LONDON, UK: Oracle Power has signed a non-binding Memorandum of Understanding (MoU) with Sui Southern Gas Company (SSGC) relating to the joint development of a synthetic natural gas (syngas) project utilising coal from Thar.
The MoU agreement sets out that the parties shall explore and carry out feasibility studies of their respective areas of expertise for the potential development, owning, operating and sale of syngas from coal available Thar and transporting the same for onward integration into SSGC’s transmission and distribution network.
Naheed Memon, CEO of Oracle, said Thar Block VI Project was an asset with immense potential value for Pakistan, particularly in the context of natural gas shortages and the intense price pressures associated with the import of LNG.
“The MoU with SSGC, the majority of which is owned by the Government of Pakistan, could be a significant turning point in the pursuit to secure long-term domestic syngas and we are delighted to working with SSGC to produce a detailed technical and financial feasibility study to advance these plans. We look forward to updating the market further with the development of these studies as we jointly look to unlock the value of this strategic resource for the benefit of all stakeholders and in accordance with national demand.”
Oracle will be responsible for carrying out a detailed technical and financial feasibility study of the syngas project and the quality and price of syngas to be delivered at the delivery point to SSGC.
SSGC will, at its cost, carry out a study to establish the feasibility of integrating syngas with its existing transmission network. Each party will support the others in providing any requested information and other details to enable the other Parties to carry out their respective feasibility studies.
The parties agree that upon successful completion of feasibility studies they intend to negotiate and enter into definitive agreements for the sale and purchase of syngas and evaluate any possibility of investment and support by SSGC in the syngas project. The MoU will remain in effect for 12 months or until the execution of definitive agreements, if before.
Parties expect that such feasibility studies will be completed by Q4 2022. The Parties may from time-to-time share and jointly discuss the findings of such feasibility studies on a confidential basis and make all reasonable efforts to determine the financial and technical feasibility of the syngas project.
It is understood and agreed that Oracle will have and continue to hold proprietary rights over any feasibility study carried out by it. Oracle has agreed to deal exclusively with SSGC but SSGC has retained the right to seek other opportunities also in relation to the supply of gas, given the demand of natural gas in Pakistan.