Engro Powergen Limited, an energy arm of the country’s multinational company, earmarked $405 million in investment to set up 450-megawatt of combined cycle power plant, primarily based on re-gasified liquefied natural gas (RLNG), a document said on Monday.
Kolachi Portgen (Private) Limited, a subsidiary of Engro Powergen Limited, is developing the project at the Port Qasim. The electricity will be exported to K-Electric at 220kV via a power evacuation point, located within the project site, said the document.
The country is yet to see the operation of any RLNG-based power plant. Engro’s plant will be the third major project after 3,600-megawatt power plants being set up in the Punjab.
The document said the plant and its equipment will be designed, manufactured, assembled and tested in accordance with the internationally-recognised standards and statutory regulations. “Plant operations shall be compliant to the Pakistan National Environmental Quality Standards and the International Finance Corporation’s guidelines, whichever are more stringent,” it said. EPL is a limited liability company and a wholly-owned subsidiary of Engro Corporation. The plant is expected to be commissioned in the summer of 2019. The company will enter into a power purchase agreement with K-Electric for the sale of energy generated for a term of 30 years. K-Electric has provided its consent on the grid inter-connection study for the project. The preliminary estimates said the investment size of $405 million is likely to be funded 75 percent from debt and 25 percent from equity. Both foreign and local lenders will finance the debts on half basis. The project has already accomplished environment and social impact assessments, grid inter-connection study and feasibility report. The company also received engineering, procurement, construction bids, which are under evaluation.
The document said the project will consume RLNG as the primary fuel, which is likely to be supplied by the Pakistan LNG Limited. Pakistan is suffering from an acute energy crisis. The unreliable power supply is affecting the productive end-uses of power due to which the direct and multiplier benefits of productive activities are foregone and the economy is incurring a loss. The government signed an agreement with the Qatari government for the import of liquefied natural gas, which is a cheaper and environmentally-friendly fuel for power generation as compared to diesel and furnace oil.