KARACHI (November 01 2009): The Iran government has defined its priorities to the government of Pakistan for contributing its share of $330 million in the $5.513 billion aid pledged at the Friends of Democratic Pakistan Forum (FoDPF) in Tokyo moot, Iran Ambassador said here on Friday.

"The obligations are a little difficult as we are member of FoDPF, but we have given our priorities to the government of Pakistan and are waiting for their response," M Shakeri, Ambassador of Iran in Pakistan told Business Recorder at the inaugural ceremony of Pakistan and Iran Friendship Association (PIFA) held at Iran Cultural Centre on the auspicious occasion of the birthday of Hazrat Imam Ali Raza (AS) here.

He said the government of Iran is keen to assist Pakistan in two sectors including energy and transportation which need to be improved for sustainable growth of the country. Earlier, Masood Zamani, Consul-General of Iran , in Pakistan , said that the two countries have long friendly relationship because of their common religion and culture.

He said that Pakistan is facing acute electricity shortage, particularly in Karachi , which created negative impact on the economy. Therefore, Iran , which always supports Pakistan in any untoward situation, has given green signal to the Pakistan government to export some 1100mw electricity to overcome energy crisis.

He lauded the efforts of President Asif Ali Zardari, saying that Pakistan has signed the agreement of Iran-Pakistan gas pipeline project under immense pressure, and termed it as a huge achievement for both countries. He said that Iran would extend its support further to make the relationship of the two countries stronger.

Zamani dispelled the perception that Arab had spread Islam in this region, saying that it was not correct because Mohammad Bin Qasim was an Iranian, who brought Islam in this region. He termed the 'Poet of East' as the real ideologist of the present Iran , saying that Allama Iqbal had given the ideology of Iran , "which was followed by our national hero, Imam Kumaini".

Sindh Chief Minister Qaim Ali Shah said that there was a lot of pressure on Pakistan government not to sign the agreement with Iran "but we have made it to strengthen the relations". He appreciated the gesture shown by Iran government to support Pakistan in power crisis, saying that the proposal of providing 1100 mw by Iran would be tabled before the concerned authority.

He said the terrorist attacks were aimed at demoralising Pakistanis but the morale of the people was high and they were supporting military operation. He said the Sindh government has taken stern security measures to maintain law and order in the province and expressed hope that Pakistan would be safe. A large number of people belonging to various walks of life were present on the occasion.

ISLAMABAD (November 07 2009): Pakistan considers energy co-operation among Saarc countries as an important element of the socio-economic development in South Asia . Minister for Petroleum and Natural Resources, Syed Naveed Qamar said this while addressing the concluding session 8-Nation Saarc Energy Conference here on Friday.

The minister complimented the Governing Board of the Saarc Energy Centre as well as the Saarc Energy Centre for taking up many important projects. The projects were in the areas of energy trade, energy efficiency, renewable energy including bio-diesel and bio-ethanol.

Joint import of crude oil, rural electrification, gas and power interconnection grid, development of non-conventional hydrocarbons, labelling and standardisation of energy appliances were among the projects. Besides, preparation of common template for power exchanges, sharing of best practices, capacity building and technology transfer also featured in the projects.

Qamar said Pakistan had taken the initiative of hosting the Saarc Energy Centre to providing a platform for initiating, co-ordinating and facilitating regional, joint and collective activities in the energy sector of South Asia for economic growth and development of the region.

He expressed satisfaction over the full participation of all the eight Saarc Member States ( Pakistan , Afghanistan , Bangladesh , Bhutan , India , Maldives , Nepal and Sri Lanka ), in the meetings and their interaction with energy professionals of Pakistan . The minister noted with pleasure that the Saarc Energy Centre had already entered into agreement with the Asean Centre for Energy to extending co-operation beyond the Saarc and to learn from the experiences of Asean region in the field of energy co-operation.

The conference was attended by Irshad A Kaleemi Joint Secretary (Development), Ministry of Petroleum and Natural Resources, Pakistan, T.M. Herath, Additional Secretary, Ministry of Power and Energy, Sri Lanka, Nizwee Rasheed Second Secretary, High Commission of the Republic of Maldives, Sudhir Kumar, Joint Secretary, (International Co-operation), Ministry of Power, India, Ghulam Dastgir, Director, Saarc Secretariat, Kathmandu, Karma Tshering, Chief Engineer and Head, Planning and Co-ordination Division, Department of Energy, Ministry of Economic Affairs, Bhutan, Hilal A. Raza, Director, Saarc Energy Centre, Islamabad, Muhammad Jan Rostazada, Afghanistan, Engr. Anwar Hossain Khan, Director General, Hydrocarbon Unit, Energy and Mineral Resources Division, Ministry of Power Energy and Mineral Resources, Dhaka (Bangladesh), Anup Kumar Upadhyay, Joint Secretary, Ministry of Water Resources, Kathmandu, Nepal, Muhammad Hassan Wazir, Director (Saarc), Ministry of Foreign Affairs, Pakistan. The minister commended the effort of the participants.

