Ireland’s Tullow Oil has announced plans to use gas from its two recently- discovered fields in Sind province to fire a private power station in which it will take an equity stake through a newly-formed company called Liberty Power.
The gas is to come from Tullow’s Block B and Kandhkot East fields (MEED 25:11:94). The company has made two finds and says that it could produce 30 million cubic feet of gas a day from the Sara-1 well in Block B alone. Liberty says it is confident these fields contain sufficient reserves for the power station’s needs and has therefore agreed to take the gas reservoir risk.
The company has been set up to design, finance and operate a 470 MW power station which is to be built near Dharki. Liberty is made up of a consortium of developers, including Tullow Oil Pakistan Development (TPD), the wholly- owned Pakistani subsidiary of Tullow Oil. TPD has a 5 per cent founder interest in Liberty, with an option to double this at a later date. The lead developer is the Washington-based Infrastructure Capital Group (ICG) which holds a 50 per cent stake. Other firms involved are Malaysia’s Tetnaga, the US-based utilities company Entergy and Ansaldo, the Italian turbine manufacturer.
Liberty eventually hopes to raise the generator’s capacity to 470-MW on a phased basis. The first element is planned to be completed in April 1996 with the installation of a 150-MW turbine. The first expansion will bring the plant’s capacity to 225 MW on combined cycle by November 1996. The final phase will add a further 245 MW.
In a statement issued on 19 July Tullow said that this move not only represented the firm’s first venture into power generation, but should also allow TPD to become self-funding. The combination of a $10 million advance from ICG – which may be converted into 5 per cent of TPD by 30 August 1995 or into TPD shares at an agreed price prior to a possible future floatation – and sales revenue, are expected to generate a minimum of $18 million for the company.
TPD plans to use this money in the further exploration and development of its Pakistan licences. The Liberty project also sets the stage for the TPD’s eventual floatation.