What's new

Thar coal project achieves $2bn financial close after govt guarantee

Yes Sir, aap ney baja irshaad kiya hey, but it still does nothing to improve the quality of Thar coal. As mentioned above, it has a lot of water in it, but what is less well known is the amount of dirt and rocks mixed in. Water can be evaporated out, but getting such non-combustible debris out is not easy.
App na b baja irshad kia ha, i was not arguing about the quality of Thar coal. :)
Also you must be aware of technology that can use this coal efficiently for power generation. What i hope is that we keep working on other options as well that are even better then this one. Wind energy for example. Pakistan also have HUGE hydro power potential and need to exploit that too.
 
App na b baja irshad kia ha, i was not arguing about the quality of Thar coal. :)
Also you must be aware of technology that can use this coal efficiently for power generation. What i hope is that we keep working on other options as well that are even better then this one. Wind energy for example. Pakistan also have HUGE hydro power potential and need to exploit that too.
Our salvation lies in hydro and nuclear. Solar is too expensive to afford.
 
Our salvation lies in hydro and nuclear. Solar is too expensive to afford.


Hence the point:
App na b baja irshad kia ha, i was not arguing about the quality of Thar coal. :)
Also you must be aware of technology that can use this coal efficiently for power generation. What i hope is that we keep working on other options as well that are even better then this one. Wind energy for example. Pakistan also have HUGE hydro power potential and need to exploit that too.
 
Our salvation lies in hydro and nuclear. Solar is too expensive to afford.
Hydro and nuclear power plants take a long time to build (5+ years). On the other hand Gas/Coal plants will take much less time (1-3 years). Investment should be allocated to different sources of generating electricity. Some projects will aim to add more capacity to the grid in the short term and others will in the medium and long term.
Solar is expensive but there are ways to implement it. Don't invest in large solar parks but make it possible for the vast population to buy and install on their house roofs. Benefits of this are two fold: No new transmission lines are needed and energy is produced where it is needed. Upgrade the grid so that people can sell the electricity to the grid when they produce more than what they need to use (similar to systems in EU). This will require no battery bank but with one limitation as if the grid is down then no electricity. I am sure a hybrid system can be employed to overcome this problem. This will accelerate the adoption of solar generation with GoP only investing in upgrading the grid (which eventually they will have to).
 
Hon Sir,

I am in total agreement with you on the economic side of the things. I have been making my ends meet as a Petroleum / Energy consultant for the last 5 years and must have looked at more than 100 feasibility studies of various refinery, exploration & power projects, but did not come across guaranteed minimum Rate of Return except in Pakistan. I also agree that power plants have 25 to 30 year life cycle and cost of clean-up & dismantling the plant are often included when working out the levelized cost of production.

This trend actually started during the Benazir Bhutto’s term of office. GOP had no funds to invest in power projects and guaranteed Returns were offered as inducements. The fact that Mr 10% was making his fortune by getting extra ordinarily profitable IPP’s approve by his wife to earn large commissions may also have something to do with it. I am aware of some projects in Punjab which are shut due to lack of natural gas but GOP is still paying the agreed Return on original investment!!

I am aware of the case of HUBCO plant. One of the Gulf based oil companies were negotiating sole rights for fuel oil supplies to 1290 MW HUBCO power plant when the plant was under construction and offered to invest in the fuel pipeline from Port Qasim to Hub.

I was surprised to learn that they were being guaranteed 15% return on investment The project was dropped because of exorbitant cost of risk insurance on the investment. HUB plant is now being expanded. I had come across the following last year.

Quote

He said the National Electric Power Regulatory Authority (Nepra) had capped upfront fee for Sinosure (insurance cost) at seven per cent, but because of the presence of circular debt, the company asked for a fee of 9pc for credit risk insurance.

“Now, China has agreed to cap fee at 7pc and therefore this issue has been resolved,” he added.

He said that tariff for coal based power plants had been estimated to reduce by 10 cents per unit from existing 22 cents per unit.

http://www.dawn.com/news/1158111

UnQuote

You can see the problems foreign investors face in Pakistan. 7% credit risk insurance! Hence very generous inducements are needed to attract investment.

As far as setting up the plant at Karachi or at the mine head; it all depends upon conditions of the agreement. I am sure you are aware that economic viability is largely dependent upon the assumptions used in the feasibility analysis. For example should GOP desire that plant should be set up at Thar for the economic upliftment of the area; they would offer higher guaranteed return than for the one in Karachi.

Additionally, Karachi is already highly polluted and coal based plants especially in the third world countries are notorious pollutants; discharging lot of poisonous gasses in the desert many be preferable, therefore extra economic inducements to make the plant viable at Thar.

By the way, water is scare in Karachi as well. I am sure that underground water would probably be available at Thar. However, most of the underground water in that area is saline and a water treatment facility would be required to make it usable increasing the capital investment.