ISLAMABAD (November 07 2009): Nepal has offered to export power through India to Pakistan to overcome the recent energy crisis in the country. The Nepalese delegation offered power export during the 8-nation South Asian Association for Regional Co-operation (Saarc) Energy conference at Islamabad , which began on November 3, 2009. The next meeting of Saarc energy conference would be held in New Delhi in December.

Sources revealed to the Business Recorder that the Nepalese delegation suggested that it could export power to Pakistan but the lines have to cross over India to reach Pakistan . The meeting noted that Nepal has huge potential to generate hydroelectricity but the country lacks expertise and investment to establish power generation plants.

The technical team from Pakistan also pointed out that India was the only country that has borders with South Asian countries, but due to political differences India was importing energy only from Bhutan . Sources said that the delegates observed that energy and economic issues should not be part of the politics in South Asia , as the region needs energy resources for economic growth and social development.

According to a press release, Petroleum Minister Naveed Qamar in his message on the occasion expressed satisfaction over the full participation of all the eight Saarc Member States, including Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, in the meetings and their interaction with energy professionals of Pakistan, courtesy of his Ministry of Petroleum and Natural Resources as well as on the performance of Saarc Energy Centre located in Hydrocarbon Development Institute of Pakistan.

Qamar in his message on the occasion said "Pakistan considers energy co-operation among Saarc countries, as an important element of the socio-economic development in South Asia," adding that Pakistan had taken the initiative of hosting the Saarc Energy Center with a view to providing a platform for initiating, co-ordinating and facilitating regional, joint and collective activities in the energy sector of South Asia for economic growth and development of the region.

The Minister complimented the Governing Board of the Saarc Energy Centre for taking up many important projects in the areas of energy trade, energy efficiency, renewable energy including bio-diesel and bio-ethanol, joint import of crude oil, rural electrification, gas and power interconnection grid, development of non-conventional hydrocarbons, labelling and standardisation of energy appliances, preparation of common template for power exchanges, sharing of best practices, capacity building and technology transfer.

The efforts of the Director of the Centre, Hilal A. Raza, and Irshad Kaleemi, the joint-secretary development of the ministry were also appreciated in the context of the performance of the Centre in the field of energy that had also been recognised internationally.

Qamar noted with pleasure that the Saarc Energy Centre had already entered into the agreement with the ASEAN Centre for Energy with a view to extending the frontiers of energy co-operation beyond the Saarc and to learn from the experiences of ASEAN in the field of energy co-operation.

The conference was attended by Irshad A Kaleemi Joint Secretary (Development), Ministry of Petroleum and Natural Resources, Pakistan, T.M. Herath, Additional Secretary, Ministry of Power and Energy, Sri Lanka, Ms Nizwee Rasheed Second Secretary, High Commission of the Republic of Maldives, Sudhir Kumar, Joint Secretary, (International Co-operation), Ministry of Power, India, Ghulam Dastgir, Director, Saarc Secretariat, Kathmandu, Karma Tshering, Chief Engineer and Head, Planning and Co-ordination Division, Department of Energy, Ministry of Economic Affairs, Bhutan, Hilal A. Raza, Director, Saarc Energy Centre, Islamabad, Mohammad Jan Rostazada, Afghanistan, Engr. Anwar Hussain Khan, Director General, Hydrocarbon Unit, Energy and Mineral Resources Division, Ministry of Power Energy and Mineral Resources, Dhaka (Bangladesh), Anup Kumar Upadhyay, Joint Secretary, Ministry of Water Resources, Kathmandu, Nepal, Muhammad Hassan Wazir, Director (Saarc), Ministry of Foreign Affairs, Pakistan.

ISLAMABAD (November 08 2009): The Planning Commission (PC) of Pakistan will support Pakistan Atomic Energy Commission (PAEC) to enhance its indigenous technical facilities for manufacturing and installation of nuclear power plants. "We will provide all what is possible to this organization which has an excellent track record of delivering whatever was assigned it to do," Chairman PC, Sardar Aseff said during his visit to Chashma Nuclear Power Plants on Saturday.

Aseff, according to PC press release, said that PAEC plans to install nuclear power plants to contribute to the pressing electricity requirements of the country were well-founded, saying that its increasing indigenous capability in this domain deserves full support.

The PC chairman said that there was huge reservoir of technical know-how available with PAEC, which could be utilized for socio-economic uplift of the country. "We need to strength this centre of excellence for prosperous Pakistan," he remarked.

He was of the view that due to global warming caused by fossil fuel based electricity plant's nuclear energy, as clean source, has staged resurgence and it is heartening to know that PAEC is poised to take a lead in nuclear generation. Speaking on the occasion, Chairman PAEC, Ansar Parvez said Pakistan's nuclear power plants were operating well adding that PAEC was moving forward to install many more nuclear power plants in the coming years.

He said that PAEC was working to enhance indigenous capability adding that technical facilities and know-how available with PAEC was at the disposal of PC and other such organizations to utilize it for the benefit of the country.

Earlier, in his presentation, DG Chashma, Safdar Habib dwelt at length on self-reliance programme of the PAEC in nuclear power generation, the press release added. He cited example of KANUPP, which he said, was being run through indigenous capabilities since 1976 when the supplier withdrew all support.

