First generation RLNG plants fire up in shadow of second generation circular debt

ISLAMABAD: A second generation of circular debt in the gas sector has come into being as three key Punjab-based power projects of about 3,600 megawatts on imported Liquefied Natural Gas (LNG) are now reaching the belated commercial operation dates (CODs).

Informed sources told Dawn the delayed commissioning of these plants had not only compromised full utilisation of LNG terminals but also caused demurrage charges to LNG importers, losses to the gas utilities and payment problems to the entire supply chain. A public sector bank is also reportedly facing challenges because of cash flow problems in the supply chain.

On top, the consumers were the key sufferers in view of increased cost of gas as LNG processing charges of the terminal nearly tripled from committed 41 cents per million British thermal unit (mmBtu) to $1.21 and beyond and compelled the gas regulator to increase the cost of regasified-LNG (RLNG) for consumers.

Published in Dawn, 10th May, 2018