ISLAMABAD: Hectic efforts are being made to inaugurate the 404MW Uch-II power project despite the fact that the project is set to cause financial losses to public sector companies and unlikely to reduce energy shortage in the country.

The project, based on dedicated Uch gas field of non-pipeline quality, has just completed final testing to achieve commercial operation but its three key components are either non-existent or incomplete, making it a fit case of capacity charges without providing electricity.

“The 70km transmission line from Shikarpur to Sibi to evacuate electricity is non-existent because of faults on part of the state-run National Transmission and Dispatch Company (NTDC). The Oil and Gas Development Company (OGDCL) has not completed the required above-surface facilities for gas gathering and processing and H2S removal. Even the power plant’s key parts of steam turbine are yet to arrive,” an official of the ministry of water and power told Dawn.

The inauguration ceremony to be attended by Prime Minister Nawaz Sharif on April 7 (today) has been postponed at least for two weeks on the request of Uch Power because of the testing problem.

“The second reliability run test has now been successfully completed,” said Sami Rafi Siddiqui, a spokesman for the Private and Power Infrastructure Board (PPIB). The plant has achieved commercial operation date, he said.

But this had been possible only because of diversion of purified gas quantities from Uch-I plant whose couple of turbines of 370MW capacity were shut down to help Uch-II to complete its reliability test, another official said. This was unfair on part of the power authorities to facilitate a private company, he added.

Under similar circumstances in October 2000, a former Wapda chairman, Gen Zulfiqar Ali, had repeated tests for nine times for Uch-I.

Uch Power is now entitled to capacity payments for 988MW (of two plants) without providing more than 650MW of electricity because of faults on part of the government entities. If the parties take the risk of transmitting more than 700MW, the national grid would hardly sustain the pressure and collapse with cascading power breakdowns throughout the country, a former managing director of the PPIB said.

Responding to a question, Mr Siddiqui said he could confirm that Uch-II had conducted the reliability test but was not aware if some turbines of Uch-I had been shut down to help make it happen. He said the OGDCL had provided gas under the gas supply arrangement.

He said he did not know if the existing transmission line was capable of simultaneously evacuating 550MW of Uch-I and 404MW of Uch-II.

An official said that apart from financial losses to be caused by the project, over 250 staff working at the power plant and gas field were at risk. He said the OGDCL, instead of taking advantage of force majeure clauses, was trying to cover up its inability to complete legal and technical obligations.

“The project for gas gathering and processing facilities, specifically the H2S removal plant, would take at least another six months to complete while transmission line will not be completed in about a year,” according another official.

Having failed to appoint a turnkey EPC contractor by April 2011, the OGDCL board of directors, in a desperate attempt, decided to undertake the project on its own. It floated separate tenders for all major pieces of equipment and appointed a local firm to put it together but failed to achieve the objective.

The OGDCL therefore has been left unprepared to meet per specifications contractual quantities of 220mmcfd gas to Uch-I and 160mmcfd to Uch-II, simultaneously. Sources in the OGDCL confirmed that as a temporary solution, it is using the surplus processing capacity in Uch-I to intermingle the processed and unprocessed gas to achieve 360-380mmcfd in the ratio of 260mmcfd (processed) and 120mmcfd (unprocessed). However, in doing so, the OGDCL will be breaching the post-COD contractual H2S cap of 15ppm.

A premature COD of Uch Power carries serious safety hazards for workers at Uch gas field, Uch-II plant and any populated areas close to the pipeline. Knowing that Uch gas field’s additional facilities will not be operational for several months, the mixing of unprocessed gas is not only hazardous but also a breach of conditions for its lease.