LAHORE (November 11 2009): An energy efficient compressor was launched here on Tuesday at a special ceremony attended by a large section of manufacturing industry, engineers and businessmen. The manufacturers say this high energy efficiency compressor can save energy up to 25 percent reducing overall running costs dramatically. It has potential to cut annual CO2 emissions by the same amount as taking 75 family cars off the road or planting 16,000 trees.

Made by a German firm it is marketed by Rastgar & Company. Chief Executive of the manufacturer, Colin Fountain, especially flew here to attend the launching ceremony. He said that the product is a result of hard labor of 5 years of their development team and it will fundamentally change the way an industry thinks. He claimed that the new product would open the door to the fast growing oil-free compressor. A monitoring center, supported by a network of service engineers will carry out all servicing during the ten years warranty period, he added.

Copyright Business Recorder, 2009

ISLAMABAD (November 12 2009): Pakistan is one of few countries blessed with lot of untapped coal, wind, hydro and solar energy potential and Germany is keen to help Pakistan fully exploit these resources as well as improve its water management system. This was stated by Joachim Steffens, Head of Division, International Investments and Finance, Debt Rescheduling, while exchanging views with business community at Islamabad Chamber of Commerce and Industry (ICCI) on Wednesday.

He said energy, water management, agriculture, oil and gas are the potential areas of mutual co-operation between the two countries. He said soon a delegation of German energy experts would visit Pakistan to explore prospects of energy co-operation between the two countries.

Pakistan and Germany would sign a Bilateral Investment Treaty (BIT) in December 2009 under which German Government will provide insurance guarantees to investment of its companies in Pakistan , which will cover their political and security risks and will give them more independence and sovereignty, he added. The facility is only Pakistan-specific, which shows Germany's commitment to help Pakistan by promoting bilateral trade and investment, he said.

He said BIT would be a sophisticated agreement providing the facility of international arbitration for smooth settlement of business disputes. He said it would boost the confidence of German investors in Pakistan replacing the outdated agreement signed in 1959 between the two countries. He said BIT would also improve the image of Pakistan sending a positive signal to international investors and giving them comfort to explore Pakistan for investment.

He was appreciative of the good legal framework established by the Government of Pakistan for foreign investors and termed it very encouraging. Zahid Maqbool, President ICCI hoped that BIT will provide a new stimulus enabling business activity to gather momentum between Pakistan and Germany and will further enhance bilateral co-operation in different sectors between the two countries.

Pakistan is an energy deficient country, which has emerged as a major impediment in the growth of business activities, while Germany was an energy rich country, especially in hydropower and Germany should help in tapping its vast untapped hydropower potential and other alternative energy sources to cope with energy crisis.

He said oil and gas sector of Pakistan offers tremendous investment opportunities to foreign investors but Germany has not good presence in this sector in the country. He invited German investors to invest in Pakistan and earn phenomenal returns as well as get access to Afghanistan and Central Asian States as Pakistan is a gateway to these regions.

Copyright Associated Press of Pakistan, 2009

KARACHI (November 15 2009): The Sindh government has reportedly sought release of Rs one billion funds from the Ministry of Petroleum and Natural Resources for Thar Coal Infrastructure Development, it is learnt. Sources told Business Recorder on Saturday that the Sindh government had recently forwarded a letter to the Ministry of Petroleum and Natural Resources to release Rs 1000 million so that the infrastructure facilities could be developed at Thar Coalfields.

Ministry of Petrol and Natural Resources had allocated Rs 1000 million for the new schemes under Thar Coal Infrastructure Development for the fiscal year 2009-10, they said, adding that the PDWP of Sindh government had cleared these schemes and forwarded to the federal government for approval from the CDWP/Ecnec, which was approved on October 2 and 28, 2009 respectively.

The schemes submitted by the Sindh government included study for development of additional blocks XI and XII at Thar Coalfield with an estimated cost of Rs 260 million and feasibility study for providing broad-gauge rail link for coalfields of Sindh province with a cost of Rs 21.900 million, they added.

The sources said that the Block VIII of Thar Coal would be extended into two new blocks, i.e. XI and XII, which would help attract investment in the coal reserves. These two extended blocks would be offered to the international companies for establishing power plants to overcome prevailing power crises in the country, they said.

The Sindh Coal Authority through International Competitive Bidding (ICB) would execute the work through private consulting firm after completion of codal formalities and as per guidelines of the Planning Commission, they said.

Moreover, the Ministry of Railways was asked to conduct feasibility study to set up broad-gauge railway line to link Thar Coal with the other coalfields of the province, they said and added that the Pakistan Railways Advisory and Consultancy Services Limited (Parcs) had been tasked to carry out initial working linking Thar and other coalfields with Badin-Hyderabad section.

The consultancy firm has also recommended Varvai-lslamkot-Mithi-Naukot-Mirpurkhas-Hyderabad as the best route as it connects all important locations like Islamkot, Mithi and Hyderabad.

The firm would also convert meter gauge railway track into the broad gauge from Mirpurkhas to Jamrao. A total of Rs 21.893 million would be spent for the feasibility study to provide rail-link to Thar and other coalfields of the province, the sources further said.

