Oracle Power PLC (AIM:ORCP) said it has signed an agreement with an integrated gas company majority-owned by the Pakistan government to explore the joint development of a synthetic natural gas (syngas) project utilising coal from Thar.
The AIM-listed company and Sui Southern Gas Company (SSGC), which is also publicly listed in Pakistan, have agreed to explore and carry out feasibility studies for the potential "development, owning, operating and sale" of syngas from the Thar coal project.
Syngas produced from this arrangement would potentially 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.
With Pakistan facing a shortage of natural gas and importing LNG facing commodity and transport price inflation, Oracle said the fundamentals for domestically produced syngas are therefore "very compelling".
Oracle chief executive Naheed Memon said: "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 memorandum of understanding signed with SSGC, "could be a significant turning point in the pursuit to secure long-term domestic syngas", he said.
"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."