LNG supplies under force majeure, not available for power generation, say officials

ISLAMABAD: Government officials said during a public hearing on Tuesday that liquefied natural gas (LNG) supplies were under force majeure and not available for power generation.

Force majeure is a clause included in contracts that allows a party to be excused from its obligations due to circumstances that are beyond its control. The officials’ revelation during the National Electric Power Regulatory Authority (Nepra) hearing thus means that LNG supplies were unavailable due to circumstances that were beyond the relevant parties’ control.

Responding to questions, Central Power Purchasing Agency (CCPA) Chief Executive Officer Rehan Akhtar said LNG supplies were currently under force majeure, but he assured that coal supplies — another source for power generation — through imports were not facing any problems as they mostly came from South Africa and Indonesia, and were unaffected by disruptions in the Middle East. LNG-based power plants have a generation capacity of more than 4,500 megawatts.

An almost a month-long ongoing US-Israeli war on Iran has spilled over to draw in Gulf countries and subsequently resulted in a global fuel crunch. The situation is worsened by traffic disruptions in the Strait of Hormuz — a corridor that had been the route for 20 per cent of global LNG and a quarter of seaborne oil until the war began.

The war has also led to production stoppages, notably by Qatar, which stopped all operations at its LNG facilities on March 2 and declared force majeure two days later, halting supply from a source that accounts for about 20pc of global LNG.

Officials at the Nepra hearing said consumers would be encouraged through a pricing package to better utilise cheaper electricity available during the daytime.

“The cheaper electricity available during daytime will be utilised in a better way, and measures would be taken after taking people into confidence over whatever the situation is,” said Naveed Qaiser, the chief financial officer of the Power Planning and Monitoring Company (PPMC), as he testified at the hearing.

He assured that fuel cost adjustments would not go up by Rs8-10 per unit, saying that the........

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