ISLAMABAD (November 19 2009): Alternative Energy Development Board (AEDB) on the directives of Prime Minister is to electrify 7874 remote villages in Sindh and Balochistan with 6,968 of these villages are located in Balochistan. According to P&D sources, the National Rural electrification programme is the main project being implemented by Wapda to provide electricity to the villages of all the four provinces in the country.

The Solar Energy projects are to supplement the initiatives of the Wapda and is proposed to be implemented in the areas where electricity cannot be supplied through national grid due to technical, financial and economical hindrances, the sources added.

They said that the villages selected for supply of electricity through renewable energy technologies are located beyond 20-km radius of national grid and therefore provision of electricity through renewable energy technologies is the only solution.

A programme for electrification of remote villages of Sindh and Balochistan through solar energy was prepared by Alternative Energy Development Board (AEDB) on PM's directive, they added. AEDB, they said developed four PC-1s for Rural Electrification through renewable energy in Sindh and Balochistan costing Rs 1167.73 million, which were approved by the CDWP on March 21, 2006.

Three projects envisage 100 villages each to be electrified in the remote areas of Balochistan (total 300 villages) and one in Sindh (100 Villages). The total cost of the projects is Rs 1.168 billion, they remarked. They added that one of these PC-1s was for provision of Solar Energy in 100 remote villages Northern Balochistan along with Afghan Border at an estimated cost of Rs 308.960 million.

They further said that since project of such magnitude has not been carried out in Pakistan in the past, it was decided to implement the programme in a phase wise manner. Hence adopting this strategy, 100 villages out of these 6968 villages in Northern Balochistan and along Afghanistan Border will be electrified as part of this project.

A request was submitted by AEDB to Planning Commission for allocation of funds from PSDP 2007-08 and in response It was intimated that the projects should be funded from Khushal Pakistan Programme (KPP-II) now Peoples Works Programme (PWP-II), as these fall under the purview of Village Electrification and was initiated under PM's directive. Annual Plan Co-ordination Committee (APCC) also upheld the decision of the Planning Commission and subsequently endorsed by NEC.

AEDB has informed that only an amount of Rs 100 million were released to them during financial year 2007-08 through KPP-II and subsequently no allocation has been made to them from either PSDP/PWP-II and have requested for an allocation of Rs 450 million for the Financial Year 2009-10.

In view of APCC/NEC decision, no allocation can be made to AEDB through PSDP, they added. However, they said they may pursue their case with Prime Minster's Secretariat/Ministry of Finance for allocation from PWP-II, as funds under PWP-II are managed by PM Secretariat and released by Finance Division, "The PC has no say in it", they added.

They further pointed out that AEDB's projects relating to power generation etc were financed from PSDP during Financial Year 2007-08. An allocation of Rs 29.0 million was made. Similarly another Rs 15.3 million was also earmarked during 2008-2009, during the current Financial Year ie 2009-10, Rs 100.0 million has been allocated to AEDB for their two projects other than village electrification.

WASHINGTON (November 20 2009): The United States expects to complete a review on how to spend $7.5 billion in proposed aid for Pakistan by the end of this month, with an early focus on the country's decrepit energy sector, senior US officials said on Wednesday. Chronic power shortages are a big political issue in Pakistan . They undermine growth potential, economists say, and weaken support for the fragile civilian government.

US officials involved in the review declined to say how $1.5 billion a year in new funds would be allocated but made clear that infrastructure projects, particularly electricity, was an important part of the review. "Energy will be a major focus," said one senior official. The aid has been signed into law but Congress has yet to appropriate the money. "It (energy shortages) affects people, it affects people's perception of their government and manufacturing and jobs - everything," added the official, who according to State Department rules asked not be quoted.

Last month, a US delegation travelled to Pakistan to work out priorities in resolving the energy crisis. The issue is seen as a test of Pakistan 's government, which is battling militants and helping the United States in its fight against al Qaeda and the Taliban in neighboring Afghanistan .

US Secretary of State Hillary Clinton, during a visit to Pakistan last month, announced $125 million in new aid to upgrade power stations and transmission lines, part of a broader effort to reduce power shortages. Washington hopes such support will help Pakistan 's government make tough decisions, including unpopular increases in electricity tariffs, said one official. The International Monetary Fund's quarterly report from July 31 on Pakistan 's economic performance recommended three price hikes. The first was on October 1 and according to the IMF, there is agreement for two more.

OTHER PROGRAMS Other US funds will go to improve health, education, water management and roads. US aid to Pakistan has previously been channelled mostly through US-based nongovernmental groups or contractors, but the Obama administration plans to rely more on local Pakistani organisations and the government.

"It's about how we get Pakistani ownership, leadership and sustainability," one US official said. "We want to be sure that we are hand in glove with the government in helping them to deliver services." That change has sounded alarms in Congress, which has pushed for stringent safeguards to ensure the money is not lost via corruption.

"We are taking that very seriously," said the State Department official. Pakistani auditors vetted by US inspector generals were seeking Pakistani institutions with the capacity to deliver aid and proper accounting mechanisms, said the official.

US aid groups, afraid they will lose out on the new funds, say they are concerned there will not be enough US government staff on the ground to oversee the funds. But the senior US officials said the US Agency for International Development planned to double its staff in Pakistan to more than 60 in the next two years to handle this new workload.

