Banpu Power International Limited, a wholly-owned subsidiary of Banpu PLC, has signed an equity joint venture agreement to study and co-develop Shanxi Lu Guang power project, a new 1,200 megawatt coal-fired power project in the Shanxi province, China.
This is Banpu Power’s fourth such project in China. Under the agreement, Banpu Power will hold a 30% equity in the project with Shanxi Lu’an Mining Group and Gemeng International Energy Company Limited holding 35% equity, each.
Lu’an is also Banpu’s joint venture partner in Shanxi Gaohe Energy Company Limited, which owns and operates the Gaohe mine in Shanxi province (55% stake is with Lu’an and 45% stake in this project is with Banpu).
According to its statement to the Stock Exchange of Thailand, preliminary approvals for the project have been received from the Shanxi Provincial Development and Reform Commission. However, the project is still at an early stage of development and some aspects of the project may be subject to change later.
The plant will consume around 3.2 to 3.5 million tons of coal per annum.
Banpu’s chief executive Chanin Vongkusolkit earlier said that it had a plan to boost capacity at its coal-fired power plants to meet the rising demand in China.
The SET-listed company operates three coal-fired power plants in China currently – one in Luannan in Hebei province with the electricity capacity of 100 megawatts, another 48-megawatt plant in Zhengding in Heibei and the other 100-megawatt plant in Zouping in Shandong province.
According to the official website, the power major has 30 years of accumulated experience in the running of domestic and international coal and coal-related businesses (investment, exploration and development and coal production) that span six countries: Thailand, Laos, Indonesia, China, Australia, and Mongolia. The company claims expertise in open-pit and underground coal mining operations and in coal-fired power generation.
The 2014 half-year financial results for Banpu, reported a gross profit increase of 3% to $513 million, while sales revenues were down 8% to $1.549 billion from the same period, last year. The coal sales (93% of company income) amounted to $1.442 billion, while $92 million came from sales of power and steam (6% of revenue). This year, the company expects a sell 48 million tons of coal.