ISLAMABAD, March 12: The Pakistan Petroleum Limited (PPL) has issued one-week notice to terminate gas supplies to Water and Power Development Authority (Wapda) for continued default in payments that would suspend power generation from the 1600mw Guddu Thermal Power Station.
“We have issued them (Wapda) gas supply termination notice as a last resort. Nobody is going to stop that except payments in full before March 18,” a senior PPL official said here on Tuesday.
Wapda has to pay a total of around Rs4.5 billion to the PPL, the largest and pioneer gas producer in the country.
The PPL official said around Rs3 billion were originally outstanding against the power utility that was agreed to be settled but nothing happened on ground. Another Rs1.5 billion had piled up for gas supplies over the last three months, the official said.
As a result, supplies from Kandhkot gas field to Guddu Thermal Power Station would be terminated on March 18, the official said. “Wapda has been making minimal payments to get away with defaults. We have raised our problems at every level but they don’t respond,” said the PPL official.
The Managing Director of the PPL, Munsif Raza, had also written a letter to the minister and secretary petroleum last weekend to intervene into the matter and take up the matter at the highest government level for release of payments by Wapda in view of consequent power breakdown in the country.
Wapda’s hydel power generation has already come to almost zero because of both the reservoirs touching their dead levels.
Maximum reliance on fuel oil-based power generation despite having a substantial natural gas mix has increased Wapda’s fuel bill from around Rs1.5 billion to Rs3 billion in the recent months.
The PPL official said Secretary Petroleum, M. Abdullah Yousuf, has been talking to Wapda and urging them to make payments and there has been no effective implementation of the old arrears of Rs3 billion agreed to earlier.
“This is our last resort. We have been under pressure from our creditors and there is no resolution,” said the official. When contacted, senior Wapda officials were not available. Khalid Ahmad, Wapda’s PRO, promised to respond to PPL claims in writing but did not do so till late night.
Except for a nominal quantity to Sui Southern Gas Company (SSGC), Kandhkot town, gas from Kandhkot field is supplied to Wapda’s Guddu station.
The government is already under pressure from the donor agencies to empower oil and gas companies under the law to discontinue supplies to power utilities who fail to make payments in time.
The World Bank had pressed for the powers in view of a continuous inter-corporate circular debt in the petroleum sector that kept balance sheets of various oil and gas companies in the red for over a decade now.
