Last checked at 24 Jan 2022 07:00
24 January 2022
Oracle Power PLC
("Oracle", the "Company")
Coal-To-Gas Development MoU Signed with Sui Southern Gas Company
Oracle Power PLC (AIM:ORCP), the international natural resources project developer, is pleased to announce that it has signed a non-binding Memorandum of Understanding ("the MoU") with Sui Southern Gas Company Limited ("SSGC"), a publicly listed company on the Pakistan Stock Exchange, which is majority-owned by the Government of Pakistan, relating to the joint development of a synthetic natural gas (syngas) project utilising coal from Thar.
Highlights
· The MoU establishes the basis for Oracle and SSGC to explore and carry out feasibility studies for the potential development, owning, operating and sale of syngas from Thar coal to SSGC.
· Syngas produced from this arrangement would be integrated into SSGC's transmission and distribution network which delivers pipeline quality indigenous natural gas and re-gasified liquified natural gas (LNG) to domestic, commercial & industrial consumers.
· SSGC is a Public Listed Large Scale Company (LSC) and is a Pakistan's leading integrated gas company - the Government of Pakistan is the company's largest shareholder.
· Pakistan is facing a severe shortage of natural gas, expected to be approximately 2,000 MMCFD in the next five years. Securing imported LNG has also become problematic given commodity and transport price inflation. Therefore the fundamentals for domestically produced syngas are very compelling.
· Feasibility studies will now be initiated with a view to entering into definitive agreements for the sale and purchase of syngas and evaluate potential for investment and support by SSGC in the project.
Naheed Memon, CEO of Oracle, commented:
"Our Thar Block VI Project is 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."
Further Information
On 21 January 2022 Oracle Power and SSGC, (together "the Parties") signed a non-binding MoU relating to the joint development of a syngas project.
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.
Oracle shall, at their cost, 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.
The 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.
*ENDS*
For further information on Oracle Power Plc, visit the Company's website http://www.oraclepower.co.uk or contact:
Oracle Power PLC
Naheed Memon - CEO +44 (0) 20 3580 4314
Strand Hanson Limited (Nominated Adviser)
Rory Murphy, James Harris, Rob Patrick +44 (0) 20 7409 3494
Shard Capital (Broker)
Damon Heath, Isabella Pierre +44 (0) 20 7186 9952
St Brides Partners Limited (Financial PR)
Susie Geliher, Catherine Leftley +44 (0) 20 7236 1177
About Oracle Power PLC:
Oracle Power PLC is an international natural resource and power project developer quoted on London's AIM market. The Company holds two highly prospective gold assets in two globally significant gold regions of Western Australia. The Northern Zone Project is located 25km east of the major gold mining centre of Kalgoorlie, the home of the 'Super Pit' mine, the second largest gold mine in Australia, and the Jundee East Gold Project is located ~9km east of Northern Star's Jundee Gold Mine, one of Australia's largest gold mines.
The Company is also active in the power industry in Pakistan and is working to establish a green hydrogen production facility in association with PowerChina. The Company's initial project is the Thar Block VI Project in south-east Pakistan where the Company is advancing plans for a combined lignite coal mine, a 1,320MW mine mouth power plant and a proposed coal gasification to urea project.
About Sui Southern Gas Company Limited:
Sui Southern Gas Company ("SSGC") is a Public Listed Large Scale Company (LSC) and is a Pakistan's leading integrated gas company. The Government of Pakistan directly and indirectly owns the majority of the shareholding of SSGC. The company is engaged in the business of transmission and distribution of natural gas besides installation of high-pressure transmission and low-pressure distribution systems.
SSGC is inter alia a duly licensed transmission and distribution company for indigenous natural gas and RLNG in the Provinces of Sindh and Baluchistan in Pakistan. It has a large integrated transmission and distribution network to transport and deliver pipeline quality indigenous natural gas/RLNG to domestic, commercial & industrial consumers.