Cabinet Committee Approves Discontinuation of Gas Supply for Captive Power Generation

A meeting of the Cabinet Committee on Energy (CCOE) was held under the Chairmanship of the Federal Minister for Planning, Development, and Special Initiatives, Asad Umar, here on Thursday.

The CCOE discussed a proposal of the Petroleum Division for the moratorium/discontinuation of the supply of natural gas for captive power generation. The proposal only applies to the industries that are connected to the power grid and, therefore, have an alternative source of electricity.

The Petroleum Division briefed the committee that the supply of gas will continue to be provided to all the industries that either utilize gas as an integral part of the process or where the primary utilization is not for power generation.


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The new measure will be implemented in a manner that will not cause disruptions in any industry. The industries that are currently not connected to the power grid will be encouraged to shift from natural gas-based captive power generation to the grid.

The measures will make around 150 MMCFD of natural gas available for use in the power sector in the short term, which will replace the expensive generation of power on the backup fuels.

In the long term, a load of around 3,000 MW is expected to move to the power grid to reduce the average cost of power and aid the reduction of the circular debt buildup. The Petroleum Division emphasized that these measures will increase the overall utilization efficiency of the scarce natural resource as large power plants are at least 30 percent more efficient than the captive power generation units.


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While approving the proposal, the committee directed the Petroleum Division to institute a transparent and verifiable process for the implementation of the new measure and arrange for a third-party verification as well. It also called for sufficient time to be given to the industry to apply to the electric utilities for the new connections.

The DISCOs will expeditiously process new connections and load enhancement applications for industries and ensure the quality of the supply to the industry. The committee also approved the applicability of the policy from 1 February for the general industry and from 1 March for the export-oriented industry.

The meeting was attended by the Minister for Energy, Omar Ayub Khan; the Federal Minister for Information and Broadcasting Shibli Faraz; the Federal Minister for Maritime Affairs, Syed Ali Haider Zaidi; the Advisor to the Prime Minister on Finance, Abdul Hafeez Sheikh; the Special Advisor to the Prime Minister on Petroleum, Nadeem Babar; the Adviser to the Prime Minister on Commerce & Investment, Abdul Razak Dawood; and officials from various divisions.



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