ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) is considering disconnecting Captive Power Plants (CPPs) from January 2025, a move requiring federal government engagement due to its complexities and economic impact.
On Tuesday, OGRA finalized the Review of Estimated Revenue Requirement (RERR) for Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) for FY 2024-25. The determination has been forwarded to the federal government, which has 40 days to decide under the OGRA Ordinance 2002.
Key Details:
Revenue Impact: If CPP disconnections proceed, SNGPL’s revenue requirement would stand at Rs560.161 billion (Rs1,746.22 per MMBTU), reducing the available financial cushion to Rs7.89 billion.
Gas Redistribution: Disconnection would necessitate diverting 12,807 mmcf of RLNG to system gas consumers and rolling over five RLNG cargoes (5,836 mmcf). Additionally, surplus RLNG would lead to curtailed local supply from January to June 2025.
Policy Status: While no formal directive exists, the petitioner cited verbal advice from federal authorities to disconnect CPPs, raising concerns among industries during a public hearing in Lahore.
Consultations and Challenges:
A series of meetings with Petroleum Minister Musadik Malik and managing directors of SNGPL and SSGC discussed issues including access to the national grid, surplus natural gas volumes, RLNG integration, and revenue reductions. Industries have voiced opposition to the disconnection, citing potential operational and economic disruptions.
OGRA’s determination highlights the need for careful policy deliberation to balance energy supply, revenue stability, and industrial concerns.
Story by Wamiq Iqbal
