No gas for captive power plants, new connections for industry.

ISLAMABAD -- In a welcome move to enhance power consumption from the national grid facing a capacity trap, the Cabinet Committee on Energy (CCoE) on Thursday decided to ban fresh gas connections and disconnect supplies for captive power plants (CPPs) to existing industrial consumers.

The meeting presided over by Minister for Planning and Development Asad Umar 'approved the applicability of the policy from Feb 1 for the general industry and from March for the export-oriented industry,' said an official statement.

The meeting discussed a proposal of Petroleum Division for moratorium/discontinuation of natural gas supply for CPPs. The policy only applies to industries which are connected to the power grid and therefore have an alternative electricity source.

The decision is based on the fact that cheaper domestic gas supplies were declining and their consumption in inefficient CPPs of industrial consumers was a big national loss. On the other hand, the surplus power generation capacity had become another challenge and a significant part could be absorbed in these industrial units at competitive rates and reliable supplies. There are pending applications for electricity connections for about 3,000MW load, according to Special Assistant to PM Tabish Gohar.

The Petroleum Division briefed the committee that gas will continue to be supplied to all those industries where gas is being utilised as integral part of the process, or where primary utilisation is not for power generation. The new measure will be implemented in a way that no disruption is faced by any industry.

Industry not currently connected to the power grid, will be encouraged to shift from gas-based captive power generation to the national power grid. This process would be completed latest by December this year.

These measures would, in the short term, make around 150 million cubic feet per day (mmcfd) of natural gas available for use in the power sector, which will replace expensive power generation on backup fuels. In the long-term, around 3,000MW load is expected to move to the power grid, which will...