Petroleum Ministry planning one billion cubic feet gas supply for IPPs to cut power tariff

ISLAMABAD (February 05 2003) : The Ministry of Petroleum (MoP) is embarking upon an ambitious plan to supply, by the end of current calendar year, one billion cubic feet (bcf) gas' from new discoveries, to independent power producers (IPPs) and other power producers, which it believes to be part of the system, it is learnt.

The basic idea behind the move is to provide opportunity to the Water and Power Development Authority (Wapda) and Private Power Infrastructure Board (PPIB) to negotiate on tariff with the power producing companies for second downward revision, in return of providing low cost fuel.

An official privy to the decision told Business Recorder that Wapda and PPIB officials have already been apprised of the move and claimed that they have welcomed the initiative.

The official was fully confident that the new idea would work to their expectations and subsequently help Pakistan to get relief in tariff for other sectors such as industry and agriculture, which have been continuously demanding reduction in utility bills for some breathing space.

The official hoped that IPPs and other power producing units would prefer to have a new arrangement on tariff, subject to availability of gas.

The ministry is looking forward for the completion of the Rs 20 billion Sui Southern Gas Company and Sui Northern Gas Company Limited infrastructure development programme for which a schedule has already been issued.

Sources said 25 percent of the additional gas has already become part of the system, and SSGC and SNGPL will bring another 20 percent into the system by the end of February.

The remaining 55 percent, which amounts to 600 mcf gas, would be injected into the system by the end of December this year.

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