khalid_mansoor sind engro coal power

8/2/2019 Khalid_mansoor Sind Engro Coal Power

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Sindh Engro Coal Mining

Company

Creating Value Through Investment

Indigenous Fuel is the Key to Energy Security of Pakistan



Pakistan’s Development Challenge

Population Below Poverty Line

(income less than USD 2 / day)

_____________________

60%

Population Growth Rate

_______________________

2%

GDP per Capita

_____________

980 USD

Source: World Bank

0.01

0.10

1.00

10.00

100.00

1,000.00

10,000.00

0.01 0.10 1.00 10.00 100.00 1,000.00 10,000.00

Energy Supplies in Million Tons of Oil Equivalent

GDP USD Billion

….and needs energy to meet this challenge



Pakistan’s Power Demand-Supply Forecast

Peak Demand

Supply

Daimer – Basha Dam

(4500 MW)

Only plants that have achieved or are likely to achieve financial close included in the supply forecast

Average 2% Growth

rate assumed

Thar Coal (1200 MW)

Average 3% Growth rate

based on GDP & Population

Growth



Impact of Energy Crisis

Source: State of the Economy – Emerging from Crisis 2008, Beacon House National University publication, Pakistan Economic Survey 2009

• Electricity shortage of more than 4500 MW and frequent power cuts

translate to:

4

Impact/Year

Total cost of load shedding to the economy USD 2.5 billion

Cost as percentage of GDP 2 % decrease

Loss of employment in the economy 400,000 jobs

Loss of exports USD 1 Billion

0

4

8

12

16

Current Future (2020)

$ billion Energy Import Bill for Power Generation

Increasing dependence onexpensive imported energyputs a severe constraint on

ability to pay Import bill expected to

increase to above USD 8 billionby 2020



Wrong Fuel Choice

Source: 1) State of Industries Report 2010, NEPRA 2) Integrated Energy Plan

Gas

42%

RFO25%HSD1%

Coal

0%

Hydel

30%

Nuclear

2%

2008-09

Gas

29%

RFO37%

HSD1%

Coal

0%

Hydel

30%

Nuclear

3% 2009-10

• Due to lack of indigenous natural gas shortages, reliance on expensive imported RFO has increased

and exacerbated Circular Debt problem

• If Coal had been used instead of RFO to make up for indigenous natural gas shortage, it would

have reduced energy import bill by USD 600 M and direct saving of USD 280 M to electricity

consumers

• 50% reduction in use of RFO for power generation would reduce Pakistan’s energy import bill

by USD 900 M and benefit electricity consumers by USD 400 M

CountryPower Generated from

Coal (%)

Australia 80

China 78

India 53

USA 50

Germany 47

UK 30

World Average 42

Pakistan 0.1



Thar Coal Potential

Thar

PAKISTAN

Thar Desert contains the world’s 7th largest coal reserves:

Location of Thar Coal Field

1% = 25%Thar Coal Reserve

175 Billion Ton = 50 Billion TOE = 2000 TCFTotal Thar Coal Reserve More than Saudi Arabia 68 times higher than

& Iranian Oil Reserves Pakistan’s total gas reserves

Source:: GSP data/report – Energy equivalent is based on Shenhua report/RWE

Pakistan’s Power

Generation Capacity in

2010

Development of Block II alone would

bring in investment of USD 12 Billion

Entire Thar Coal Reserves can be used to

generate 100,000 MW of electricity for

over 200 years

http://www.heritage.com.pk/wp-content/uploads/2010/01/thar-1.jpg


http://slidepdf.com/reader/full/khalidmansoor-sind-engro-coal-power 7/18Thar Dream Promises Better Life Tomorrow for all Pakistanis!

http://www.heritage.com.pk/wp-content/uploads/2010/01/thar-1.jpg



Public Private Partnership – Alignment of Incentives

Sindh Engro Coal Mining Company

Sindh Engro Coal Mining Company’s Vision :

To develop and execute technically and commercially viable Coal Mining Project in TharBlock II to generate electric power and bring energy security to Pakistan based on

indigenous resource

• Joint Venture (JV) Company Structure :

• 40% Shares owned by the Government of Sindh (GoS)

• 60% Shares owned by Engro PowerGen Limited (EPL)

• Core expertise and responsibilities of each JV Partner include :

• GoS would assist in timely availability of all relevant data (previous and currently ongoing

studies), requisite approvals from Federal and Provincial Governments and timely delivery of

infrastructure requirement for the Project including roads and transmission line

• Engro PowerGen will lead development, financing, management and execution of the Project in

a professional and fast track manner

This Public Private Partnership reflects new strategic focus of Government & Engro to develop Thar

Coal reserves, raising the bar on how mega project investment is planned, prioritized, financed

and delivered



Bankable Feasibility Study Consultants

SECMC

RWE-Germany

* Environment and Social Impact Assessment

SGS Pakistan

Sampling/CoalAnalysis Contractor

SRK-UK /Hagler Bailly Pakistan

ESIA* Consultants

North East Coal Bureau(NECB) China

Hydrological Field WorkContractor

SINOCOAL Intl.China

Bankable FeasibilityStudy Consultant

Hydrological Model& GW Abstraction

Consultant

DRD-Pakistan

Drilling Work

Sub-contractor

RWE-Germany

Owner‘s Consultant



Key Highlights – Thar Coal Mining Feasibility Study

• Bankable Feasibility Study (BFS) for Thar Block II Coal Mining Project has been completed by

internationally renowned Consultants within budget on August 31, 2010 as per target date

• Technical, environmental and social viability of the Project has been confirmed meeting all international

lender’s standards (IFC/World Bank, ADB etc.)

