Latest bids of LNG received for Feb, 21: Lowest bid is about twice the long term price obtained by PML-N

[farok84]

We produced electricity with FO and diesel while we rejected to buy LNG in that year. This is another scam on which Ghulam Sarwer was removed. Even in this month (Nov,20) NEPRA slapped Rs15 billion to government on producing electricity from Furnace Oil while government produced 25% less electricity from RLNG based power plants as compared to Last month (October 20).

Hi,

Can you please quote references for these assertions. I can't find reference to Rs. 15B fine, and for that matter, the rest of your post.

 

[Path-Finder]

Hi,

In the same tweet, they also said only 3 tenders were awarded once the demand was confirmed. What good floating a tender when demand isn't confirmed? This seems to be quite rational explanation for not opting to repeat the same thing in 2020 doesn't it?

In your opinion, what benefits could have been extracted from floating tenders in August 2020 for December 2020 delivery that PTI has missed out. Please elaborate in detail.




This is what they have twitted.

'If one wants to compare prices, it shd b made for a full year tht incld all seasons. GoP purchased spot cargoes at avg. $6.84 DES(Delivered Ex Ship)incld all higher cost winter cargoes in Jan,Feb,Nov & Dec 2020.Where all term cargoes received avg of $8.06 DES at18% higher rate "

This clearly mentions average price of all spot purchases to be $6.84/mmbtu and term purchases to be $8.06/mmbtu. They have not clubbed them together.

i suppose tooi wal dont know that you are from oil/gas industry.

 

[muhammadhafeezmalik]

Hi,

Can you please quote references for these assertions. I can't find reference to Rs. 15B fine, and for that matter, the rest of your post.

It is not fine, NEPRA deducted Rs15 Billion from government claim.

 

[farok84]

It is not fine, NEPRA deducted Rs15 Billion from government claim.

Hi,

Can you please provide a reference. The only news related to NEPRA and close to Rs. 15B amount I can find on internet is below;

Rs14b in relief for industries as NEPRA reduces power prices | SAMAA

Pakistan's power regulator, NEPRA, has reduced the price of power for industrial consumers. In a notification, it said the price per unit of electricity is now Rs4.96. That's an Rs8 drop from the previous per unit price of Rs12.96. The concession package has been given for eight months, from...

www.samaa.tv

If you are referring to another piece of news, please provide a link.

 

[muhammadhafeezmalik]

Hi,

Can you please provide a reference. The only news related to NEPRA and close to Rs. 15B amount I can find on internet is below;

Rs14b in relief for industries as NEPRA reduces power prices | SAMAA

Pakistan's power regulator, NEPRA, has reduced the price of power for industrial consumers. In a notification, it said the price per unit of electricity is now Rs4.96. That's an Rs8 drop from the previous per unit price of Rs12.96. The concession package has been given for eight months, from...

www.samaa.tv

If you are referring to another piece of news, please provide a link.

Good day,

During the hearing, NEPRA expressed serious concern over the use of furnace oil in power plants. The Central Power Purchasing Agency (CPPA) informed during the public hearing that it had deducted around Rs15 billion for FO-based power generation.

Nepra likely to allow increase of Rs1.06/unit in power tariff

ISLAMABAD-The National Electric Power Regulatory Authority (Nepra) is likely to allow an increase of Rs 1.06 per unit in Power Tariff under fuel price

nation.com.pk

 

[farok84]

Good day,

During the hearing, NEPRA expressed serious concern over the use of furnace oil in power plants. The Central Power Purchasing Agency (CPPA) informed during the public hearing that it had deducted around Rs15 billion for FO-based power generation.

Nepra likely to allow increase of Rs1.06/unit in power tariff

ISLAMABAD-The National Electric Power Regulatory Authority (Nepra) is likely to allow an increase of Rs 1.06 per unit in Power Tariff under fuel price

nation.com.pk

Hi,

Thanks for the reply and a happy new year.

A better detailed and balanced article, providing arguments of both sides, is published in BR.

