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Power generation

Shift from oil to gas may save Rs. 33 billion a year

May 21 - Jun 03, 2001

The policy of shifting the power generation from oil-fired to gas-fired system can bring a huge saving of Rs33 billion per annum provided the entire thermal power generated by WAPDA, KESC and the IPPs is put on the natural gas.

Currently, the 3 power generating sources are running on oil-based system to produce 11869MW of power in Pakistan. Out of the total thermal power generated by different entities, 5131mw are generated by WAPDA, 5000MW produced by different power producing companies in the private sector and 1738mw generated by the KESC system.

The reduction in cost of power generation by shifting from oil to the gas fired system has been calculated on the basis of cost cutting achieved by the KESC engineers who have switched over 5 units having an installed capacity of 210mw each, located at Bin Qasim Power Station. These units having a capacity of 1050MW have been switched over to gas and are injecting about 800mw a day into the KESC system. The average saving due to switching over from oil to gas comes to about Rs200 million per month, which of course sends a strong signal to economize the cost of power generation in rest of the units irrespective of their entity, whether in the public or the private sector.

The pertinent question which is yet to be answered whether the gas supplying sources have the capacity to cater to the entire need of the power producing companies or not?

Change in the fuel system at Bin Qasim however has practically shown the ways for cost reduction in the power generating sector which consumes over 35 per cent of the total oil imported in Pakistan. Pakistan's import bill for oil was estimated over $3 billion for the current fiscal. This indicates that over one billion dollars are spent on account of import of furnace oil for power generation by the public and private sectors.

Apart from monetary gains, the shifting from oil to gas will have yet another positive impact on the overall environmental conditions in the country. It may be mentioned that as a policy decision, India has made it mandatory for all passenger buses and heavy vehicles to go on LPG or CNG. Pakistan should have adopt this policy for the transport sector much earlier than India to cut the cost of oil imports which is in the region of over $3 billion a year.

In order to streamline the gas economy speedy development of the proven gas-fields is however required on priority basis.

The switching over of 5 Bin Qasim power generating units of the KESC from furnace oil to the natural gas has resulted in a substantial saving of Rs200 million per month due to cost differential between indigenous gas and the imported oil.

The KESC management took a group of the journalists around the Bin Qasim Power Station situated at Gharo Creek, some 40 kms East of Karachi to have a look at the conditions and workings of the power station. Bin Qasim Thermal Power Station, has a total of 6 identical units, each having a generating capacity of 210mw. Currently 5 units are in operation while the 6th unit is closed for overhauling.

Brig. Syed Shahid Mukhtar, Managing Director of the KESC, who also accompanied by the newsmen, said that with the present scenario for the year uptil now, KESC has saved about Rs900 million and will be saving about Rs1200 million up to June 2001. Savings due to conversion from oil to gas come to about Rs200 million a month. KESC is being supplied gas from 60-100 MMCF daily from April 2001 and will be getting up to 176-200 MMCF daily from April 2002.

Spelling out the power requirement in Karachi, Brig. Shahid Mukhtar said that WAPDA and HUBCO are in negotiations to provide a direct link between KESC and HUBCO which means that an additional amount of 1200MW produced by HUBCO will be available for Karachi some times next year. Though this will augment the power supply to Karachi sufficiently at least up to 2005. He, however, was of the opinion that increasing demand for power suggests that more power-producing resources would be needed after 2005.

The KESC chief in his straight forward remarks hold the police, corrupt employees within KESC and a powerful Mafia outside the ambit of KESC responsible for huge Transmission and Distribution losses. He said that the organized Mafia running a multi-million rupees business of stolen copper wires which melted in the foundries of Sindh and Punjab.

When asked how much time will be required to put things in order within KESC, he said level best efforts are underway on every aspect, including generation, transmission and distribution however it cannot be done overnight. He said that ultimately, the KESC has to be run by the civilians, the army people had come to streamline the working system, they would leave as soon as the task was accomplished, he said.