Shahab Qader

Chief Executive Officer and Vice President, Commercial

Engro Powergen Qadirpur Limited

He said in this scenario, Engro Powergen Qadirpur Limited (EPQL), being an indigenous fuel plant, becomes very relevant.

“If we plan to fully utilise our local resources such as low BTU gas and Thar coal, then the power sector will not need imported fuel. Indigenous fuels (such as flared gas, or waste gas, or the low BTU gas) are used by both private and public sectors for a long time. However, the private sector has been more successful than the public sector in optimal resource utilisation making EPQL a key project in the energy fleet of Pakistan,” he added.

The utilisation of permeate gas, which was previously being flared, not only provides social benefits but also helps

in additional revenue for the local companies and the government of Pakistan, Qader said.

Here are the excerpts from an interview conducted with him:

Tell us about the Engro Powergen Qadirpur project?

Engro Powergen Qadirpur Limited (EPQL) marked the beginning of Engro’s footprint in the energy space. The company originated from a novel idea of using waste gas that didn’t have any alternative use and was otherwise being flared. We as Engro have always picked projects, which are unique in nature and; thus, our strategy has been to utilise resources that are otherwise redundant.

The utilisation of Thar coal is another example of an otherwise no use resource. In essence, the Engro Energy theme revolves around creating value of a commodity. EPQL is a publicly listed 225MW CCGPP operating on indigenous permeate gas (high sulphur, low BTU) from the Oil and Gas Development Company Limited’s (OGDCL) Qadirpur gas field. Back then, this project was the only environment-friendly project, as no additional CO2 was being produced for power generation.

Moreover, it was also reaping economic benefits, i.e., forex savings and optimal utilisation of a commodity, which was previously being flared completely.

How many gigawatt (megawatts) have been generated from the Qadirpur power plant so far?

EPQL plant over the course of 12 years has positively contributed to the consumer and the national electricity basket by generating approximately 16,127 billion units of energy, saving billions of rupees.

What is permeate gas or Low BTU gas? How do Engro use it?

In Pakistan, the low BTU gas was initially utilised for the fertiliser sector. The low BTU gas reservoirs are in Mari, Kandhkot, Qadirpur and Uch. Qadirpur has been the biggest field for the low BTU gas since 1995. However, that’s not the case now, as the permeate gas, which is a form of low BTU gas with high sulphur content in Qadirpur, is now depleting. Qadirpur field commenced production in 1995. The gas from this field had higher sulphur content and; therefore, the membrane method was used to purify the gas producing two streams: purified gas and permeate gas.

Permeate gas being a high sulphur, was not suitable for the pipelines and resultantly was flared. Approximately 80 to 90mmscfd of permeate gas equivalent to 50,000 to 55,000 million BTU/day, in terms of heat content, was flared between 1995 and 2010.

Our vision revolved around utilisation of this flared gas where we saw the opportunity and potential to display our engineering excellence, risk taking appetite and innovation skills. Therefore, we decided to come into power generation under the 2002 policy. In 2005, Engro pitched the flared gas power project proposal to the government.

The permeate gas allocation was awarded to Engro. 9E technology of General Electric was deployed for the maximum utilisation of gas. Resultantly, EPQL was set up as a 217MW power plant with a commercial operation date in 2010.

What is the potential of permeate gas or low BTU gas? What’s your expectation from the government to facilitate this indigenous project?

As mentioned earlier, the permeate gas in Qadirpur is now depleting. At its peak, it was producing 600mmscfd, while today it is producing 200mmscfd and this trend of depletion will continue. However, there are also some reserves in Kadhara near Sukkur, Badar field and some other concessions held by the private players. Overall, the Ghotki area is the capital of low BTU gas and still has potential.

Moreover, there is still a lot to be explored in the low BTU realm. Coming back to EPQL, the gas from the field has started depleting and in the near future, it will drop below the level required to operate. Going forward, we have two options: either we shut down the plant and flare the gas, or co-mingle the gas with an alternative fuel such as high-speed diesel (HSD) or regasified liquefied natural gas (RLNG) or another low BTU gas.

Ideally, the alternative fuel should be cheap and environmentally-friendly, for which we are already actively engaged with the government.

How long will the reserves of permeate last?

EPQL has an estimated life of 25 years, which essentially means that the plant will remain available for electricity generation for another 13 years.

At the time of project commencement, it was expected that the gas from the field would deplete in five years from 82mmscfd to a point where it would not be enough for the plant, which was around 62mmscfd. It was also projected that the process of depletion would complete in two years, which meant that there would be no gas in 2017. However, none of that happened. Instead, the project lived beyond its contemplated life. Moreover, the gas dropped below 62mmscfd level in 2018, translating into 60 per cent additional gas from the plant. We are sitting in 2022, and there is still gas being produced from the field. However, the field will eventually deplete and a co-mingling fuel will become
inevitable to utilise this indigenous precious resource.

What are the challenges and problems Qadirpur plant is facing?

Like every plant, Qadirpur plant has also been facing several challenges that we always take as an inspiration to move forward. For instance, the circular debt has been a persistent problem and the root causes behind the accumulation of the circular debt are high transmission and distribution (T&D) losses, low recovery, power theft and expensive fuel mix.

As mentioned earlier, the gas supply from Qadirpur gas field is depleting, which is a concern but we are hoping for the best outcome to present. Despite the outbreak of the pandemic and such challenges, EPQL remained focused on its mission to overcome such obstacles and pave the path to contributing positively to our energy sector.

In 2020, when the international fuel prices crashed, EPQL’s merit order position and consequently dispatch from the plant was severely affected, which resulted in non-utilisation of indigenous fuel. However, as the global economy is showing signs of recovery from the pandemic, the commodity price trend reversed last year, pushing EPQL up the merit order and currently sitting at the 10th position.

On the contrary, addition of new plants that rank above EPQL in merit order, as well as plants that run out of merit, may pose a challenge to EPQL’s load profile.

If the government permits the use of alternative fuel? How will it benefit the common people?

Due to imported fuel reliance for electricity generation, Pakistan has one of the highest electricity prices in the region for both households and even the industrial sector, compared with other regional economies. However, if we plan to fully utilise our indigenous resources, such as low BTU gas and Thar coal, we will not need imported fuel for the power sector.

Full utilisation of indigenous resources will not only ensure energy security but also make electricity pool price affordable for the nation.

In essence, at Engro, we take every challenge as an opportunity and; thus, always focus towards finding a solution, which creates a positive impact for both the country’s economy and its nation.