KARACHI (November 22 2009): The Thar Coal Energy Board (TCEB) in its 6th meeting here at Chief Minister House on Saturday recommended to the federal government to declare Thar as a Special Economic Zone (SEZ) and "strategic interest area" (SIA) to encourage foreign direct investment (FDI). Also, the Board would arrange joint consultative meetings of Nepra, investors and PPIB to work out a realistic indicative tariff for Thar coal by January 15, 2010.

This was stated by Federal Minister for Water and Power Pervez Ashraf and Sindh Chief Minster Qaim Ali Shah, chairman TCEB, during a joint press conference at Chief Minister House. "Thar to be declared as a Special Economic Zone and shall be a strategic interest area," the federal minister said.

He said that the board had agreed on giving an attractive incentive package to the investors to encourage FDI and power generation from Thar. According to him, the Board, after being updated by Dr Samar Mubarak Mand on Underground Coal Gasification (UCG) project, decided that Sindh government would notify a governing body under the chairmanship of Dr Mubarak for the execution of UCG projects. He said in a detailed presentation about the progress in Thar Block VI, Oracle Coal Fields plc of UK told the Board that the company would start mining in 2011.

Cougar Energy of UK also gave a presentation on Thar Coal Block III, based on UCG technology and according to its timeline its "pilot burn" would start in 18-month time and a 400 MW power plant would be established in next four years. The Board also reviewed the World Bank-assisted TCAP TA project and was given updates of the venture by the consultants.

Sindh Chief Minister said that after detailed discussion it was decided that the Board would arrange joint consultative meetings of Nepra, investors and PPIB to work out a realistic indicative tariff for Thar coal by January 15, 2010. "Nepra was invited to discuss indicative tariff for Thar coal," he added.

According to a statement provided to the journalists at the event the secretary works and services gave a detailed presentation on roads and informed the Board that his Department would reinforce existing roads and structure for facilitating transportation of heavy mining machinery and equipment from Karachi to Wango Mor leading to Thar coal fields. They would spend about Rs one billion, and NHA would develop the road from Wango Mor to Thar coal fields at a cost of Rs 2 billion in next two years time. The handout said that the secretary irrigation and power gave a detailed briefing for ensuring water supply at the Thar coal fields.

In this regard, a water channel from Nara Canal System, Makki Farash up to Islamkot, would be provided at a cost of about Rs 14 billion and it would be implemented in three years. The Coal and Energy Department would also explore other options of providing water on large scale basis, such as desalination plants for mining and power projects for Thar coal fields, said the statement.

KARACHI (November 22 2009): The Sindh government has appointed Faling, Pieter Adriaan (Piet) as the International Energy Advisor under World Bank's Thar Coal and Power Technical Assistance Project to promote the vast coal reserves of district Tharparkar, Business Recorder learnt on Saturday.

The consultant selection committee, Thar Coal and Power Technical Assistance Project of the World Bank, comprising Additional Chief Secretary (Development) Munawar Opel, Additional Secretary (Development), Finance Department Rafeo Shah and Deputy Secretary (Services), Services General Administration and Co-ordination Department Suhail Ahmed Qureshi, conducted interview of Pieter recently, according to official sources.

It may be mentioned here that the Sindh government and the World Bank (WB) had signed $30 million agreement for the technical assistance for the development of Thar coalfields.

Sources said that the International Energy Advisor would report to the Project Co-ordinator, Project Management Unit (PMU), and would also assist the Public Private Infrastructure Board (PPIB). He would contribute towards the development of Block-I of the Thar coalfields and work with legal advisor and other members to assess existing power sector policies relating to development of coal-fired electricity generation as well as integrated mining.

He will also propose plan in view of responsibilities for coal-related transaction, roles by provincial agencies, government and power regulator ie National Electric Power Regulatory Authority (Nepra), sources said, adding that the advisor would also summarise sector issues, legal and regulatory processes and key agencies relating to development of coal-fired power generation.

Further, on day-to-day basis, the advisor will contribute towards briefings, reports and summaries to be presented to the federal government including the PPIB and the provincial agencies with periodic updates on project design and development and other key sector issues. He will also contribute towards investor roundtables, road shows and other campaigns to promote Thar coal development, they said.

Faling, Pieter Adriaan (Piet) has vast experience and remained on important positions in different countries in the world. He worked as Executive Director of the Transmission Group and member of the Management Board of Eskom, South Africa . He also served as advisor to Kema Consulting in the United States of America about creating transmission companies.

He also served as advisor to the Chairman and held the position of Group Managing Director of the Honeywell Group, a Nigerian conglomerate with an annual turnover of $150 million, etc. He also led discussion among the Portuguese, Mozambique and South African governments and the three utilities, Electricitade De Mozambique, Hidroelectrica De Cohora Bassa and Eskom to get a 2000MW hydro electric power station in Mozambique back on line after the destructive civil war.

ISLAMABAD (November 25 2009): Pakistan has paid heavy financial and human cost in the war on terror as country's economy growth is plagued by increasing incidents of terrorism, said Chaudhry Ahmad Mukhtar, Federal Minister for Defence here on Tuesday.