I am glad of one thing however, Thar Lignite deposits are finally being exploited. I for one would not pass judgement on whether it is a good or bad investment unless I have seen all the facts.

Thank you, it was delightful read :) there is a number of things GOP can do as of now, Initially de-stressing the resources such as water. Karachi having water crisis can be addressed by having anicuts and barrages being built. (its feasible actually, geographically the land forms a single drainage basin). Aslo, the power sector needs reforms and private players need to be encouraged.

New Power plants for Karachi would have been a boon, Chinese manufacturers like Dong Feng, and Shanghai Electric have one the most clean power plants I have seen, and they are Cheap as anything! You only need to follow SoPs to the last line, as their machines usually have low tolerances, unlike European or Japanese/Korean ones that can run as rugged as an SUV. (Money would not have been an issue, if a sound biz plan is there)

My Idea was not to diss the project, but of as fact of habit, a simple case study of a project was coming up. Big Lignite Plants are less in the world and one marvelous one is the The Lagisza Power Plant, (you can check it out, it can burn pretty much anything!). I doubt if the Chinese companies have such tech IPRs, its is sold in India from Foster Wheeler China. My first post was on this aspect only; and then I read the subsequent and preceding posts in detail and questions on thar coal's quality and then online I found this, (probably the most credible data than media houses) : pdf.usaid.gov/pdf_docs/PNABU473.pdf

Presently Pakistan's Power sector, which you know, is stressed and it can be rescued. Albeit there have to be structural reforms, I can list quite a few. What they cannot afford is further 'risk' or giving the economics a bunk. Trust this, if the Pakistani power sector was cash rich, this project would have been a very good initiative, as it is exploring new options, uplifting the people of the location, indutrailization etc.

There is a lot of things GoP can do, but that all are subject various machinations of the world which we cannot dissect without the DPR, my comment or judgement doesn't have any effect on this project, it was/is purely academic.

Bro ... thanks for introduction...

I m also a professional but in different scientific field...

Can you please tell me have u actually seen the feasibility of this particular project? Can u please share it ?? I understand your general concerns....
But i dont think we can declare a 2 billiin USD project non viable based on data given in a news paper report....

If u are a scientist u would know what i am sayin


I am deriving from experience, and yes there is a report (2-3 actually) available online (USAID and Pakistan Government joint surveys made in 1994), I have given one link in my previous post. I am not a scientist, But a Project Engineer, and I have been in Field Work/Management/Consultancy since as long as I can remember. But given the preliminary risks involved, without mitigation, It will be a pain to build & it will be a pain to run. Comments are purely academic. My words won't stop it anyway no matter how bad an Idea it seems to me. I hope, I am wrong. Let's see.
 
Hydro and nuclear power plants take a long time to build (5+ years). On the other hand Gas/Coal plants will take much less time (1-3 years). Investment should be allocated to different sources of generating electricity. Some projects will aim to add more capacity to the grid in the short term and others will in the medium and long term.
Solar is expensive but there are ways to implement it. Don't invest in large solar parks but make it possible for the vast population to buy and install on their house roofs. Benefits of this are two fold: No new transmission lines are needed and energy is produced where it is needed. Upgrade the grid so that people can sell the electricity to the grid when they produce more than what they need to use (similar to systems in EU). This will require no battery bank but with one limitation as if the grid is down then no electricity. I am sure a hybrid system can be employed to overcome this problem. This will accelerate the adoption of solar generation with GoP only investing in upgrading the grid (which eventually they will have to).

A very sensible thing which is being practiced in UK/Europe etc. despite the fact that the average household income is of a much higher order.
Reverse metering has helped them introduce clean energy easily without massive investment in battery systems which is the highest recurring cost in a solar system and the primary reason why households are unable to afford it.

It is very sad to see our rulers asleep here despite a decade of energy crisis.
If Wapda allows for reverse metering and state regulated solar system providers are ensured, we can see something like a 100,000 - 200,000 houses/shops etc. put up solar systems within few months.
This can translate into a very meaningful offload.
 
But given the preliminary risks involved, without mitigation, It will be a pain to build & it will be a pain to run. Comments are purely academic. My words won't stop it anyway no matter how bad an Idea it seems to me. I hope, I am wrong. Let's see.


Abandoning this project would mean saying good bye to thar coal...

Its actually not the only project in thar....there is also chinese firm building a coal fired power plant (sino sindh) in block 1...at 3 billion usd cost

And a british firm working on financial closure at block 4..

This is the first i am hearing that these projects are non viable....

Thats why i am saying a more detailed study of current projects is needed ....

There are people on this forum who object on any thing related to pakistan....dont be fooled by them
 
An ill-advised project would cause more harm to the country than the perceived gain in 'pride' or 'Patriotism'. Well nations, can and should go for pride, but it should have a sustainable and inspirational outcome. Projects like the steel mills program, as you have said, hurts the pocket first, then some time later also the pride. Bad investment.

