ISLAMABAD: K-Electric’s proposal to secure long-term indigenous gas from Sui Southern Gas Company for its 900 MW Bin Qasim Power Station-III should be rejected in its present form because it risks transferring the cost of the plant’s fuel-security gap to other gas and electricity consumers, according to comments filed with the power regulator.
In comments dated 2 October, strategic and security expert Dr Imran Nasir Sheikh has asked the National Electric Power Regulatory Authority (NEPRA) to hold a public hearing and treat the proposal as a change in BQPS-III’s fuel architecture, rather than simply a change of supplier.
BQPS-III was built as an RLNG-based plant, with Pakistan LNG Limited as its primary fuel supplier. That arrangement expired in December 2025. KE now wants indigenous gas added as a primary fuel, SSGC recognised as supplier of both indigenous gas and RLNG, and approximately USD 32.29 million of new compression facilities recognised because SSGC delivers gas at around 5 bar while the plant requires about 30 bar.
The filing does not dispute that BQPS-III requires reliable fuel. Its central argument is that fuel security should not create a permanent entitlement to SSGC’s declining indigenous-gas portfolio.
Where will 130 MMSCFD come from?
KE’s baseload requirement is about 130 MMSCFD, but SSGC’s own record does not demonstrate a surplus of indigenous gas of that scale.
SSGC reported FY2025-26 indigenous-gas sales of 185,689 BBTU, against 207,873 BBTU assumed earlier by OGRA, a decline of 10.7%. It also reported a current-year indigenous-gas shortfall of PKR 104.17 billion.
More importantly, SSGC stated that gas supply from its allocated fields had fallen from 1,192 MMSCFD in FY2017-18 to around 640–660 MMSCFD by December 2025, a decline of roughly 45%.
At 130 MMSCFD, the proposed requirement is therefore not a marginal allocation. The filing asks NEPRA to establish whether the gas would come from new production, be diverted from an existing consumer or require RLNG or another replacement fuel elsewhere.
That leads to the core economic question: if BQPS-III receives cheaper gas, who gives up the molecule and who pays for its replacement?
Pakistan’s gas system is already short. The government is preparing to buy 25 to 26 LNG cargoes for November to February, against 36 last winter, because Qatar’s force majeure still runs into early November. Officials put the need at about seven to eight cargoes in December and ten to eleven in January.
The replacement price is not the indigenous tariff. On 2 October the ICE December 2026 and January 2027 contracts were about $24.5/MMBtu at the hub, before freight and regasification. BQPS-III’s 130 MMSCFD is about one cargo a month, close to five over the winter.
Against the claimed Rs 1,225, about $4.4/MMBtu, the gap is about $20/MMBtu, roughly $80 million a month. Giving SSGC gas to the plant does not create supply. It pushes the shortage onto that winter cargo.PKR 1,225 is below SSGC’s own reported cost KE’s claimed consumer benefit is built around an indigenous-gas price of PKR 1,225/MMBtu.
But SSGC’s FY2025-26 filing reports cost of gas sold of PKR 264.535 billion. Against indigenous-gas sales of 185,689 BBTU, that equates to roughly PKR 1,425/MMBtu before transmission and distribution, depreciation and return.
Including those core costs raises the figure to around PKR 1,755/MMBtu. Even after excluding UFG above OGRA’s benchmark at the level used in the earlier determination, the corresponding figures remain around PKR 1,298/MMBtu and PKR 1,629/MMBtu.
The filing therefore argues that PKR 1,225 cannot simply be treated as an economic cost. If gas is supplied below the cost attributable to it, the difference does not disappear. It is transferred to other gas consumers, future revenue requirements, upstream producers or the wider gas-sector balance sheet.
If SSGC can identify genuinely incremental gas available at a lower cost, the filing says, its source, acquisition cost, transportation charge and delivered price should be demonstrated transparently.
The fuel-security gap predates Hormuz
The filing also questions how BQPS-III reached its present fuel position.
KE’s board approved the RLNG project in August 2017, when the national power system was already moving towards generation surplus. NEPRA’s 2017 State of Industry Report projected surpluses of approximately 908 MW in 2018, 2,009 MW in 2019 and 5,523 MW in 2021.
By the time BQPS-III entered commercial operation in FY2022-23, installed capacity including KE had reached 45,885 MW, while utilisation of de-rated thermal capacity stood at just 34.68%.
The filing therefore asks KE to produce its original comparison of the RLNG plant against Thar coal and greater interconnection with the national grid, where consumers were already paying fixed capacity costs