Thursday Jan 07 2021
Web Desk

OGRA approves K-Electric's license to construct and operate pipeline for natural gas, RLNG

Web Desk
Collage showing logos of K-Electric and the Oil and Gas Regulatory Authority (OGRA). Photos: File
  • OGRA has approved K-Electric's license to construct and operate a pipeline that will supply RLNG to upcoming BQPS-III power plant
  • The construction of pipeline will ensure BQPS-III power plant receives the right amount of gas, at the right pressure
  • KE says the 900 MW RLNG-based plant and its timely completion is just one step towards keeping Karachi energised

KARACHI:  The Oil and Gas Regulatory Authority (OGRA) has approved K-Electric’s application for a license to construct and operate a gas pipeline, that will supply Re-gasified Liquefied Natural Gas (RLNG) for the upcoming RLNG-based 900 MW BQPS-III power plant and supplementing fuel requirement of the power plants located at its Bin Qasim Power Complex.

According to an official statement released by K-Electric, the development is a "positive one" for KE as it would be the "first-ever license obtained by the company from the oil and gas sector.

The move, per KE, is a "key step in ensuring that the upcoming BQPS-III power plant receives the right amount of gas, at the right pressure."

"This milestone will go a long way in helping bridge the supply-demand gap in Karachi in the years to come," the statement said.

In the notification issued on January 6, 2021, OGRA announced that it has granted a license to K-Electric Limited to undertake regulated activity related to the construction and operation of a 14-inch wide and 2.4-kilometre long natural gas pipeline along with ancillary facilities.

The pipeline will ensure the transmission of natural gas and RLNG from the tie-in point, Sui Southern Gas Company (SSGC) Custody Transfer Station located at Bin Qasim to KE Bin Qasim Power Complex."

K-Electric had submitted an application for the license on May 18, 2020, so as to ascertain the pipeline would be built in time for the commissioning of the first unit of BQPS-III. 

It is pertinent to note that in the interest of expediting the process, the power utility has agreed to undertake the construction of the pipeline from the nearest SSGC Custody Transfer Station, on a self-finance basis. 

The EPC contractor and the owner engineer for this pipeline project are already on-board, the detail design is already completed, and the pipeline material has already been procured, the statement said.

Now, with the issuance of the license by OGRA, K-Electric said it has immediately started the construction of the pipeline for its timely availability for the commissioning of a 900-MW power plant.

The addition of the 900-MW RLNG power plant, along with the proposed decommissioning of older and less efficient units, will ultimately increase the power utility’s generation capacity and lead to improved service delivery. 

Read more: K-Electric warns of approaching international court if its exclusivity is ended

In the interest of the citizens of Karachi, and ensuring that they face minimal difficulties in the upcoming summer season, work on the BQPS-III power plant is proceeding on a fast-track basis. 

Gas turbines and steam generators have arrived and are waiting to be installed so that the first unit of 450 MW can be brought online by summer of 2021, and the second unit by end of 2021.

While the approval of the 900-MW plant is a vital element towards meeting Karachi’s growing power demands, other commitments also need to be fulfilled in a timely manner.

Heads of agreement with Pakistan LNG Limited (PLL) for the supply of 150 mmcfd of gas for BQPS-III has already been signed, subsequent to which negotiations on the Gas Sale Agreement (GSA) have reached an advanced stage and any potential hurdles need to be resolved as per past commitments by the Cabinet Committee on Energy (CCoE).

Read more: K-Electric, NEPRA chiefs briefly walk out of chaotic hearing as Karachi citizens raise angry chants

The 900 MW RLNG-based plant and its timely completion is just one step towards keeping Karachi energised," the statement highlighted. 

"Even with the commissioning of this plant, NTDC needs to expedite work to upgrade the interconnection facilities at the KDA grid so that power utility can evacuate the promised additional 450-MW from the National grid before summer of 2021."

K-Electric is confident that all concerned stakeholders will continue to lend support in these so that KE achieves its vision of bringing Karachi to a power surplus situation by the year 2022," read the statement.

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