Pakistan Steel Mills” (PSM) Board of Directors (BoD) has directed the management to obtain the opinion of Ukrainian contractors regarding the possibility of damage to the Coke Oven Battery (COB)-1 if it is preserved indefinitely, officials told Business Recorder.
Acting Principal Executive Officer (APEO) (BMR&E) briefed the history of COB-1 to the Board and noted that Pakistan Steel signed a contract on January 31, 2007 for reconstruction of the two existing Coke Oven Batteries with M/s Concord Industrial Project Ltd, Ukraine. After its reconstruction, COB-2 was commissioned on October 4, 2008 and has been in regular production since then.
He informed the Board that reconstruction of COB-1 was completed in November 2010 and its pre-heating started on December 1, 2010. Thereafter, due to continuing financial crises, required stock of coal could not be arranged on completion of prolonged pre-heating process of 135 days till third week of April 2011 (as per plan the pre-heating time for COB-1 is 67 days).
The commissioning 3.5 months performance acceptance test as per contractual obligations and subsequent essential non-stop operation of COB-1 was then not possible. This situation is corroborated by the fact that during the last 17 months ie mid April, 2011 till 4th week of October, 2012, only 6 ships of coal (55,000 tons each) could be managed on July 15, 2011, September 28, 2011, January 12, 2012, February 17, 2012, May 3, 2012 and May 21, 2012.
The official explained that in view of persistent shortage of coal stocks, services of main contractor M/s Concord Industrial Project Ltd, Ukraine, were perforce hired for preservation of the high-value reconstructed COB-1
According to APEO, revival plan of Pakistan Steel for achieving the target up to 80% Capacity Utilisation (CAPU) steel production necessitates the operation of both the batteries for production of required quantity of metallurgical coke, because steel production beyond 62% CAPU cannot be achieved on just one Coke Oven Battery even at full capacity production level. Consistent supply of coal is required and maintaining stable stock level is, therefore, essential for sustained operation of the two batteries. Pakistan Steel has now managed two ships of coal. Both the batteries are now essentially required to operate by ensuring consistent supply of coal.
He maintained that this would, on the one hand, relieve Pakistan Steel from the continued burden of hiring the services of main contractor at a cost of $100,000 per month and on the other hand will generate huge dividends in the form of Coke Oven Gas (COG), steam, Coal Tar, Ammonium Sulphate and enhanced power generation from thermal power plant.
He maintained that simultaneous operation of both the batteries is necessary for revival/ streamlining the production line of Pakistan Steel as per business plan. Operation of the two batteries at higher CAPU may result in surplus quantity of coke, over and above the requirement of Pakistan Steel which may range upto 30,000 tons (coke size 0-80mm) per month at maximum CAPU operation of the two batteries. The surplus quantity of good quality metallurgical coke can be sold in local or foreign market. In case such surplus coke is not marketed, it will be easily used in blast furnaces. Long time storage of metallurgical coke does not deteriorate its properties.
Proposal for consistent arrangement of required stock of coal for safe operation of COB-2 at extended coking period and for commissioning/ performance test and operation of COB-l is through commissioning and performance test of COB-1 that may tentatively start on 16 December this year with estimated coal stock of 67,000 tons. COB-2 will continue to operate at extended coking period. For continued operation of the two batteries and completion of 3.5 months performance test of COB- 1, requirement of coal has been worked out and efforts are being made to establish LCs for arrival of four coal ships, each of 55,000 tons, as follows: (i) December 25, 2012 to January 5, 2013;(ii) January 21, 2013 to January 31, 2013;(iii) February 11, 2013 to February 20, 2013; and (iv) March 5, 2013 to March 15, 2013.
CEO, PSM added in the discussion that LCs for two coal ships were opened on August 29, 2012. On November 2, 2012 after arrival of the first coal ship a review of requirement of coal for firing of coke oven battery was done. The requirement for coal was revised on monthly basis. It was worked out that before reaching 60% CAPU (February 2013), commissioning of second battery was considered inevitable otherwise PSM would be forced to buy coke from the international market.
APEO (BMR&E) briefed the Board that the Ukrainian contractor required one month”s notice for arrangement of specialists and carrying out preparatory works for commissioning of COB-1. This necessitates immediate decision for commissioning of COB-1. Considering Christmas and New Year holidays, commissioning of COB-1 can take place on January 10-15, 2013 provided the decision is taken now.
On a query by the Chairman BoD, APEO (BMR&E) explained that commissioning of COB-1 at the earliest is a technical requirement by the Ukrainian contractor, otherwise it may cause damage.