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Sat 29 Dec 2012 09:42 AM

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UAE's TAQA said to eye Turkish coal field deal

Energy company set to sign coal field, power plant development agreement next month

UAE's TAQA said to eye Turkish coal field deal
(Photo for illustrative purposes only)

Turkey is set to sign a major coal field and power plant development agreement with Abu Dhabi Energy Company, also known as TAQA, it has been reported.

A spokesman for TAQA told Platts that the Afsin-Elbistan field deal is likely to be agreed on January 3.

Platts reported that the agreement will cover the renovation of an existing 1,400MW power plant as well as the construction of up to 7GW of new generating plant.

TAQA's spokesman was quoted as saying the construction of the new capacity is expected to take over a decade to complete.

He added that TAQA hopes to establish a joint venture with Turkey's state power generating company EUAS in order to finalise details of the scope of the development and the structure of the project.

Reports in the Turkish media quoted energy minister Taner Yildiz as stating that the deal will be worth around $12bn.

The Afsin Elbistan field has long been targeted for further development with Turkish energy minister Taner Yildiz announcing three months ago that Turkey is targeting developing a total of 17GW of new power plant using local lignite and hard coal.

In October TAQA said it had completed a feasibility study and prepared an investment model for a major power project in southern Turkey in co-operation with Electricity Generation Co Inc.

Turkish and Abu Dhabi government officials signed a "joint declaration" in which they expressed their strong support for the project in the Elbistan region which will see the development of mines and new power plants.

Last month, state-owned TAQA swung to a third-quarter loss hurt by increased costs and lower natural gas prices, which offset a rise in revenue.

TAQA, which is 75 percent owned by the Abu Dhabi government, reported a third-quarter net loss of AED288m ($78.4m), compared with a profit of AED537m a year ago.

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