By SKM
July09, 2025
ISLAMABAD: The delay in approval of supplementary agreement by the Central Power Purchase Agency (CPPA) for utilizing low BTU indigenous gas at Engro Powergen Qadirpur Limited (EPQL) has caused an estimated loss of Rs787 million to the power consumers, but also inflicted the $9 million damage to the country in the shape of foreign reserves in 10 months’ period.
This has been highlighted in a letter of Engro Powergen Qadirpur Limited (EQPL) written on June 27 to Secretary of the Power Division (PD) Dr Muhammad Fakhre Alam Irfan.
The letter mentions that Engro Powergen Qadirpur Ltd (EPQL) owns and operates a 225 MW power plant that operates primarily on Permeate Gas from Qadirpur gas field. EPQL executed a Power Purchase Agreement with CPPA-G on October 26, 2007.
Since commencement of commercial operations in March 2010, EPQL has remained high in the Merit Order of dispatch and supplied 18.9 TWh (billion units) of electricity to the national grid operating at a very high utilization factor of on gas. This has resulted in the following benefits to electricity consumers and government of Pakistan that include i) Savings of Rs 89 billion as a result of procuring lower cost electricity from EPQL Forex savings of $1.6 billion by utilizing indigenous resource Revenue of PKR 96 billion for fuel suppliers (SNGPL/ OGDCL) from sale of Permeate Gas which was previously flared
These benefits have only been realized with extensive cooperation and support from the government of Pakistan and associated departments, including PPIB, CPPA-G and NTDC.
To mitigate the effects of gas depletion at the Qadirpur gas field and to further enhance and optimize the utilization of EPQL power plant, EPQL has been working with stakeholders, including PPIB and CPPA-G, to find alternate fuel options. In this context, NEPRA has, via determination dated February 20, 2024 bearing reference NEPRA/TRF-595/EPQL-2022, approved the inclusion of low BTU gas from Badar-1 gas field as an additional fuel source for the operations of EPQL’s Complex and consequently EPQL entered into an agreement with Petroleum Exploration Limited (PEL) for supply of 8-13 mmscfd low BTU gas from Badar-1 gas field. This agreement was signed on August 5, 2024.
On August 26, 2024, and after extensive consultations with CPPA-G, EPQL submitted a draft of the supplemental agreement to the PPA (Supplemental Agreement) for CPPA-G’s review and approval. It is a matter of deep concern that despite a lapse of 10 months, the matter is still pending with CPPA-G, delaying the opportunity for EPQL to generate incremental electricity on low BTU gas from Badar-1.
It is important to note that the infrastructure for supply of Badar-1 gas to EPQL is ready and EPQL management can start offtake immediately upon completion of necessary approvals. Moreover, the transaction is on a Take-and-Pay basis and Badar-1 gas will only be utilized if it is competitive on the Economic Dispatch Merit Order.
The potential savings that could have been realized had the requisite approval been received by October 2024. During this period, EPQL could have generated an additional 122 million units of electricity on this low BTU indigenous gas. This could have resulted in estimated savings of PKR 787 million for the power consumers and Forex savings of $9 million.
The EPQL’s top management has consistently been following up with CPPA-G for approval and has promptly responded to all queries raised by CPPA-G, but the matter remains pending.
EPQL stressed the Power Division’s support for facilitating the earliest completion of necessary approvals in this regard. Ends