Salient features of the study for 6.5 Mt/a Mine are as follows :

• Total Lignite reserve in Block II - 2 Billion tons ; Exploitable Reserve - 1.57 Billion tons which can

support 5,000 MW for 50 years; average striping ratio is 6.2:1

• Required Overburden removal ; 140 Mm3 for initial 4 years ; 1277 Mm3 over 30 years

• Total mine depth is 195 m (640 ft) ; cumulative lignite seam thickness is 32 m

• Average lignite quality calculated from 1618 samples is ( Heating Value 11.6 MJ/kg (~ 5000 Btu/lb) , Ash

7.3 %, Moisture 47.48 %, Sulphur 1.1 % ) better than lignite being used in Greece & Germany for powergeneration

• To keep the mine dry for operations, ~ 37 Mm3/a (~ 41 cusecs) of GW1 will have to be pumped out in

the initial years, which will reduce to ~ 25 Mm3/a ( ~ 28 cusecs) in later years

• Shovel & Truck (S/T) has been selected for Lignite Mining due to its flexibility to achieve mine scalability

to 13 Mt/a & 22.8 Mt/a in a cost effective manner. Bucket Wheel Excavator (BWE) & Spreader system

will be utilized for mine expansion to 13 Mt/a & 22.8Mt/a



Key Highlights – Thar Coal Mining Feasibility Study

Environment & Social Viability Assessment :

•No significant or unmanageable environmental threats and social implications indicated

• GW impact assessment and mitigation measures finalized ; drawdown in 1st aquifer will be monitored, re-

infiltration may be done after 20 years if required

• Only 2 villages will need to be relocated ; 1 st in 2025 and 2nd in 2035

Mine & power plant to be developed in parallel :

• Phase 1 of the project will be development of a 6.5 million tons/annum coal mine in parallel with

development of 1200 MW Coal fired Power Plant. Total Mining and Power Generation Projects Cost is

estimated to be 3 – 4 Billion USD

• Subsequently, the coal mine will be scaled up to 22.5 Mt/a capacity and power plant capacity will be

increased to 4000 MW expeditiously. This will require investment of over USD 12 Billion

• 1st Phase of Coal Mine & Power Plant construction is targeted to start in 2012 and both Coal Mine & Power

Plant will start operations by 2016

• GoS & GoP to ensure timely provision of infrastructure requirements including roads network and

transmission line



Project Financing from Chinese Financial Institutions

• Subsequent to Chinese Prime Minister’s visit to Pakistan in Dec, 2010, a “Joint Energy Working Group”

(JEWG) between Government of Pakistan (GoP) & Govt. of China has been formed to shortlist theenergy projects for technical and financial assistance from Govt. of China

• SECMC team presented details of Thar Block II Coal Mining, Power Plant & Infrasturucture Projects to

Sub-Energy Working Group (SEWG) comprising Joint Secretary MoPNR1, Secretary C&EDD and DG

Mines on 7-8 Jan, 2011. SEWG unanimously agreed to forward the comprehensive proposal for the

Projects with their recommendations to Energy Working Group (EWG) of GoP

• EWG has included these Projects in the list of energy projects to be presented in JEWG meeting

scheduled to be held in March, 2011 in Beijing to seek Govt. of China support for financing

• SECMC has communicated to GoS / GoP financing requirement and proposed structure for discussion

and approval at JEWG meeting

• GoS to pursue EWG to ensure JEWG recommends to Govt. of China to instruct Chinese Financial

Institutions for financing of Thar Projects as per structure proposed by SECMC



Benefits of Thar Coal Development

• To overcome the current energy crisis, Pakistan has no other alternative except development of

indigenous energy resources• Thar investment will provide the following benefits :

o Strategic energy resource that will guarantee energy security to Pakistan in the decades to

come

o Import substitution of expensive RFO or Natural Gas – Due to import substitution benefits,

Thar mining will act as a direct “foreign exchange earning sector“ and help lower the adverse

impact of imported fuel on Pakistan’s Trade Balance

o Lower power tariff for Coal fired Power Plants as compared to RFO based power tariff

o Socio-Economic Development of Thar region

Presently Thar District ranks lowest on all socio-economic development indicators in

Sindh

o Development of indigenous coal mining industry will lead to skilled job creation andtransfer of technology

o Potential for future downstream industries in Petro-chemical and Fertilizer products

Thar Coal is a fortune turning opportunity for Pakistan



Dump TruckShovel

Mine Equipment – Shovel & Truck



Bucket Wheel Excavator & Spreader


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Mine & Power Plant Layout

Layout - 6.5 Mt/a Mine with Expansion to 22.8 Mt/a Mine

Township

MSF

PowerPlant

StockYard



Dune Sand Aquifer

Coal Seam Roof Aquifer

Coal Seam Floor Aquifer

50m

120 m

180m

Location of Aquifers in Block II

khalid_mansoor sind engro coal power

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