Engro Energy gets gas allocation

Islamabad: The Ministry of Petroleum and Natural Resources has allocated gas to 'Engro Energy Pvt Limited' (EEPL) for 226.5 MW power generation plant to be located at Qadirpur (Sindh).

However, gas allocation will automatically be terminated, without notice to the company or any further action by the GoP, upon termination of the Letter of Support (LoS) or if the company fails to achieve financial close within the stipulated time period as mentioned in the LoS of August 10, 2007, issued by the Private Power Infrastructure Board (PPIB) to the company.

Official sources told Business Recorder that the company has been intimated that gas allocation would be for a term commencing from the date gas is first required for the testing of the complex and continue until December 31, 2014 or such date as permeate gas is no longer available from Qadirpur field.

PPIB further said that gas allocation would have a firm delivery obligation subject to the availability of permeate gas from Qadirpur filed, commencing on the Commercial Operation Date (COD) as defined in the power purchase agreement ending on December 31, 2014(or such later date as permeate gas is no longer available from Qadirpur field in connection with the gas supplier's operation of the Qadirpur field) for upto 75 mmcfd.

The gas, to be supplied from Qadirpur, would be low British Thermal Unit (BTU) with such quantity and other characteristics as are agreed by the company and the gas supplier and incorporated in the Gas Supply Agreement (GSA).

The gas allocated to the company would be supplied by Sui Northern Gas Pipeline Limited (SNGPL) for which both the company and the gas supplier have been authorised to enter into negotiations and finalise GSA with terms and conditions mutually agreeable to the parties.

According to PPIB, allocation of gas does not mean that it is a commitment or guarantee by the GoP (a) that negotiations of the company and gas supplier would result in a mutually agreeable GSA or (b) of the performance of the gas supplier under the GSA following its execution by the parties or (c) of the sufficiency of gas reserves in (or the availability of permeate gas from) Qadirpur gas field or the requirement of the company.