Here it is,

Rs1.06 per unit increase in tariffs of Discos calculated
Mushtaq Ghumman Updated 31 Dec 2020

ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Wednesday calculated Rs 1.06 per unit increase in tariffs of Discos for months of October -November, 2020 under monthly fuel price adjustment mechanism, after a fierce fight between Chairman Nepra and CFO, CPPA-G on deduction of Rs 862 million for running expensive furnace oil-fired plants in October.
The increase in October 2020 has been determined at Paisa 29 against Paisa 57 per unit and for November Paisa 77 per unit against request of Paisa 96. The cumulative financial burden on consumers is estimated to be Rs 8.40 billion. The government has not passed on the notified FCA from November 2019 to June 2020, the financial impact of which was Rs 17 billion. It is not clear how the government would adjust this amount.
During a public hearing on FCAs of October-November, 2020, the Authority comprising Chairman Nepra, Tauseef. H. Farooqi, Vice Chairman Saif Ullah Chattha, Member Sindh Rafique Ahmad Shaikh and Member Balochistan, Rehmatullah Baloch raised different queries on generation mix and reasons for violation of Economic Merit Order (EMO).
The hearing was going smoothly, when Nepra's technical team stated that CPPA-G generated around 154 GWh from furnace oil and 7 GWh from HSD based plants costing Rs 1.880 billion and Rs 131 million, respectively.
The team maintained that M&E has recommended a deduction of Rs 862.53 million on account of deviation from EMO, which has been adjusted from the total cost, claimed CPPA-G.
This upset Chief Financial Officer (CFO), Rehan, who is responsible for payment to generation companies. He said that Nepra has deducted Rs 15 billion on this account so far, adding that if furnace oil plants are not to run, then shut them down.
"Nepra is deducting total cost of total generation from furnace oil and total generation from HSD, which was on decimal base. What message are we getting?. System Operator (SO) can explain it in a better way. When an amount of Rs 15 billion has been deducted on RFO so far, then RFO plants should be decommissioned," he added.
In this situation RFO-fired plants should be shut down by paying them capacity, if they are not to be run as per the load requirement of distribution Companies, he maintained.
Rehan said the reasons for operating RFO -based power plants be sought from the NPCC (system operator), as operation of RFO plants is not disallowed under the approved procedure.
After hearing the arguments of CFO, CPPA-G, Chairman Nepra stated that it is like 'the spirit is willing but the flesh is weak' and he has asked the Nepra team to first explain to the CPPA-G on what account this amount is being deducted, adding that CPPA-G has reacted contrary to what he intended.
Director Tariff, Mubashir Bhatti, clarified that Nepra has adjusted only Rs 862 million instead of entire amount of Rs 2.011 billion.
He further explained that Rs 522 million was due to less supply of furnace oil. On this issue, Monitoring and Enforcement (M &E) commented that in October 2020, the firm demand of RLNG was 650mmcfd but power sector was supplied 627mmcfd. This was the reason energy was produced from furnace oil-fired plants. He added that power plants were not provided RLNG as per their demand.
Chairman Nepra was of the view that supply of gas should be ensured as per the allocated quota for the power sector.
General Manager, NPCC, Muhammad Ayub, also supported the viewpoint of CFO, CPPA-G, saying that Nepra should allow operation of furnace oil plants to meet demand or allow load shedding.
Vice Chairman Nepra, Saif Ullah Chattha, lowered the temperature by saying that the regulator is not in favour of load shedding in the country due to fuel issues.
He maintained that loadshedding is neither in favour of domestic consumers, nor the industrial, commercial or agriculture consumers.
Chairman Nepra, who was clearly angry, stated that fuel of billions of rupees has been consumed contrary to economic merit order, and that it would have been better to spend a few million on system's improvement so that a huge financial loss was averted.
On a question, CFO-CPPA-G said that if gas companies do not supply gas to power plants as per the agreements, then they are liable to pay the capacity purchase price to the plant during the period of closure.
However, in case power plant's annual production plan is not affected, then no penalty is imposed on the gas company. However, Nepra official revealed that gas companies have already refused the claims and sent them back to CPPA-G.
The CFO CPPA-G stated that the year’s production plans were not met, and power plants have sent claims of liquidity damages to the CPPA-G.
Nepra has also directed CPPA-G to provide documentary evidence regarding penalties imposed on the gas companies for not supplying gas as per the agreements.
General Manager, NPCC, Muhammad Ayub acknowledged that transmission and distribution system has improved during the last two years under the guidance of the regulator.
On a question of Vice Chairman Nepra about deduction of Rs 682 million, CFO CPPA-G said furnace oil was consumed due to non-availability of gas, which is a system constraint, adding if the amount is not allowed it will be added to the circular debt.
Another important issue, which came under discussion at the Nepra hearing, was that CPPA-G has recovered capacity payment from consumers paid to the power plants during forced shutdown due to non-supply of fuel as per the agreement; but refunds of those damages claimed from gas companies, have not been paid to consumers.
According to a press release, the Authority conducted a hearing in respect of fuel price adjustment, for October and November. After hearing the arguments of petitioner and stakeholders, the Authority reserved the judgment. Nepra further clarified that no decision by the Authority has been made in this regard.
Copyright Business Recorder, 2020