"The European Union and other friendly countries should come forward to provide Pakistan market access to help it grow at a faster pace", the Minister said while talking to French Ambassador to Pakistan, Daniel Jouanneu, who called on him at the Ministry of Defence.

During the meeting two sides underlined the need for closer co-operation in the fields of trade and defence. The minister sought French assistance in overcoming the energy crisis in Pakistan , saying that the country at present is facing acute energy shortage and needed support from friends to address this problem.

Ahmad Mukhtar reiterated Pakistan 's resolve to continue fight against terrorism, saying that the fight against terrorism will go on till the menace was completely eliminated and terror network abolished. Highly professional, well trained and well-equipped Armed Forces of Pakistan have successfully defeated the terrorists in Swat-Malakand and are at present following them in Waziristan with determination, he maintained.

Speaking on the occasion, the French ambassador said that his country highly valued its ties with Pakistan and wanted to promote strategic partnership and expand bilateral co-operation with Pakistan . He said French leadership and parliament is eager to assist Pakistan in defence, trade, commerce, environment, water treatment, transportation and agriculture sectors. France had great admiration for the enormous sacrifices rendered by the Armed Forces of Pakistan in the war on terror.

LAHORE (November 25 2009): A German delegation, comprising of Kirsten Weltzien, Alexander Klass, Eduard Wegner, Tuesday called on Punjab Chief Minister, Muhammad Shahbaz Sharif and discussed matters pertaining to energy development. Secretary Irrigation was also present on the occasion. The CM Punjab, in the meeting, said that dearth of energy was severely affecting agriculture and industry in the province.

He observed that Germans were affluent in the solar technology and they could come up with a workable plan in Punjab in this regard. The delegation reciprocated that they were interested in pursuing solar energy projects in the province.

LUXEMBOURG (November 25 2009): The European Investment Bank (EIB) is providing 100 million euros to the Islamic Republic of Pakistan to part-finance investments in the renewable energy sector. The operation will be co-financed with the Asian Development Bank (ADB) under an innovative arrangement.

Carlos da Silva Costa, EIB Vice-president, Dr Syed Rizwan Ahmed, on behalf of the Government of Pakistan, and Antonio Andrea Monari, Resident Director General of the Asian Development Bank, signed the relevant documents in Luxembourg on Tuesday. The EIB Vice-President said that this operation "is definitely a timely and visible contribution to the European Union (EU) policy aimed at consolidating democracy in Pakistan and supporting social and economic development in the country.

It also constitutes the first mutual reliance arrangement between the ADB and EIB. This is indeed a trail-blazing approach and I hope it is the first of many such operations, bearing testimony to the excellent co-operation." The lending operation is structured as a framework scheme, under which the EIB will support a series of investments in the renewable energy sector in Pakistan , thereby contributing to the mitigation of climate change, one of the core objectives of the European Union's mandate for lending in Asia .

The investments will be part of the multi-year programme to develop the renewable energy sector in Pakistan set up by the country's government, for a total amount of 2.2 billion dollars. The programme has also the financial support of the ADB (US $510 million) and is backed by technical assistance from ADB, the World Bank and bilateral development agencies (USAID and Germany 's GTZ).

EIB-ADB collaboration in the project will make it possible to exploit synergies between the two financial institutions and will minimise the transaction costs to the borrower. Under the co-financing Agreement signed between the EIB and ADB, the EIB will be delegating to the ADB a series of tasks concerning loan administration and project monitoring.

This innovative approach is in line with the principles of the 2005 Paris declaration on aid effectiveness, and with the 2008 Accra Agenda for Action, which call for a reduction in the fragmentation of aid by improving the complementarily of donors' efforts and the division of labour among donors.

This is the EIB's fifth lending operation in Pakistan , where it started operations in 1993. It is also the third operation with Pakistan 's Ministry of Finance.-PR.

LAHORE (November 28 2009): Four Rental Power Plants (RPPs) with about 600 MW power generation capacity would be operational by the year-end. Director General Pakistan Electric Power Company (Pepco), Mohammad Khalid, told Busiiness Recorder here on Friday. It would be followed by addition of another 1200 MW by coming March, hence the total power generation capacity would reach 1800 MW by then, he said.

It would help bring down the demand and supply gap and the Pepco would only have to announce marginal load-shedding in the months of May and June next year, he added. Khalid said no load-shedding is being conducted anywhere in the country, both on domestic and commercial fronts, by Pepco at present. When asked about slow progress on execution of RPPs, Khalid said that the investors' are reviving their confidence gradually and this phenomenon would ultimately be overcome soon.

KARACHI (December 02 2009): The State Bank of Pakistan on Tuesday introduced financing facility for establishment of new power projects using renewable energy with capacity of up to 10 MW with the view to meeting the growing electricity demand in the country. According to a Circular (SMEFD Circular No 19) issued on Tuesday, sponsors of power projects can avail financing facility through banks/DFIs for new imported and locally manufactured plant, machinery and equipment.

Preference shall be given to projects being established in the less developed areas of the country, it said. As per eligibility criteria laid down in the Circular, financing will be available to the prospective sponsors desirous of setting up of Power Projects with a capacity of up to 10 MW, who have completed prescribed requirements of Alternative Energy Development Board (AEDB), the concerned regulatory authority and other relevant Government Department / Authority, in compliance with the prevalent Renewable Energy Policy of the Government of Pakistan.

