SSGC, Oracle Power sign deal to produce synthetic natural gas

KARACHI: The Sui Southern Gas Company (SSGC) has signed a non-binding memorandum of understanding (MoU) with Oracle Power for the joint development of a synthetic natural gas (syngas) project utilising coal from Thar.

The agreement sets out that the parties would 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 in Thar and transporting the same for onward integration into the 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 LNG import.

“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 the stakeholders and in accordance with the 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 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 the 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.

The parties expect that such feasibility studies will be completed by the fourth quarter of 2022.