 

[farok84]

Even in this month (Nov,20) NEPRA slapped Rs15 billion to government on producing electricity from Furnace Oil while government produced 25% less electricity from RLNG based power plants as compared to Last month (October 20).

Hi

The article you shared says the government produced 25.59% (1913.99 GWh) of total power generated ( 7479.40 GWh ) from RLNG based power generators in November.

"The share of RLNG based power decreased from 2851.04 Gwh or 27.83 per cent in October to 1913.99 GWh or 25.59 per cent in November."

It also says, generation from RFO was only 0.37% (27.77 GWh) of total power generated (7479.40 GWh).

"The Power generated from furnace oil decreased from 154.47 Gwh or 1.51 per cent in October to 27.77 GWh or 0.37 per cent in November."

Please read the article I shared in earlier post, it should clarify the Rs.15 billion deduction. This amount is for the whole year and not for a specific month. The amount for October is Rs.1 .88 billion for FO based, and Rs.131 million for HSD based, combined Rs. 2.011B. CCPA-G is a Market Operator and it stands to safeguard and protect interests of power generation companies, not the consumers.

"Director Tariff, Mubashir Bhatti, clarified that Nepra has adjusted only Rs 862 million instead of entire amount of Rs 2.011 billion.
He further explained that Rs 522 million was due to less supply of furnace oil."

 

[muhammadhafeezmalik]

Hi

The article you shared says the government produced 25.59% (1913.99 GWh) of total power generated ( 7479.40 GWh ) from RLNG based power generators in November.

"The share of RLNG based power decreased from 2851.04 Gwh or 27.83 per cent in October to 1913.99 GWh or 25.59 per cent in November."

It also says, generation from RFO was only 0.37% (27.77 GWh) of total power generated (7479.40 GWh).

"The Power generated from furnace oil decreased from 154.47 Gwh or 1.51 per cent in October to 27.77 GWh or 0.37 per cent in November."

Please read the article I shared in earlier post, it should clarify the Rs.15 billion deduction. This amount is for the whole year and not for a specific month. The amount for October is Rs.1 .88 billion for FO based, and Rs.131 million for HSD based, combined Rs. 2.011B. CCPA-G is a Market Operator and it stands to safeguard and protect interests of power generation companies, not the consumers.

"Director Tariff, Mubashir Bhatti, clarified that Nepra has adjusted only Rs 862 million instead of entire amount of Rs 2.011 billion.
He further explained that Rs 522 million was due to less supply of furnace oil."

Why they produced 25% less electricity from RLNG instead they opted for HSD and FO based power plants??

 

[muhammadhafeezmalik]

Hi,

Thanks for the reply and a happy new year.

A better detailed and balanced article, providing arguments of both sides, is published in BR.

