thar

Google threw this story up from one of the asian papers today.

Looks like it virtually guarantees a 25% IRR if Cougar can get financial close on the Thar project by 2014. That means all stops out to progress the Thar project.




Mon, 15 Feb, 2010 | Rabi-ul-Awwal 1, 1431

Body set up for Thar coal price formula
By Muzaffar Qureshi
Sunday, 14 Feb, 2010


The committee includes Sindh Irrigation Minister Murad Ali Shah. One of the barriers the committee will face in determining tariff for coal-fired power plants to be set up at Thar is the absence of regulatory regime for Thar coal. - File photo

KARACHI: The Thar Coal and Energy Board has constituted a committee to prepare a formula for determining Thar coal price based on international best practices.

The committee consists of Murad Ali Shah, Secretary Irrigation and Power and Asad Ali Shah, a private member of the board.

Board’s secretary Aijaz Ali Khan told Dawn that while Ogra is regulatory regime for determining prices of oil and gas, there is no coal pricing agency or pricing formula in place for Thar coal.

He said that the absence of regulatory regime for Thar coal is one of the barriers in determining tariff for coal-fired power plants to be set up at Thar.

In the past a Chinese company, which had reached an advance stage of setting up a power plant at Thar, was refused a reasonable tariff by a federal agency, which compelled the company to pack off.

Meanwhile, the Thar Coal and Energy Development department is preparing detailed information guidelines, which will provide specific information on legal and regulatory framework as well as commercial benefits to the national and international investors participating in international bidding for Thar Coal Block I.

The board has decided to offer 20 per cent Internal Rate of Return (IRR) to firms which achieve financial close before Dec 31, 2015 for power plants based on Thar coal.

It will offer 25 per cent IRR to firms, which achieve financial close by 2014.

Two international and two local companies are working in various Thar blocks to set up coal-fired power plants. A UK firm Cougar Energy is exploiting Block III for underground coal gasification, which will lead to a 400mw power plant.

UK firm Oracle Gas Fields also plans to develop 1.4 billion tons coal in Block V1 integrating the mine with the construction of a mine-mouth power plant.