KARACHI: Karachi Electric Supply Company (KESC) signed a multi-faceted memorandum of understanding (MoU) with Engro Corporation to cooperate on projects of mutual interest, according to press statement released on Friday.
The deal will cover four key initiatives; fertiliser off-take agreement from KESC’s biogas waste-to-energy power project for generation of 22 megawatts (MW) of electricity; a 300-600MW coal project at Thar; import of liquefied natural gas (LNG) as an alternate fuel for KESC’s generation plants, and supply of up to 65MW of electricity to Engro’s Polymer and Chemicals unit at Bin Qasim.
The memorandum was signed by Tabish Gauhar, CEO of KESC, and Ali Ansari, president of Engro, to mark the cooperation between the two private sector companies on all four key initiatives.
On this occasion, Gauhar said, “This multi-dimensional MoU is strategic in nature as both the private sector companies are keen to work closely to address various issues confronting the energy sector. We are confident that together we will realise these key projects that are of significant importance for the national economy.”
Engro chief Ansari said, “This memorandum will help deploy greater synergies across the two businesses and aid the growth process by leveraging competencies of both Engro and KESC in their respective domains. Together we hope to alleviate the grave issues in the energy sector that continue to affect the performance of companies and help create stronger value propositions for the industry and the economy.”
KESC was in the process of setting up a waste-to-energy power project that will produce 22MW of electricity. The biogas power plant will also have the potential to produce 100,000 tons of organic fertiliser every year.
Under the terms of the agreement, Engro Fertilizer will explore the option of setting up an integrated fertiliser plant or entering into an off-take agreement for the organic fertiliser from the plant.
Another key initiative pursuant will be the possibility of jointly working on a 300-600MW mine-mouth coal project at Thar, which will utilise the indigenous coal to be mined by the Sindh Engro Coal Mining Company holding the mining lease rights in Block-II of Thar.
KESC will also be working with Engro Vopak Terminal on the fast track innovative LNG project aimed at using the existing infrastructure at its terminal at Port Qasim to bring in intermittent supply of regasified LNG using a trading vessel.
In addition, it plans to work with Engro’s subsidiary, Elengy Terminal Pakistan, to obtain long term terminal capacity in the 3.5 tons per annum floating LNG terminal at Khiprianwala, Port Qasim for delivery of first gas in 15 months after achieving financial close.
Engro Polymer and Chemicals will also be entering into negotiations with KESC for a supply of 65MW, using high voltage transmission line from KESC to the polymer subsidiary to fulfil its electricity requirement.
Published in The Express Tribune, October 20th, 2012.
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