PPIB Urges SECMC to Supply Thar Coal to LEPCL


ISLAMABAD: The Private Power & Infrastructure Board (PPIB) has called on Sindh Engro Coal Mining Company (SECMC) to provide a detailed schedule for Phase 3 of the Thar coal project, including key milestones such as financial close and Commercial Operation Date (COD). Additionally, PPIB has requested the supply of local coal to Lucky Electric Power Company Ltd (LEPCL) for its 660-MW coal power project, sources informed Business Recorder.

LEPCL’s 660-MW coal power project at Port Qasim, commissioned in March 2022, currently supplies reliable electricity to the national grid. Initially designed to operate on imported coal, the project was converted to utilize local Thar coal to reduce dependence on imported fuels and alleviate the burden on the national exchequer.

Managing Director of PPIB, Shah Jahan Mirza, in a letter to SECMC’s CEO, emphasized that the conversion hinged on SECMC’s commitment to supply 3.8 MPTA of lignite coal from Phase 3 of Block-II. This supply was expected to commence by 2020. However, delays in achieving financial close for Phase 3 have forced LEPCL to continue operating on imported Indonesian coal.

The reliance on imported coal has placed LEPCL at No. 17 on the NPCC merit order list, with a Fuel Cost Component (FCC) of Rs 14.06 per kWh, compared to Thar coal projects, which rank among the top six with an FCC of approximately Rs 4.3 per kWh. Since LEPCL’s commissioning, nearly 4.7 million tons of Indonesian coal, costing around $350 million, have been imported, burdening the national exchequer.

Despite current challenges, PPIB highlighted that three committed IPPs (660-MW Engro, 330-MW Thar Energy, and 330-MW ThalNova) operating on Thar Coal Block-II are not operating at full capacity due to system constraints in power evacuation. Consequently, coal dedicated to these IPPs is underutilized.

Mirza suggested that sufficient quantities of coal from Phase 2 could be utilized for LEPCL and for testing imported coal IPPs with a 10% Thar coal blend. PPIB has requested SECMC to provide timelines for coal supply to LEPCL and the IPPs from existing Phase 2 reserves and to detail the completion schedule for Phase 3, including financial closing and COD milestones.

Story by Mushtaq Ghumman

Related posts