Here it is,

Rs1.06 per unit increase in tariffs of Discos calculated
Mushtaq Ghumman Updated 31 Dec 2020

ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Wednesday calculated Rs 1.06 per unit increase in tariffs of Discos for months of October -November, 2020 under monthly fuel price adjustment mechanism, after a fierce fight between Chairman Nepra and CFO, CPPA-G on deduction of Rs 862 million for running expensive furnace oil-fired plants in October.
The increase in October 2020 has been determined at Paisa 29 against Paisa 57 per unit and for November Paisa 77 per unit against request of Paisa 96. The cumulative financial burden on consumers is estimated to be Rs 8.40 billion. The government has not passed on the notified FCA from November 2019 to June 2020, the financial impact of which was Rs 17 billion. It is not clear how the government would adjust this amount.
During a public hearing on FCAs of October-November, 2020, the Authority comprising Chairman Nepra, Tauseef. H. Farooqi, Vice Chairman Saif Ullah Chattha, Member Sindh Rafique Ahmad Shaikh and Member Balochistan, Rehmatullah Baloch raised different queries on generation mix and reasons for violation of Economic Merit Order (EMO).
The hearing was going smoothly, when Nepra's technical team stated that CPPA-G generated around 154 GWh from furnace oil and 7 GWh from HSD based plants costing Rs 1.880 billion and Rs 131 million, respectively.
The team maintained that M&E has recommended a deduction of Rs 862.53 million on account of deviation from EMO, which has been adjusted from the total cost, claimed CPPA-G.
This upset Chief Financial Officer (CFO), Rehan, who is responsible for payment to generation companies. He said that Nepra has deducted Rs 15 billion on this account so far, adding that if furnace oil plants are not to run, then shut them down.
"Nepra is deducting total cost of total generation from furnace oil and total generation from HSD, which was on decimal base. What message are we getting?. System Operator (SO) can explain it in a better way. When an amount of Rs 15 billion has been deducted on RFO so far, then RFO plants should be decommissioned," he added.
In this situation RFO-fired plants should be shut down by paying them capacity, if they are not to be run as per the load requirement of distribution Companies, he maintained.
Rehan said the reasons for operating RFO -based power plants be sought from the NPCC (system operator), as operation of RFO plants is not disallowed under the approved procedure.
After hearing the arguments of CFO, CPPA-G, Chairman Nepra stated that it is like 'the spirit is willing but the flesh is weak' and he has asked the Nepra team to first explain to the CPPA-G on what account this amount is being deducted, adding that CPPA-G has reacted contrary to what he intended.
Director Tariff, Mubashir Bhatti, clarified that Nepra has adjusted only Rs 862 million instead of entire amount of Rs 2.011 billion.
He further explained that Rs 522 million was due to less supply of furnace oil. On this issue, Monitoring and Enforcement (M &E) commented that in October 2020, the firm demand of RLNG was 650mmcfd but power sector was supplied 627mmcfd. This was the reason energy was produced from furnace oil-fired plants. He added that power plants were not provided RLNG as per their demand.
Chairman Nepra was of the view that supply of gas should be ensured as per the allocated quota for the power sector.
General Manager, NPCC, Muhammad Ayub, also supported the viewpoint of CFO, CPPA-G, saying that Nepra should allow operation of furnace oil plants to meet demand or allow load shedding.
Vice Chairman Nepra, Saif Ullah Chattha, lowered the temperature by saying that the regulator is not in favour of load shedding in the country due to fuel issues.
He maintained that loadshedding is neither in favour of domestic consumers, nor the industrial, commercial or agriculture consumers.
Chairman Nepra, who was clearly angry, stated that fuel of billions of rupees has been consumed contrary to economic merit order, and that it would have been better to spend a few million on system's improvement so that a huge financial loss was averted.
On a question, CFO-CPPA-G said that if gas companies do not supply gas to power plants as per the agreements, then they are liable to pay the capacity purchase price to the plant during the period of closure.
However, in case power plant's annual production plan is not affected, then no penalty is imposed on the gas company. However, Nepra official revealed that gas companies have already refused the claims and sent them back to CPPA-G.
The CFO CPPA-G stated that the year’s production plans were not met, and power plants have sent claims of liquidity damages to the CPPA-G.
Nepra has also directed CPPA-G to provide documentary evidence regarding penalties imposed on the gas companies for not supplying gas as per the agreements.
General Manager, NPCC, Muhammad Ayub acknowledged that transmission and distribution system has improved during the last two years under the guidance of the regulator.
On a question of Vice Chairman Nepra about deduction of Rs 682 million, CFO CPPA-G said furnace oil was consumed due to non-availability of gas, which is a system constraint, adding if the amount is not allowed it will be added to the circular debt.
Another important issue, which came under discussion at the Nepra hearing, was that CPPA-G has recovered capacity payment from consumers paid to the power plants during forced shutdown due to non-supply of fuel as per the agreement; but refunds of those damages claimed from gas companies, have not been paid to consumers.
According to a press release, the Authority conducted a hearing in respect of fuel price adjustment, for October and November. After hearing the arguments of petitioner and stakeholders, the Authority reserved the judgment. Nepra further clarified that no decision by the Authority has been made in this regard.
Copyright Business Recorder, 2020