It said the financing shall be available only for establishing new Power Plants of up to 10 MW installed capacity using alternative / renewable energy sources (wind, hydel, biogas, bio-fuels, bagasse cogeneration, solar power and geothermal as fuel). However, financing will be available for LCs established for import/purchase of new plant, machinery & equipment from December 1, 2009 to June 30, 2012 only.

Refinance may be provided up to 100 percent of financing provided by banks/DFIs to the eligible borrowers for the import/ local purchase of plant, machinery & equipment subject to adherence of other rules & regulations, the circular said. Under the Scheme, financing will be available for a maximum period of ten years including a maximum grace period of 2 years.

The grace period will be over and above the Availability Period of one year. However, maximum period of financing shall not exceed the period of ten years (including grace and availability period), from the date of first disbursement, it added. According to the Circular, the rate of service charge at which SBP will provide refinance to the Banks/DFIs shall be determined on the basis of average of weighted average yields of last two auctions of 5 and 10 years PIBs.

It said the service charges shall be announced for each fiscal year and shall remain valid for a period of one year from 1st July to 30th June.

Pakistan may award a contract to Germany-based ILF Consulting Engineers to conduct a bankable feasibility study and engineering design of Iran-Pakistan (IP) gas pipeline. ILF will work in joint venture with Pakistan engineering consultancy agency National Engineering Services Pakistan Limited (Nespak).

A pre-feasibility study has been undertaken on the IP gas pipeline project and a bankable feasibility study and Front End Engineering Design (FEED) is required to approach investors and financiers and for tendering and procurement of materials, equipment and appointment of construction contractors.

Sources told Business Recorder that a delegation of ILF consultants is in Pakistan at present to finalize the terms and conditions of the contract. Germany-based ILF consultant provides consultancy with regard to tunneling, underground construction, pipeline engineering, feasibility studies, social and environmental impact and detailed design.

Petroleum Ministry has estimated $22 million to work on Stage One (preparatory phase), which includes bankable feasibility study, social and environmental impact assessment (SEIA), supervision of detail route survey (GRS) and FEED. Sources said that bankable feasibility study would require $10 million to $12 million. The government will initially arrange around $12 million financing through National Bank of Pakistan (NBP) to conduct a bankable feasibility study of IP gas pipeline project.

Finance Ministry has assured arrangement of financing in this regard. Pakistan has already agreed to import 750 mmcfd gases and would seek additional 250 mmcfd gas from Iran on the request of Balochistan government to meet the requirement of Gwador Port. "If ECC gave the nod for additional gas import from Iran, then the size of the pipeline would be increased and Pakistan will have to take up the issue of the size with Iran", sources said.

After increasing the volume of gas import, the size of the pipeline may have to be increased to 48 inches, sources said. The cost of construction of 42-inch pipeline--from Iran to Nawabshah--was estimated at $1.2 billion. However, with increase in the size the cost would rise.

At present, 48 percent thermal power generation is based on furnace oil, out of which about 62 percent is imported. One bcfd gas will generate estimated 5,000 mw electricity that would result in massive relief in load shedding to Pakistan 's electricity consumers.

Recent studies have shown imported gas would be most economical as compared with other imported fuels. According to analysis, thermal power cost would be 3.51 cents/kwh from Iranian gas if the crude oil price stood at $40 per barrel, whereas the furnace based power generation would cost 4.24 cents/kwh, LNG 3.51 cents/kwh, coal 4.3 cents/kwh and solar 11 cents/kwh.

Managing Director of Sui Southern Gas Company (SSGC) has stressed the need of exploring new gas fields to cater the demand of the country as the production of Sui-field is abating, gradually. Umair Khan was speaking at the 2nd meeting of FPCCI standing committee on natural gas along with Abdul Sami Khan, president of CNG dealers association and Malik Khuda Bux, chairman of CNG Stations Owner Association held at Federation House here on Tuesday.

He assured the CNG dealers not to conduct gas shedding, saying that SSGC is not planning to carry out gas shedding in the southern parts of the country. He said the government is seeking to explore new gas-field to minimise the pressure of production from the Sui-field.

The concerned authority has initiated several projects including Iran-Pakistan Gas Pipeline Project in particular and others in general to overcome the gas shortage but these projects would be made operational in next three years. Therefore, the country has an ample need of exploring new gas-fields to provide uninterrupted gas supply to the industry for coming three years.

To a question, Khan said the SSGC has written a letter to the oil gas regulatory authority (Orga) to add two financial heads earnings include 17 percent GST on metering units and the profit of JJBL in its ledger and hoped that it would create healthy impact on the company's financial stature besides improving its shares value in the market.

He refused the proposal of supplying gas to the industries directly for generating electricity saying that the power consumption is increasing day by day hence the said recommendation would not play its part to overcome the power crisis. A large number of CNG dealers were present in the meeting.

Pakistan Petroleum Limited (PPL) and Walters Power International (WPI) Limited, of US, have both shown keenness to set up a power plant, and both are competing for allocation of 40 mmcfd additional gas expected from Kandhkot gas field. The decision rests with the Economic Co-ordination Committee of the Cabinet.

