Lucky power plant to be the first to run on Thar coal

660MW plant at Bin Qasim will use coal to be hauled in from mine 350km away

KARACHI: Lucky Electric Power Company Limited (LEPCL), a wholly owned subsidiary of Lucky Cement Limited, is all set to install a 660-megawatt coal-power plant at Bin Qasim, Karachi, which will be the first plant to use Thar coal as fuel 350km from the mine’s mouth.

“Lucky Electric’s electricity tariff will be marginally lower compared to the mine-mouth project despite the transportation cost because of a lower rate of return, higher plant efficiency and no water cost,” said LEPCL Chief Executive Officer Intesarul Haq Haqqi while speaking to media on Tuesday.



The project would not only set a precedent for the entire power sector by using the coal produced by Sindh Engro Coal Mining Company, a hefty distance away from the plant, but it will also pave the way for export of Thar coal, as its power plant is located at Port Qasim.

If this coal could be transported to Port Qasim for producing power, it can also be exported from the same port.

“The project will cost approximately $850 million,” he said. The company is targeting to start commercial operation by December 2019.

It has already obtained all the requisite approvals including the letter of support, upfront tariff from Nepra and has leased 250 acres of land close to Port Qasim.

Haqqi revealed that the company was finalising a power purchase and implementation agreement with the government and was likely to achieve financial close by March 2017.

He said the Lucky Electric Power project was in line with the government’s policy of increasing reliance on indigenous resources for power generation. This will facilitate foreign exchange savings besides bringing the electricity cost lower, thus making it affordable for the consumers and helping make exports more competitive.

Moreover, the use of Thar lignite, away from mine-mouth, would also help in expansion of mining in Thar, which was in the interest of the country, the province and the people of Thar, he said.

He mentioned that the project was initially intended to run on imported coal. However, upon advice of the government, it was converted to local (Thar) coal in line with the national policy of reducing reliance on imported fuel.



“The Thar coal field has total lignite reserves of 175 billion tons, which can be utilised to produce 100,000 megawatts for over 200 years,” he said.

Haqqi said LEPCL had done due diligence of Thar coal and was in discussion to formalise a coal supply agreement with Sindh Engro Coal Mining Company. The coal from Thar is to be transported via roads to the plant site. “Initial feasibility has been completed with the objective of ensuring a sustainable transportation mechanism,” he said.

Published in The Express Tribune, November 16^th, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.