KARACHI, May 15: The Sindh government has signed a memorandum of understanding (MoU) with a Ukraine-Canadian consortium—Cathay Oil and Gas— for extracting methane gas along with water from under the coal layers in Thar coal reserves.

“The consortium has the technology to pump out water along with methane extraction,” said minister for mines and mineral development Irfanullah Khan Marwat while talking to APP here on Monday.

He pointed out that methane was a coal-based gas which can be converted into diesel, petrol, chemicals and plastic, and jet fuel and America, Canada and Chile were already processing this gas.

According to an estimate 21 trillion cubic feet gas was available underneath the Thar coal reserves and the consortium will start its extraction when an exploration licence is issued to them.

The minister said that so far the government had allocated three blocks for coal exploration in Thar area - one block of 45 sq km to the Chinese Shinuha Group, second to American AES, which is already operating two power plants in Punjab, and the third block to Associated Group, a Pakistani, Canadian and American consortium.

This consortium has been issued LPG import licence and they have a LPG unit at Jamshoro.

Besides, Thar coal reserves, Irfanullah Marwat said an agreement had been signed for mining in Lakhra with Fateh Group which has collaboration with Ukraine.

He said the group would set up a coal washing plant for which the machinery will arrive shortly. The main boring machine had already reached the site and started functioning.

The group, he said, will indulge in mining and washing and will set up a 250 MW power plant.

The minister said that the washing plant would be the first in Pakistan as Pakistani coal is lignite in nature having high sulphur and ash contents.

Marwat said because of this reason Pakistani cement industry had to import coal to an extent of 2.5 million tons.

He said the Fateh group had been allocated an area of 8,000 acres for coal exploration, while their washing plant will have the capacity of one million tons.

To a question, the minister said that the group would first develop the mines which will take two to two and a half years after which the installation of power plant will start.

He said that CMC of China would start work on mining and power plant from September 1, for which they have been allocated an area of 10-12 thousand acres in Sondha Jherak. They also plan to setup a 200 MW power plant.

He said Dadabhoy Energy had also been allocated an area where they had started exploration work with Chinese collaboration. They would set up a 200 MW power plant here.

To a question, the mineral development minister said that the Chinese Shinuha group, which has been allocated a block in Thar area, had a tariff issue with WAPDA which had not been settled. He said that since NEPRA had changed the policy, this issue too will be resolved within the policy framework.

Shinuha has already carried out feasibility and hydrological study of mining of coal and setting up a 600 MW power plant.

He said that after the settlement of tariff issue, hopefully within two months, Shinuha will start mining.—APP