It is up to the nation to decide. Let Pakistan do what it wishes with its Thar coal.
 
Any updates on power generation using Thar coal?
 
Any updates on power generation using Thar coal?

KARACHI: Sindh Engro Coal Mining Company (SECMC)' CEO , Shamsuddin Shaikh has informed the Sindh Chief Minister, Syed Murad Ali Shah that financing for Thar coal project has been increased to $7.7 billion against the estimated $845 million.

During the meting on Friday held at CM House to review the progress of SECMC in mining operation which started in Thar Coalfields Block-II, Sheikh said that the mining operation has been started on war footings and out of 112 Bank Cubic Meters (BCM), 7 meters BCM have been removed. This shows that overall 6 percent progress has been achieved against the planned 5.3 percent progress.

He said that 31 meter mine depth has been achieved, large scale mining equipment would reach by next month and drilling of de-watering wells and other infrastructure is in progress. He added that the revised outlook $7.7 billion against the estimated $845 million.

Talking about the progress of two coal fired power plants, each one of 330 MW, Shaikh said that basic engineering has been completed, procurement activities are ahead of schedule with the placement of purchase order (PO) for boiler, Steam Turbine and Steam Turbine Auxiliaries. He added that the construction activities at the site include advanced completion of Piling at Stack Area and Turbine Main Hall while construction of the foundation of Piling of Turbine Pumps is in progress. It would cost $1.1 billion.

Syed Murad Ali Shah Friday has urged the SECMC's CEO to accommodate as much locals in jobs much local in jobs as possible at Thar coalfields. Sheikh informed to the CM that 2,028 employees were working there, of them 647 were Chinese, 997 Tharis and 384 are others. The chief minister directed him to create employment opportunities for the women.

The chief minister taking a policy decision approved to establish a school over two acre land near Thar Lodges, Islamkot so that local residents would be imparted proper education. "I am keen to see Tharis working on good positions in the companies working and to work at Thar Coal filed," he said and urged the secretary Finance to get the school started on Public Private Partnership mode.

http://dailytimes.com.pk/sindh/03-Sep-16/thar-coal-financing-surges-to-77-bn
 
KARACHI: Sindh Engro Coal Mining Company (SECMC)' CEO , Shamsuddin Shaikh has informed the Sindh Chief Minister, Syed Murad Ali Shah that financing for Thar coal project has been increased to $7.7 billion against the estimated $845 million.

During the meting on Friday held at CM House to review the progress of SECMC in mining operation which started in Thar Coalfields Block-II, Sheikh said that the mining operation has been started on war footings and out of 112 Bank Cubic Meters (BCM), 7 meters BCM have been removed. This shows that overall 6 percent progress has been achieved against the planned 5.3 percent progress.

He said that 31 meter mine depth has been achieved, large scale mining equipment would reach by next month and drilling of de-watering wells and other infrastructure is in progress. He added that the revised outlook $7.7 billion against the estimated $845 million.

Talking about the progress of two coal fired power plants, each one of 330 MW, Shaikh said that basic engineering has been completed, procurement activities are ahead of schedule with the placement of purchase order (PO) for boiler, Steam Turbine and Steam Turbine Auxiliaries. He added that the construction activities at the site include advanced completion of Piling at Stack Area and Turbine Main Hall while construction of the foundation of Piling of Turbine Pumps is in progress. It would cost $1.1 billion.

Syed Murad Ali Shah Friday has urged the SECMC's CEO to accommodate as much locals in jobs much local in jobs as possible at Thar coalfields. Sheikh informed to the CM that 2,028 employees were working there, of them 647 were Chinese, 997 Tharis and 384 are others. The chief minister directed him to create employment opportunities for the women.

The chief minister taking a policy decision approved to establish a school over two acre land near Thar Lodges, Islamkot so that local residents would be imparted proper education. "I am keen to see Tharis working on good positions in the companies working and to work at Thar Coal filed," he said and urged the secretary Finance to get the school started on Public Private Partnership mode.

http://dailytimes.com.pk/sindh/03-Sep-16/thar-coal-financing-surges-to-77-bn

Excellent progress! Are the power transmission lines to connect to the national grid part of the power plants or is that a separate entity?
 
In the mining industry the volume of waste rock above and between coal seams in an open-pit mine is commonly measured in bank cubic metres.

Removal of 7 cubic meters of rock does not appear to be much. I would say they have barely started. I am however astounded by the increase from $845-million to $7.7-billion? It is a nine fold increase! Why and how?

I am confused by this news. Neither the journalist nor the Chief Minister appear to know what they are really talking about.

Would anyone having inside connections with the SECMC please clarify a little so that idiots like me can understand what is the actual progress and why the need for nine fold increase from the original funding.
 

Pakistan Defence Latest Posts

Military Forum Latest Posts

Back
Top Bottom