Thank you for sharing detailed report.

It further reflects the non-competency or dishonesty of Petroleum Division. It seems PD deliberately imported less LNG so FO and HSD based power plants could be run. They should instead demand the full supply of LNG than to demand to allow to run the HSD or Fo based plants.

Even in this month the RLNG supply has lowered significantly due to ill-planning of PD.

Gas crisis deepens: RLNG supply to power sector slashed considerably

ISLAMABAD: As the gas crisis is intensifying, the government has further slashed the supply to the power sector to just 150-155mmcfd against the actual demand of 240mmcfd, while the RLNG supply to...

www.thenews.com.pk

 

[Patriot forever]

Thank you for sharing detailed report.

It further reflects the non-competency or dishonesty of Petroleum Division. It seems PD deliberately imported less LNG so FO and HSD based power plants could be run. They should instead demand the full supply of LNG than to demand to allow to run the HSD or Fo based plants.

Even in this month the RLNG supply has lowered significantly due to ill-planning of PD.

Gas crisis deepens: RLNG supply to power sector slashed considerably

ISLAMABAD: As the gas crisis is intensifying, the government has further slashed the supply to the power sector to just 150-155mmcfd against the actual demand of 240mmcfd, while the RLNG supply to...

www.thenews.com.pk

The answer is in the article you yourself posted.

'Reports said another LNG cargo, which was due on December 28, has been delayed for two more days on account of the rough weather in the deep sea. And during the two days period, the country cannot put in 250mmcfd RLNG into the system, which would also cause more suffering to the domestic consumers and the system would remain under pressure. Earlier, an LNG cargo from Nigeria, which was due on December 18, 2020, got delayed by four days'

Its only for 2 days and I can not fathom how you would put the blame of delayed Cargo on account of rough weather as incompetence or dishonesty of government.

 

[muhammadhafeezmalik]

The answer is in the article you yourself posted.

'Reports said another LNG cargo, which was due on December 28, has been delayed for two more days on account of the rough weather in the deep sea. And during the two days period, the country cannot put in 250mmcfd RLNG into the system, which would also cause more suffering to the domestic consumers and the system would remain under pressure. Earlier, an LNG cargo from Nigeria, which was due on December 18, 2020, got delayed by four days'

Its only for 2 days and I can not fathom how you would put the blame of delayed Cargo on account of rough weather as incompetence or dishonesty of government.

Why they have not been able establish another terminal?? Capacity building a continuous process, PMLN left more than one trillion rupees for capacity building which this government is trying to use for lowering the amount of Circular Debt by paying this amount to PHPL.

 

[Patriot forever]

Why they have not been able establish another terminal?? Capacity building a continuous process, PMLN left more than one trillion rupees for capacity building which this government is trying to use for lowering the amount of Circular Debt by paying this amount to PHPL.

