Rupsha 800MW power plant seeks one-year extension as long-term gas supply remains uncertain

Highlights:

• Rupsha power plant faces uncertain long-term gas supply after commissioning
• Temporary gas allocated only for 107-day commissioning period
• Gas shortages may require diesel use or diverted pipeline supplies
• Project cost reduced by Tk1,736 crore, about 20% overall
• Completion deadline proposed extended one year to June 2027
• Project delayed by gas shortages, technical issues, COVID, Ukraine war

A proposal has been made to cut the cost of the 800MW Rupsha Combined Cycle Power Plant project by Tk1,736.35 crore while extending its implementation period by another year as uncertainty over long-term gas supply threatens its commercial operation despite commissioning nearing completion.

Although Petrobangla has assured a temporary gas supply for the plant's commissioning, officials say there is still no decision on securing gas for regular commercial generation. 

As a result, the plant may have to run on High Speed Diesel (HSD) or receive gas diverted from other power stations under a rationing arrangement if pipeline supplies remain inadequate.

Officials of the North-West Power Generation Company Limited (NWPGCL), the project's implementing agency, also said plans are being considered to supply gas from Bhola to Khulna or through a floating storage and regasification unit (FSRU) proposed for Kuakata.

Infograph: TBS

NWPGCL Managing Director Engr Hasibul Hasan told The Business Standard that Petrobangla had confirmed gas would be available for the commissioning phase only.

"The gas supply is temporary and intended solely to complete the commissioning process. Long-term gas supply for commercial operation of the Rupsha plant remains uncertain. The government will decide on the long-term supply arrangement," he said.

Hasibul said the company's immediate priority was to complete commissioning but alternative plans were also being considered to keep the plant operational afterwards.

"If there is a gas shortage, gas may be rationed by reducing supply to other power plants and diverting it to Rupsha," he said.

According to NWPGCL sources, the assurance given by Gas Transmission Company Limited (GTCL) and Sundarban Gas Company Limited (SGCL) covers only trial operations and does not guarantee fuel for commercial electricity generation.

Under the revised schedule, the 107-day commissioning process will require 1,933.39 million cubic feet (mmcf) of gas.

In response to NWPGCL's request, the Gas Transmission Company said national gas demand currently exceeds supply, making it impossible to provide fuel to all power plants simultaneously.

The company said supplying gas to Rupsha for commissioning may require reducing or temporarily suspending supplies to other power plants. 

To maintain adequate pipeline pressure, authorities are also considering shutting down the Bheramara Power Plant and one NWPGCL unit in Sirajganj during the commissioning period, which could temporarily affect electricity generation on the national grid.

Sundarban Gas Company said the infrastructure required to supply gas for commissioning is ready. However, providing the required volume would require either reallocating gas already assigned to the Bangladesh Power Development Board (BPDB) or a fresh allocation from Petrobangla.

The Energy Division, in its observation, also noted that supplying gas to Rupsha is particularly challenging because the plant is located at the downstream end of the national gas grid, where maintaining adequate pressure is more difficult.

As per the revised implementation schedule, North-West Power Generation Company aims to complete commissioning of both generating units of Rupsha plant by February 2027.

The company stated that the gas supply for the Rupsha 800MW Combined Cycle Power Plant had been assured before the project was approved. It said Petrobangla issued a letter of assurance on 17 February 2017, stating that gas would be supplied to the project by 2020.

The assurance noted that Bangladesh's domestic gas production had limited growth prospects and that imported liquefied natural gas (LNG) would play a key role in future supply. Plans included developing LNG infrastructure, including a floating terminal at Moheshkhali.

Following a proposal from the Asian Development Bank (ADB), a joint committee comprising officials from Petrobangla, GTCL, SGCL and NWPGCL examined the most suitable gas supply option.

The committee concluded that using the existing transmission network, supported by the Elenga compressor station, would be the most effective solution. 

The plan also required the Moheshkhali LNG terminal, the Elenga compressor station and a gas pipeline from Khulna City Gate Station to the power plant. NWPGCL said the pipeline has already been completed.

Later, a gas supply agreement was signed with SGCL on 28 March 2024.

Officials said the government is currently planning to increase gas supply to the country's south-western region by transporting gas from Bhola and installing a new LNG terminal at Kuakata.

NWPGCL said these initiatives are expected to ensure an adequate gas supply for the Rupsha power plant. Once sufficient gas becomes available, the plant is expected to operate at full capacity and provide a stable supply of electricity to the national grid.

Project cost cut by more than 20%

Alongside the proposed one-year extension, the cost for 800MW Rupsha plant has also been revised downward.

The project, approved in 2018, was originally scheduled for completion by June 2022. Its deadline has already been extended three times without increasing the budget. The latest proposal seeks to extend the implementation period to June 2027.

The total project cost has been revised from Tk8,498.64 crore to Tk6,762.28 crore, a reduction of Tk1,736.35 crore, or about 20.43%.

The proposal has recently been submitted to the Planning Commission.

NWPGCL said the project has achieved 94% physical progress and around 58% financial progress. Most construction work has been completed and commissioning is under way.

However, commissioning has been delayed after excessive vibration was detected in the gas turbine of Unit 1. Although bearings were replaced and other corrective measures taken, the problem persisted, making rotor repairs necessary.

Under the earlier revised schedule, Unit 1 and Unit 2 were expected to complete commissioning by June and September 2026 respectively. However, considering the gas supply situation and technical work, both units may now require until February 2027 to enter operation.

According to the project proposal, implementation was delayed by the Covid-19 pandemic, the war in Ukraine and the country's gas shortage.

It also said that although costs increased in some areas because of exchange rate movements, higher fuel prices and increased interest during construction, the overall project cost fell because contract prices were lower than initially estimated.