Star Power

AG’s Star Power Generation Limited is developing a 133.5-megawatt gas-fired power plant in Daharki, Sindh.

Acquired from the United Arab Emirates’ Al Ghurair Group, the combined-cycle project will have a net output, at mean site conditions, of 124.5 megawatts. Since issuance of initial permissions in 2004, Star Power has achieved the following milestones:

  • Power Generation License No. IGSPL/02/2005 issued, June 2005.
  • Agreement signed with the Private Power and Infrastructure Board, September 2007.
  • Gas Supply Agreement signed with Mari Gas Company Limited, October 2007.
  • Power Purchase Agreement signed with the National Transmission and Dispatch Company Limited, March 2008.
  • Tariff approved by the National Electric Power Regulatory Authority, July 2008.

Being set up under Pakistan’s 2002 independent power production policy, Star Power’s 25-year agreements with PPIB, Mari Gas, and NTDC mitigate its entrepreneurial risks.

The performance of the power purchaser, NTDC, is guaranteed by the Pakistani government, which has also assumed risk of gas reservoir failure. In accordance with the 2002 policy, the cost of debt is a pass-through item providing a hedge against any cost overruns due to interest rate or foreign exchange fluctuations. Power will be provided through a 56-kilometer 132-kilovolt transmission line to NTDC on a take-or-pay basis. The Power Purchase Agreement also seeks to protect Star Power against political changes or any amendments in law.

Mari Gas, one of the country’s largest exploration and production companies, will provide 44mmscfd of low BTU natural gas, 12 months per year for 25 years, to the project on a take-or-pay basis. Fuel will be supplied through a 16-kilometer pipeline from the Mari Deep gas field to Star Power’s 72-acre site. Mari Deep has estimated gas reserves of 0.587 trillion cubic feet.

NEPRA has approved a levelized tariff of U.S. 8.83¢ per kilowatt-hour over 25 years. The tariff allows Wholesale Price Index pegging on all local costs, rupee-dollar indexation, as well as U.S. Consumer Price Index linkage for all foreign costs.

The U.S. government has allocated carbon credits to the project.

Hagler Bailly Pakistan prepared the Initial Environmental Examination report for the project as mandated by national regulatory requirements. The project will comply with Pakistan’s National Environmental Quality Standards, requirements of the Pakistan Environmental Protection Agency, and the environmental guidelines developed by the World Bank in the Pollution Prevention and Abatement Handbook for emissions from power plants.