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Plan finalised to set up 5,600MW projects

ISLAMABAD: The government finalised on Friday a plan to set up gas-based power projects in Sindh and Punjab of 5,600MW, with those in Hyderabad and Sukkur scheduled to start producing about 2,000MW by May this year.
     The plan was firmed up at a meeting of a ministerial committee headed by Finance Minister Ishaq Dar and comprising Petroleum Minister Shahid Khaqan Abbasi and Water and Power Minister Khwaja Mohammad Asif.
      The cabinet committee on energy headed by the prime minister had directed the ministerial committee to present the plan within a week for its approval and implementation.
      A senior government official told Desi that the plan would be submitted to the prime minister for formal approval by the cabinet committee, most probably on Monday.
      He said the plan consisted of two stages. In the first stage, about 2,000MW would be generated through trailer-mounted small power projects of 20-50MW in service areas of the Hyderabad Electric Supply Company and Sukkur Electric Power Company as a stop-gap arrangement for two to three years because of availability of gas for a short period. The projects are anticipated to minimise power shortage until 2017.
     Under the two separate schemes, the government had already invited bids for 1,000MW onsite projects based on well-head (raw) gas and another 1,000MW projects based on local purified natural gas.
       The last date for filing bids was Dec 31, but it was extended to Jan 15 because of Christmas holidays. In many cases, the defunct rental power projects would be rehired for a short-term period under a revised scheme on a take-and-pay basis and without any mobilisation advance or capacity payments. The bidding results will be on the basis of minimum tariff to be approved by the National Electric Power Regulatory Authority.
       In the second stage, 3,600MW power plants would be set up in Punjab’s load centres where transmission lines are already available. The projects will be based on imported liquefied natural gas (LNG).
       These are in addition to eight coal-based power projects of 5,300MW currently under process as part of the Pakistan-China Economic Corridor project – four in Thar, Sindh, and four in Punjab’s Muzaffargarh, Sahiwal, Rahimyar Khan and Chakwal. They are expected to start commercial production by 2017 or early 2018.
        A power ministry official said the government was planning to set up nine LNG-based power projects at three different sites — Balloki and Bhikki, near Lahore, and Haveli Bhadarjang, near Jhang.
        According to sources, the Ministry of Petroleum and Natural Resources had promised to deliver about 500 million cubic feet per day of LNG by March 31 and subsequently ramp up supplies through a pipeline from Karachi to Lahore in three years.
         To be offered for bidding by the Private Power and Infrastructure Board, the government plans to achieve financial close for the projects in six to seven months.
In the first phase, the projects would be open-cycle and completed in 18 months after the financial close to produce 2,400MW in May 2017.
        In the meanwhile, all these projects will be converted to closed cycle to add another 1,600MW, achieving a planned capacity of 3,600MW by mid-2018.
        An official statement said the meeting had reviewed salient features of the short- and long-term plans prepared by the power ministry to meet energy shortage as directed by the prime minister. Altogether, the measures would add up to 5,600MW to the national grid, it added.
       The finance minister directed that besides power generation, proper transmission facilities should also be ensured. It was the foremost requirement for the success of both the short- and long-term measures, he added.
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