China to help in turning Thar coal into diesel

ISLAMABAD: China will help Pakistan turn Thar coal into diesel and to this effect, the Pakistan authorities managed to contact Chinese Shenhua Ningxia Coal Industry Group, which is known for turning coal into liquid.

The Shenhua Ningxia Coal Industry Group, a subsidiary of China’s biggest coal producer, the Shenhua Group, has already successfully installed the project to convert coal into oil in the northwestern Chinese region of Ningxia, the biggest plant of its kind in the world.

The coal-to-liquid (CTL) project, which has an annual production capacity of 4 million tons of oil, was built by the Shenhua Ningxia Coal Industry Group, a subsidiary of China’s biggest coal producer, the Shenhua Group.

“We have held preliminary meeting with the management of the said company and more talks will also be held for reaching a win-win agreement and this very important development took place when Prime Minister Imran Khan visited China on October 8 and being a member in his delegation managed to have meeting with top management of the said Chinese company Shenua-Ningxia, which has the expertise to turn coal into liquid (synthetic diesel). And if the said company comes and installs the Coal-to-Liquid (CoT) plant in Thar and starts turning the coal into diesel, it will prove not less than a game changer as there are huge coal deposits in Thar,” Adviser to Prime Minister on Petroleum Nadeem Babar who was part of entourage of Prime Minister during the recent visit of China, told The News.

It is the same Chinese Shenua Group, Mr Babar said that had earlier quit the Thar power project because the government of former prime minister Shaukat Aziz during Musharraf regime had backed out of already decided tariff rates of 5.67 cent per unit with the group and demanded a rate of 5.39 cent per unit. Shenua Group was interested in setting up two power plants of 350MW each in Thar coalfield.

“This Chinese company has developed the expertise to turn the coal into synthetic diesel and if it is happened in Pakistan, the country will have sustainable diesel supply in the country at affordable prices, which will play pivotal role in stimulating the economic activities in the country,” he said.

According to oil and gas sector sources, Pakistan’s monthly diesel requirement stands at average 600,000 tones according to which annual need stands at 7.2 million tons and the project to make Thar coal liquid (diesel) will also help reduce the import bill of diesel.

Thar coalfield in Sindh province is bestowed with 185 billion tons of lignite coal, which can fuel power generation of over 100,000 megawatts for more than two centuries. Pakistan needs to increase share of coal in country’s energy mix to at least 19 percent by 2030 and 50 percent by 2050. And if the diesel production from Thar coal has started then sky is the limit. In 1992, Geological Survey of Pakistan (GSP) discovered coal deposits worth 175-185 billion tons of lignite in Thar.

However, the total reserves of block II alone are sufficient to support 5000MW of energy for 50 years; enough to pull the country out of the energy crisis. At present, system is getting 602 MW electricity from Thar coal based power plants.