SUNDAY OCTOBER 23: International Coal Conference 2011: dependence on oil to be reduced, says Prime Minister

KARACHI: Prime Minister Yousuf Raza Gilani said here on Saturday that the government would gradually reduce dependence on imported oil for power generation to save over $3 billion, and to eliminate the menace of circular debt. It would also produce cheaper power for the people and industry, cutting the cost of doing business, he added. Addressing the International Coal Conference 2011, organised by Sindh Board of Investment at a local hotel, the PM said.
"We have to create a balanced energy mix by gradually increasing coal based power generation, bringing it at par with world average of 40 percent coal-based power generation." Sindh Governor Dr Ishrat ul Ebad Khan and Chief Minister Qasim Ali Shah were also present on this occasion. The Prime Minister said that the present government has already added 3400 MW in the national power grid during last three years through various short- and medium-term measures, and many more power projects are at various stages of completion. "We have even resolved the basic problem, which held us back in utilising the vast coal reserves in Sindh for producing energy", he added.
He said that the government's prime objective is to attract local and foreign investment in mining, power generation and infrastructure development in Thar coal field. "We offer enabling environment, guaranteed rate of return, unprecedented incentives and commit robust infrastructure to investors working in this vital sector that will usher a new era of economic sustainability and development", he said.
He expressed confidence that the government of Sindh would be able to develop the Thar coal reserves in a strategic and systematic manner that would ensure the country's national energy security and long-term use of indigenous coal for electricity generation and industry use. He reassured the commitment of the government to all stakeholders in the value chain of coal mining, power generation and developers for the successful development of Thar coal projects.
Gilani said the discovery of the one of the biggest coal reserves of Thar coal during the last many decades could not be put to use mainly because the elected governments were not allowed to complete their tenure and the long term projects could not be initiated and got scrapped to erase the footprints of the predecessors in a bid either to defame the politicians.
He said the International Coal Conference 2011 is a sure step in the right direction. "The Conference today seeks to devise a strategy to utilise the indigenous Thar coal reserves to make Pakistan not only energy sufficient but also exporter of energy," he added.
He said that energy is an essential driver of the country's economy. To achieve accelerated GDP growth and reduce poverty, the economy needs reliable, uninterrupted, and affordable supply of energy. Pakistan is facing the overwhelming task of bridging its energy demand and supply gap that is likely to double in the next 15 years. Development of local energy sources, including hydel projects and the Thar coal field, remains a high priority for the present government, he added.
He said that Sindh has huge coal reserves comprising 185 billion tons, out of which 175 billion tons are at Thar. These have been certified by the world renowned companies and experts as technically feasible and viable for power generation. He reiterated that Thar coal deposit is the seventh largest coal deposit in the world, and the largest at one place having potential of power generation of 100,000 mega watt for 300 years.
He pointed out that Benazir Bhutto laid the foundation of development of Thar coalfield in 1993 but no substantial progress could be made since then due to the qualitative political instability. "We took up this project on priority basis and resolved all critical institutional and regulatory issues and asked the Sindh government to undertake the project without further delay".
Sindh Chief Minister Qaim Ali Shah highlighted the objectives of this first International Coal Conference and thanked the President and the Prime Minister for extending utmost support for early materialisation of Thar coal projects. Zubair Motiwala, Chairman of Sindh Board of Investment, briefed the forum about investment potential of Thar coal and said that many international companies from China, South Korea. Germany, Czech Republic, Australia, UK and Turkey have shown their interest in investment in coal mining and power generation in Thar coal and also in the infrastructure projects.
He said that the government of Sindh is conducting third International Competitive Bidding for blocks VIII, IX and X of Thar coal field and also blocks in Sonda and Badin for attracting international companies to develop coal mining and power generation projects in Sindh.
The province of Sindh is endowed with huge lignite (coal) resources comprising 185 billion tons, one of the largest coal deposits in the world, and has the capacity to generate 100,000 MW for 300 year. Out of this huge resource, 175 billion tons of coal are available in Thar. Earlier, Naveed Qamar, Minister for Water and Power, inaugurated the Conference. He said that the federal government would provide all support and assistance to complete Thar coal project.
Mohammad Younus Dagha, Secretary, Sindh Coal and Energy Development Department, explained that the objectives of the conference are to market Thar coal as an attractive investment option and the way to achieve energy security for Pakistan, to bring to the fore all the myths, misconceptions about Thar coal to sift facts from fiction, clarify misconceptions and answer questions, to bring clarity to all the stake holders including the government and to demonstrate the commitment of the Federal and the Provincial Governments for this important national task. He also stressed the need to create an ideal energy mix by replacing imported furnace oil to indigenous coal for power generation.
Removing the misconceptions about Thar coal, Dr Marcos Leontidis, mining expert from Greece, said that the stripping ratio in Thar is around 6.6:1, which is much better than many lignite mines in the world, including Greece. Dr Larry Thomas, coal expert from United Kingdom, said that Sulphur content in Thar is acceptable being at 0.7 percent, which is lower than found in many other lignite resources already being used in the world, and its moisture levels are same, or even less than, as found in most of the lignite mines in the world. He said the coal from Thar, although it may not be exportable to other countries, can be transported to be used in other parts of the province after drying.
Nigel Pickett, from SRK-UK, in his presentation said that 'renewable energy' cannot provide Pakistan reliable energy supplies due to its seasonal and cyclic nature. It has to be part of the energy mix to meet the peak demands and reduce fossil fuel consumption. Base load of Energy mix has to come from thermal resources, and imported fuels cannot provide energy security to the country. Volatility of oil prices in 2007 brought heavy stress on the economy and indigenous coal provides the only option to achieve energy security for the country. International and national coal sector specialists, potential investors, existing project developers, representatives of development financial institutions, diplomatic corps and other stakeholders attended the Conference.