Construction will begin on one MERCHANT terminal this month while the another one will start by the end of this year.

Can you please share the source of what you posted.

 

[farok84]

Thank you for sharing detailed report.

It further reflects the non-competency or dishonesty of Petroleum Division. It seems PD deliberately imported less LNG so FO and HSD based power plants could be run. They should instead demand the full supply of LNG than to demand to allow to run the HSD or Fo based plants.

Hi,

The article I shared, is not implying what you are concluding.

The demand for RLNG was 650mmcfd (~12,603.5 tpd LNG), 627mmcfd (~12,157.59 tpd LNG) was provided, leaving shortage of 23mmcfd (~445.97 tpd LNG), as per CCPA claim for October 2020. Nepra has asked them to produce documentary evidence for such, as the gas companies have declined CCPA financial claims. Please read the article.

Even if, CCPA claim is accepted, I hope I don't have to explain demerits of importing a separate 63,350 ton LNG cargo to provide 445 tpd (~13,350 tonnes per month), specially (a) in absence of additional storage capacity in our current terminals, (b) lack of firm demand for the rest of tonnage (~50,000 ton LNG).

Even in this month the RLNG supply has lowered significantly due to ill-planning of PD.

Gas crisis deepens: RLNG supply to power sector slashed considerably

ISLAMABAD: As the gas crisis is intensifying, the government has further slashed the supply to the power sector to just 150-155mmcfd against the actual demand of 240mmcfd, while the RLNG supply to...

www.thenews.com.pk

@Patriot forever has already answered in detail all your assertions. Please read his reply.

Why they produced 25% less electricity from RLNG instead they opted for HSD and FO based power plants??

Please read my reply and the article you shared. Your drawn conclusions are in-factual, based on lack of comprehension and perceived notions.

 

[muhammadhafeezmalik]

Hi,

The article I shared, is not implying what you are concluding.

The demand for RLNG was 650mmcfd (~12,603.5 tpd LNG), 627mmcfd (~12,157.59 tpd LNG) was provided, leaving shortage of 23mmcfd (~445.97 tpd LNG), as per CCPA claim for October 2020. Nepra has asked them to produce documentary evidence for such, as the gas companies have declined CCPA financial claims. Please read the article.

Even if, CCPA claim is accepted, I hope I don't have to explain demerits of importing a separate 63,350 ton LNG cargo to provide 445 tpd (~13,350 tonnes per month), specially (a) in absence of additional storage capacity in our current terminals, (b) lack of firm demand for the rest of tonnage (~50,000 ton LNG).




@Patriot forever has already answered in detail all your assertions. Please read his reply.



Please read my reply and the article you shared. Your drawn conclusions are in-factual, based on lack of comprehension and perceived notions.

If there no shortage pf LNG due to poor planning of PD than why cabinet is grilling PD??

BR-ePaper | Jan 05, 2021 | Page Front Page 1

epaper.brecorder.com

 

[farok84]

If there no shortage pf LNG due to poor planning of PD than why cabinet is grilling PD??

BR-ePaper | Jan 05, 2021 | Page Front Page 1

epaper.brecorder.com

Hi,

I am guessing you haven't read the article. If you had, you would have appreciated the lengths Petroleum Division has gone to minimize the effects of ill conceived, poorly planned and hastily executed decisions of PMLN government, as pointed out in the article you have shared.

"The Special Assistant to the Prime Minister on Petroleum further apprised that most of the problems stemmed from the decision of the previous government to introduce the LNG in the country without constructing any storage facility and declaring it as a petroleum product, which cost almost double the locally produced gas. A suggestion was offered that the government should consider declaring LNG as gas through an Ordinance."

As I had said in earlier posts, it is beyond foolishness to import a full cargo to curtail a fraction of shortage, in absence of storage facilities. What should be done with extra tonnage, vaporize it in thin air? For the month of October, that would have been vaporization of ~50,000 ton LNG.