ECC allows signing of RLNG supply deal for power project

Updated February 27, 2019

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Finance Minister Asad Umar chairs an Economic Coordination Committee meeting. — Dawn
Finance Minister Asad Umar chairs an Economic Coordination Committee meeting. — Dawn

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Tuesday allowed signing of the regasified liquefied natural gas (RLNG) supply agreement between the Sui Northern Gas Pipelines Limited (SNGPL) and the Punjab Thermal Power Company for the operations of 1263MW Trimmu Power Project.

The ECC meeting presided over by Finance Minister Asad Umar also approved about Rs700 million worth of supplementary grants to Balochistan, the Privatisation Commission and national food security division.

Informed sources said the ECC of the Pakistan Muslim League-Nawaz government had decided in May last year that Trimmu’s implementation agreement should be signed with the Private Power and Infrastructure Board (PPIB) under standard terms while a project-specific power purchase agreement and reimbursement agreement should be executed between the Central Power Purchasing Agency (CPPA) and the project company and the Pakistan LNG Limited (PLL), respectively.

Committee also approves supplementary grants amounting to Rs700m

The Cabinet Committee on Energy (CCE) had decided in May 2018 that gas sales agreement would be executed between the SNGPL and the Punjab Thermal Power Limited in line with such agreements of other LNG-based public sector power projects like Haveli Bahadur Shah, Bhikki and Balloki. The CCE had directed the power division to work out demand of LNG for new power plants to enable the SNGPL to establish a reliable supply chain.

The SNGPL had also issued directives that the gas sales agreement be executed between it and the Punjab Thermal Company like other LNG-based public sector projects.

As a result, there was conflict in the two decisions. Therefore, the ECC decided to allow signing of the power purchase agreement and reimbursement agreement with the SNGPL, instead of the PLL, in line with the CCE decision and directed the CPPA to modify the power purchase agreement and the reimbursement agreement approved by then ECC.

Trimmu is the fourth LNG-based project in Punjab allowed by the PML-N government that is expected to start production ahead of coming peak summer for which additional 150mmcfd of gas is currently being arranged, increasing the total LNG supply to four projects to 1,000mmcfd.

The ECC issued directives that in case of suspension of RLNG supply, if Trimmu and other RLNG-based projects were on furnace oil, the differential in the cost of furnace oil and RLNG would be borne by the Punjab government.

Supplementary grants

The ECC approved a supplementary grant of Rs464m for payment to families of deceased employees of the petroleum division (policy wing) under the Prime Minister’s Assistance Package.

It was reported that legal heirs of the officers/officials of the petroleum division (policy wing) who had died, while in service, between June 15, 2013 and February 9, 2015, would be granted all benefits as per the Prime Minister’s Assistance Package issued on Oct 20, 2014.

The ECC also approved another Rs200.075m supplementary grant to the Balochistan government under the “Pur Aman Balochistan Policy”. Launched in August 2015, the policy stipulates provision of funds on equal basis by the federal and provincial governments for encouraging misled individuals (Ferraries) to give up militancy.

The committee approved a request of the Philip Morris Pakistan for export and analysis of tobacco seed at M/S Eurofins’s Dr Specht Lab in Germany. The analysis report would help in production of good quality tobacco in future for domestic use and export purposes.

Published in Dawn, February 27th, 2019