KARACHI: K-Electric Limited and Bahria Town have signed a memorandum of understanding (MoU) to collaborate in setting-up an LNG based power generation project and a coal-fired power project with a cumulative capacity of 530 MW in Karachi.

K-Electric has also agreed, through a separate agreement signed with Bahria Town, to provide uninterrupted power to Bahria Town project in Karachi.

The LNG based power generation project of around 200 MW installed capacity will be located along Super Highway, Karachi. The coal-fired power plant of approximately 330 MW installed capacity will be setup at a mutually agreed location in Karachi.

The developments come in the wake of the government’s plan to replace existing furnace oil-based plants with LNG-run plants in an attempt to reduce the cost of power generation.

NEPRA has already formulated upfront tariffs for power generation through imported coal as well as Thar coal while tariff for LNG based plant

A Floating Storage and Re-gasification Unit (FSRU), leased to convert liquid natural gas into natural gas, is waiting for a green signal from the concerned authorities to leave for Pakistan from Dubai.

According to NEPRA, the electricity demand for K-electric is surging at a rate of 5.0 percent. The average deficit in the K-electric’s system during FY 2013-14 stood at 978 MW, which is projected to surge to 1,250 MW in the current fiscal year and further up to 1,132 MW by FY 2015-16.

The installed generation capacity of the country is 24,375 MW, of which 21,424 MW is part of National Transmission & Dispatch Company (NTDC) system whereas 2,951 MW is installed in K-Electric system.