President Asif Ali Zardari, has taken notice of the financial constraints of the country’s only “Underground Coal Gasification” (UCG) project at Thar which is feared to collapse if the required fund is not released by the government. Dr Samar Mubarakmand, the project’s head, had recently claimed that the country would be losing the entire work of the project made during last one year if the needed fund was not released by both federal and Sindh government. The president has directed the ministry of finance and other concerned authorities to hold a meeting to discuss the issue, sources at UCG project said.
Soon after the expected meeting in Islamabad, they claimed, the financial issues of the important project, which has successfully started producing gas by ignition of coal 600 feet below ground in December 2011 would be resolved through releasing Rs5 billion for purchase of machinery and other required things. Through the UCG of Thar Coal the generation of 100 MW of electricity was expected by the end of 2013 at a total cost Rs9.9 billion. Earlier, to complete power generation phase of the project, Dr Samar had requested Prime Minister Yousuf Raza Gilani to arrange immediate funding of Rs2.4 billion this year and the remaining 7.8 billion during the next financial year so that the country can benefit from the generation of 100 MW of electricity before the end of 2013.
However, at least Rs200 million out of the approved fund for the project was also yet to be released by provincial government. Earlier two scheduled meetings to be held in Islamabad to discuss the funding issue of the project was postponed for unknown reasons. The previously postponed meeting was to be held on January 16, among the ministries of petroleum, finance and other concerned authorizes to discuss and approve the financial requirements of the UCG programmeme at Thar, Sindh.
After over a month of the successful test burn of Thar Coal through the UCG programme Secretary Coal and Energy Sindh and Secretary Finance are also scheduled to visit the site of the project at Tharparkar on Wednesday to test the produced gas, they said. The pilot project, according to sources, has started facing the financial issue since the oil importers’ lobby started lobbying against the project raising various questions about the gasification programme in media. The powerful lobby, they said, was allegedly behind the move of creating financial problems to the project which has proved a landmark achievement of the country’s scientist through an ingenious design.
“When a very important breakthrough has occurred in Thar and coal gas is being produced there are people who keep misleading the public by saying that gasification can only be possible once the coal has been brought on the surface after mining,” they added. In reply to a query, the sources claimed that the project was definitely commercially feasible. Through the project at Block-5 of Thar Coal, at least 10,000 megawatts of electricity was estimated to be produced generated besides producing 2000 barrel of diesel per day.
To a question, they said that the production of gas through the UCG programme was going on in Uzbekistan, South Africa and some other parts of the country. However, the work on the same kind of project was halted in Australia due to the strong lobby of Methane. The country, can also obtain Carbon Credit as there would be no coal on surface through the UCG besides making no noise at the side. The only Block-5 (64 Sqkm) of Thar allocated for the gasification project could meet the energy demands of the country for over 30 years as it has the reserves of 1.4 billion tonnes. The pilot project, initially aimed to generate gas for producing 100 megawatts, was now also being planned to be extended from the approved 18 to 84 gasifiers. Dr Samar led team has also approached the government for arrangement of $1.2 billion fund for the 84 gasifiers aimed to meet expected demand of 2200MM cft by 2015.
Financial constraints of Thar project in President’s notice
