Shenhua starts construction of S. Sumatra coal, power plant projects

Chinese energy firm China Shenhua Energy Company Limited reported on Friday that construction of the coal and power integrated power project in South Sumatra has recently commenced.

The project is located in Muara Enim, which is approximately 100 kilometres from Palembang, the capital city of South Sumatra.

The project is and will be constructed and operated by PT. GH EMM INDONESIA which is held as to 70% by the Company.

The South Sumatra Project is a coal and power integrated project with a total investment of US$331 million.

The project involves the construction of an open-cut mine with an annual coal production capacity of 1.5 million tonnes and two coal-fired power generation units each with an installed capacity of 150 MW.

According to preliminary estimation, the reserve of the coal field under the project amounts to approximately 400 million tonnes (geological reserve exploration has been performed over an area of approximately 500 hectares) with a recoverable reserve of 60 million tonnes, which can satisfy coal consumption of the power plant for 30 years.

The two power generation units currently being constructed are expected to be in commercial operation by April 2011 and June 2011 respectively.

State electricity firm PLN will purchase the power output from the power plants on the basis of an annual utilization of 7,000 hours at the agreed power tariff for 30 years. The agreed power tariff will not be less than the power tariff paid by PLN for power generated by similar generation units at the same location.(alex)