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THAR COAL

THE GATEWAY TO ENERGY
SECURITY OF PAKISTAN
Mr. Ajaz Ali Khan
Secretary to Govt. of Sindh
Coal & Energy Development Department
Managing Director, Thar Coal & Energy Board
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Pakistan Energy Scenario
Pakistan energy requirements potentially huge:

Sixth largest country in the world, with its growing
population to exceed 190m by 2015.

Rising population, incomes, per capita energy use, and
industrialization translate to high energy demand growth
(total primary energy supply expected to triple or
quadruple by 2025).

Serious economic and development implications, as
energy deficit Pakistan faces increasing energy import
cost, with few medium term solutions to supply shortfalls
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Alarm Bell
Current
Installed (MW)
Projected Demand
Gap (MW)
(MW) Year
17897
2010
24,474 6,577
2015
36,217 18,320
2020
54,359 36,462
2025
80,566 62,669
2030
1,13,695 95,798
The gravity of situation can only be understood by comparing the projected
demand figures with the total current firm supply figures of our country
Source: PEPCO
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Pakistan Current Power Generation Mix
Electricity Generation 2007-08
Total 95,860 GWh
Hydel
29.96%
Nuclear & Imported
3.41%
Gas
34.37%
Coal
0.10%
Oil
32.16%
Source: Pakistan Energy Outlook 2007 2008 to 2021 2022 Petroleum Institute of Pakistan
Usage of Coal
is negligible
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National Costs of Load Shedding
Cost to the Industrial Sector Rs 157 billion

Cost to the other sectors of industrial
loss of Value Added Rs 53 billion

Total cost of industrial load shedding
to the economy Rs 219 billion

Cost as percentage of GDP 2 %

Loss of employment in the economy 400,000

Loss of exports Rs 75 billion
(equivalent to US $ 1 billion)
Source: IPP estimates listed in Beacon House National University publication: State of the
Economy Emerging from Crisis 2008
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ECONOMIC IMPACT DUE TO ENERGY DEFICIT
For firms with self generation
Additional cost of Power self Generation Rs 32 billion
Value Added Loss Rs 42 billion
Total Cost Rs 74 billion

For firms without self generation
Additional cost of Power self Generation Rs 6 billion
Value Added Loss Rs 77 billion
Total Cost Rs 83 billion
Overall Cost to the Industrial Sector Rs 157 billion
Cost as % of Industrial value added 9%
Percentage loss of Production 7%
Loss of industrial Employment 300,000 workers


Source: IPP estimates listed in Beacon House National University publication: State of the Economy Emerging from Crisis 2008
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Options
Continue Importing Furnace Oil leading to increasing import bill.

Improve and identify Alternate/Renewable Energy

Develop Hydel Projects

Minimize T&D Losses and take efficiency improvement
measures.

Exploit indigenous resources, such as Thar Coal which has a
generation potential of 100,000 MW consuming 536 million
tonnes/year (Enough resources for more than three centuries).
Total reserve is equivalent to 50 billion tone of oil (more than Iran and Saudi
Arabia combined oil reserves) or over 2000 TCF of Gas (42 times greater than
total gas reserves discovered in Pakistan so far)
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Pakistans Coal Reserves
Sindh
185,457 million tonnes

Punjab
235 million tonnes

Balochistan
217 million tonnes

NWFP
90 million tonnes

Azad Kashmir
9 million tonnes



Thar
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Neyvelli lignite 7:1
Heating value = 5200 Btu/lb
Total generation = 2,740 MW
Lignite 6:1
Heating Value: 6200 ~ 11,000 Btu/lb
Total generation = 0 MW
COMPARISON OF STRIPPING RATIO, HEATING VALUE &
GENERATION OF LIGNITE IN OTHER COUNTRIES
India
Rhineland lignite 4.9:1 (m3:t)
Heating value = 4,514 to 11054 Btu / lb
Total generation = 10,289 MW
Germany
Hungary lignite 9:1 (m3:t)
Heating value = 3,035 Btu / lb
Total generation = 1,852 MW
Hungary
THAR COAL
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Comparison Of Coal Quality
Thar Block VI
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CREDIBILITY OF RESERVES
Studies Conducted By:

USGS
John T. Boyd
RWE
Shenhua
GSP
SCA

All studies confirm presence of huge coal reserves

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CHEMICAL ANALYSIS
Bloc
ks
Weighted Average chemical Analyses of Thar Coal
As Received Values (%) Heating Values (Btu/lb)
Moisture Ash
Vol.
Matter
Fixed
Carbon
Sulphur As Rcvd Dry
I 43.13 6.53 30.11 20.11 0.92 6,398 10,461
II 48.89 5.21 26.55 19.37 1.05 5,780 11,353
III 45.41 6.14 28.51 19.56 1.12 5,875 10,880
III-B 47.72 9.30 25.49 16.79 1.15 4,808 -
IV 43.24 6.56 29.04 21.13 1.20 5,971 10,723
V 36.82 8.92 38.24 28.22 1.20 4,748
VI 38.32 7.62 36.22 30.13 1.52 10,514
VII 48.27 8.03 25.30 19.56 1.16 5,441 -
VIII 49.57 7.78 24.32 18.10 1.44 5,302 -
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UNDERGROUND WATER RESOURCES
Three water aquifers at an average depth of 50m, 120m and more
than 200 meters:

First aquifer above the coal zone

Second aquifer within the coal zone at 120 meters depth:
Varying thickness upto 68.74 meters

Third aquifer below the coal zone at 200 meters depth:
Varying thickness upto 47 meters
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Why Thar Coal?
Current dependable power supply hovers
around 14000 MW in summer whereas it drops
down in winter.
On the other hand power demand in year 2030
would reach more than 100,000 MW

In view of the power generation and energy
demand, Thars rich coal reserves not only
promise energy independence for Pakistan but
also offer lots of opportunities for prospective
investors

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Annual Savings in Foreign Exchange from Thar Block II
Cumulative savings of over USD 87 Billion from Block II alone
due to PKR devaluation and oil price increase. (fuel
replacement savings)













4000 MW
600 MW
NPV of USD 31 billion Discounted @ US CPI 3%
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Benefit to Economy Reduction in Power Generation Cost
Net Present Value of Savings is Rs. 3.2 Trillion from Block II alone
Year 2016 2025 2035 2045 2055 2065 2071
Price of Oil (USD/bbl) * 81 95 115 138 165 198 221
Differential B/w RFO &
Coal Tariff (Usc/kWh)
4 5 7 8 13 14 15
Cumulative Savings (Rs B) 14 1,026 4,055 10,403 23,341 49,732 77,372
Source: CERA (Cambridge Energy Research Associates) for oil prices ;
RFO and Coal Prices calculated from crude oil prices through historical regression analysis
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KEY REQUIREMENTS FOR DEVELOPMENT OF
THAR COAL
To make available robust infrastructure.

Developing the coal sector policy and regulatory framework.

Setting up operational environmental and social
management framework for coal to power sector

Updating/developing key technical, financial, market and
local impact analysis and other information relevant to the
investor

Preparation of Policy documents for conducting ICB for Thar
blocks.

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Challenges for all Blocks
Challenges
Infrastructure must be completed
Water supply Short Term
Roads Short Term
Railways Mid term
Transmission lines Mid term

Power line for waste mining and pumping
required

Human Resource development

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THANK YOU