EPQL is a unique project as it converts permeates gas (low-BTU and high sulphur content gas) which was previously being flared, into much needed electricity. Electricity generated is transmitted to the National Transmission and Dispatch Company (NTDC) under the Power Purchase Agreement. EPQL has a Gas Supply Agreement with Sui Northern Gas Pipelines Limited (SNGPL), for allocation of 75 MMCFD permeate gas from the Qadirpur gas field, for the term of the project. Due to the unique nature of fuel supply the company faces a significantly lower risk of gas curtailment. Although the existing source of gas supply from the Qadirpur gas field may deplete over the life of the project, the company is isolated from the effects of gas depletion as its agreements allow it to comingle fuel i.e. run on both gas and HSD. Further under the terms of the Implementation Agreement, the Government of Pakistan is obligated to reimburse the company for fuel conversion costs and subsequent operations on alternate fuel as a gas depletion mitigation option. Subsequently, the company has commenced work on finding a long term alternate fuel option.

During 2015, EPQL demonstrated a billable availability factor of 99.7% compared to 99.9% last year. It dispatched a total net electrical output of 1,424 GWh to the National Grid demonstrating a load factor of 76.7% compared to 92.6% last year. The decrease in load factor this year was primarily on account of a planned major inspection activity carried out in April/May 2015. This maintenance activity is carried out after every 6 years of plant operations. The Plant also conducted planned outages in 2H of 2015 on account of annual turnaround of Qadirpur gas processing facility and other maintenance activities. All these planned outages were billable to the power purchaser under the PPA and were completed well within the allocated time allowing the Plant to come back online well before schedule.

For 2015, EPQL’s revenue was PKR 13,354 million compared to PKR 12,041 million last year. The increase in sales revenue is mainly on account of retrospective billing of Gas Infrastructure Development Cess pertaining to 2013 and 2014. Gross profit for the year was PKR 2,465 million against PKR 2,702 million last year. The decline in gross profit is attributed to higher planned outages and lower demand due to grid issues this year. Other income this year was recorded at PKR 7 million compared to PKR 154 million in 2014. Last year’s other income mainly represents reimbursement for procurement of new rotor through insurance coverage. Improvement in working capital position, lower running finance costs and timely payments to the fuel supplier helped to reduce financing cost this year which stood at PKR 2 million compared to PKR 579 million last year. Overdue from NTDC stood at PKR 1,691 million as on December 31, 2015 vs. PKR 1,210 million as on December 31, 2014. Similarly overdue amount payable to SNGPL on December 31, 2015 was PKR 583 million vs. PKR 232 million in 2014. The company earned a net profit of PKR 1,797 million for 2015 as compared to PKR 2,021 million last year.

Concrete and landmark progress was achieved during the year for financial close. EPTL obtained Generation License from NEPRA effective on March 18, 2015. Subsequently, EPTL also received Letter of Support from Private Power and Infrastructure Board (PPIB) dated April 17, 2015. On May 4, 2015, EPTL entered into Power Purchase Agreement (PPA) with National Transmission and Dispatch Company and Implementation Agreement (IA) and Supplemental IA with Islamic Republic of Pakistan. EPTL also signed Coal Supply Agreement with SECMC on June 7, 2015. Basic engineering studies were initiated and preliminary geotechnical & topographic surveys were also completed during the year.

CMEC has completed Geotechnical & Topographic Surveys.96 Bore holes (Up to 50m depth) have been done and topographic survey of Power Plant Site has also been completed. Piling test activity has been initiated at Power Plant Site by CMEC and 8 confirmatory bore holes have been completed.

During the year, EPTL finalized its envisaged shareholding structure and signed financing agreements with local and foreign lenders. EPTL’s project cost is expected to be ~USD 1,108 Mn of which ~USD 831 Mn is to be arranged through debt while ~USD 277 Mn in the form of equity based on a debt to equity ratio of 75:25. Engro Powergen Limited will be the majority ordinary shareholder in the project with a proposed 51% common equity investment. Rest of the equity is planned from the CMEC Thar Power Investments Limited and other local investors (Habib Bank Limited and Liberty Mills).

Major financing agreements were executed on December 21, 2015. Financial close and disbursement of loan is expected after execution of security documents, issuance of guarantee and completion of legal formalities.