Sembcorp's JV inks 20-year coal supply deal in India

It'll supply 2.1m tonnes of coal per year.

In a release, Sembcorp Industries announced that its joint venture in India, Thermal Powertech Corporation India (TPCIL), has signed an agreement with Mahanadi Coal Fields, a subsidiary of Coal India, for the supply of approximately 2.1 million tonnes per year of domestic coal over 20 years for its 1,320-megawatt power plant. 

The agreement will commence once the plant becomes operational in the second half of 2014. Sembcorp owns a 49% stake in TPCIL through its wholly-owned subsidiary, Sembcorp Utilities, while Gayatri Energy Ventures, a wholly-owned subsidiary of Gayatri Projects, owns the other 51% in TPCIL. The coal-fired power plant is Sembcorp’s first power project in India, located in Krishnapatnam in Andhra Pradesh’s SPSR Nellore District. 

In addition to this fuel supply agreement, the company has also secured a coal supply contract for one million tonnes per year of coal over 10 years with PT Bayan Resources in February 2012.

Together, both contracts will supply approximately 60% of the plant’s total coal requirement. TPCIL is currently working with the relevant authorities in India to secure another fuel supply agreement for the plant by the later part of this year.

The signing of this fuel supply agreement is a significant milestone for Sembcorp’s project, as it ensures the availability of a fixed supply of coal for 20 years, critical for the smooth operation of the plant.

This will enable the company to supply power to thousands of consumers in Andhra Pradesh and play an essential role in helping to reduce the severe shortage of power supply in Andhra Pradesh and southern India.

The plant will also apply supercritical technology which allows for enhanced efficiency, thereby reducing emissions of carbon dioxide and other pollutants by consuming less fuel per unit of electricity generated compared to conventional sub-critical coal-fired generating units.