Pepco

The report said the federal cabinet on September 8 last year “ordered the petroleum division to allocate pipeline capacity into the existing pipeline and the planned new pipeline within 30 days.” The Oil and Gas Regulatory Authority (Ogra) also ordered Sui gas companies to allocate 300-350 mmcfd (million cubic feet per day) of pipeline capacity each to the two terminal developers in May this year. . He said Sui gas companies were “reluctant to allocate pipeline capacity.”

It was said at the meeting that the gas companies had denied the existence of any pipeline capacity for all these years. Finally, Sui Southern Gas Company Limited (SSGCL) confirmed that the capacity was available and agreed to allocate it to both terminals. However, SSGCL was delaying the leasing of land at new terminals for pipeline connection points.

“Taking seriously the fact of flouting the order of the regulator”, Ogra once again severely warned the gas companies “to allocate pipeline capacities to new LNG terminals”.

The report said there was a consensus, excluding Sui Northern Gas Pipelines Limited (SNGPL), that 600mmcfd of pipeline capacity was available for new LNG terminal developers and the regulator also confirmed the situation. . He said that SNGPL had a total pipeline capacity of 1,200 mmcfd and a long-term contract of 1,000 mmcfd until 2024, while 150 mmcfd of gas was transferred to K-Electric and 250 mmcfd to SSGCL, leaving capacity unused 600 mmcfd.

The summary noted that gas companies were opposed to deregulating the gas market despite the loss of substantial amounts of gas due to theft and the addition of a circular debt of billions of rupees. The summary advocated deregulating the gas sector such as aviation, telecommunications and banking sectors to reduce the burden on the public treasury and save taxpayer dollars.

The CCoE ordered SNGPL to allocate 250-300 mmcfd to the two new terminals and ordered SSGCL to provide connection and firefighting facilities to the terminals on the same terms and conditions as those granted to the existing terminals. He also ordered the two terminal developers to sign Gas Transportation Agreements (GTAs) with the two gas companies within 15 days and complete their final investment decisions within 60 days of signing GTA.

The committee approved a summary prepared by the electricity division for the “restructuring of Pepco”. This involved the change of nomenclature from Pepco to Power Planning and Monitoring Company (PPMC) and the delegation of human resources functions from Pepco to the respective companies – Discos (distribution companies), Gencos (production companies) and National Transmission and Despatch Company. (NTDC).

The meeting was informed that the federal cabinet had ordered twice – the last in October 2011 – the dissolution of Pepco, but the legal and statutory process could not be completed. The CCoE decided that the “Restricted Company (PPMC) would continue to charge fees to discos, Gencos and NTDC and contact development finance institutions and multilateral agencies to seek support for capacity building. The composition of the new PPMC board of directors will also be changed and the restructuring plan will be implemented by December 31 and new human resources will be hired for the company without delay ”.

The committee discussed a summary filed by the electricity division on the policy direction for operating LNG plants by merit.

The committee reviewed the circular debt report from August this year submitted by the electricity division and appreciated that the increase in circular debt over the past 12 months was only $ 57 billion. of rupees.

Posted in Dawn, October 9, 2021


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