The PPL has approached the Private Power and Infrastructure Board (PPIB) to finalise modalities and licensing agreements if the gas is allocated as requested. The capacity envisaged is 250 mw combined cycle independent power project. PPL has also submitted a request to Petroleum Ministry for allocation of 40 mmcfd additional gas from Kandhkot gas field as its confirmation is required.

"PPIB has been actively working for the development of power projects on fast track basis and in this regard. PPL is pleased to make an offer to PPIB for setting up a 250 mw combined cycle independent power project utilising additional gas available from Kandhkot gas field", sources said quoting PPL administration's letter sent to PPIB. PPL administration has assured PPIB that it is technically and financially capable of executing the project in the shortest possible time.

Encouraged by PPIB's efforts in achieving the reduction/elimination of electricity load shedding in the country, the company wishes to play its due role in accomplishing the ultimate objective in the overall interest of the country," PPL told PPIB MD, adding: "We look forward to an earliest opportunity for discussions and finalisations of modalities and licensing agreements for the proposed installation of combined cycle independent power project at Kandhkot gas field".

Sources told Business Recorder that PPL management has written a letter to PPIB Managing Director (MD) Fayyaz Elahi urging him to finalise the modalities of the licensing agreement to set up 250 mw power plant. PPL is a petroleum exploration and production company in Pakistan and is an operator of prime gas fields like Sui, Kandhkot, Adhi and Mazarani.

PPL is currently committed to supplying 110 mmscfd raw dehydrated gas to Water and Power Development Authority (Wapda) for its Guddu thermal power station (GTPS). In addition to this, 50 mmscfd raw gas is to be supplied to SNGPL for onward supply to Wapda's GTPS. The production and recoveries from Kandhkot with a designed capacity of 210 mmscfd will increase availability by around 40 mmcfd.

Walters Power International (PWI) has also requested the government to allocate 40 mmcfd additional gas from Kandhkot gas field for setting up a 110-130 mw rental power plant. The Economic Co-ordination Committee (ECC) of the Cabinet will take the final decision with respect to gas allocation from Kandhkot gas field. However, the Petroleum Ministry has recommended that the 40 mmcfd gas from Kandhkot gas field be placed at the disposal of PPIB.

The Minister for Petroleum and Natural Resources, Naveed Qamar on Saturday informed the National Assembly that the project of setting up three oil refineries with total refining capacity of 465,000 barrels per day "are in pipeline".

These projects are as follows: Khalifa Coastal Refinery, in Hub, Balochistan, with capacity of 250,000 barrels per day; Bosicor Oil Pakistan Ltd, at Hub, Balochistan, with 115,000 barrels per day refining capacity; and Trans-Asia Refinery Ltd, at Port Qasim, Karachi, with capacity of 100,000 barrels per day.

In a written reply, he said that Pakistan's existing oil refineries have refining capacity of 248,506 barrels of oil per day. While giving the details of the capacities of the refineries, he said that Pak-Arab Refinery has capacity of 100,000 barrel per day; National Refinery 62,050 bpd; Pakistan Refinery Ltd 47,110 bpd; Attock Refinery 42,000 bpd; Bosicor Pakistan 30,000 bpd; Dhodak Refinery Ltd (OGDC) 2500 bpd; and Enar Petrotech Services Ltd has capacity of refining 2646 barrels per day.

The following incentives have been given under the current Petroleum Policy to attract local and foreign investment: no prior permission of the government is required for setting up of new refinery project. Import parity price formula linked to Singapore Mean FOB spot price for the new oil refineries, import of crude oil from any source subject to Price Economics after lifting local crude allocated if any, he added.

He said that concessionary rate of duties/taxes for the equipment not manufactured locally, refineries are free to sell their product to any marketing companies or they can set up their own marketing companies. The ECC of the Cabinet recently approved following additional incentives for all new mega projects of minimum 100,000 barrels per day production capacity to be installed along the coastal belt of Balochistan, particularly Gwadar, with 20 years income tax holiday, he added.

Naveed said that waiver of 5 percent Workers Profit Participation Fund (WPPF), subject to the condition that the entire proceeds would be exclusively spent for the benefit of the local labour and their welfare, through a board of trustees, to be specially established for this purpose and development surcharge would be waived at 0.5 percent of the value of exports under the EPZA Rules 1981. Guidelines for import of second-hand/refurbished oil refineries were approved by Government of Pakistan (ECC of the Cabinet) which are as under:

The terms and conditions contained in the Ministry of Commerce Trade Policy, 2008-09 will be applicable for import of second-hand refinery project in its letter and spirit. The sponsors shall ensure that the design of second-hand refinery should be thoroughly reviewed and verified by an independent engineering consultant having track record of design engineering and evaluation of refineries (including re-location), he said.

The sponsors shall verify/validate that all codes/standards eg American Petroleum Institute (API), American National Standards Institute (ANSI), American Society of Mechanical Engineers (ASME) which are as follows.

Sponsors shall ensure refurbishment of major equipment and controls from licensed Original Equipment Manufacturer's contractors with warranty. The refurbished equipment be subjected to extensive review to ensure that it conform to the mandatory codes for ensuring safety.

The sponsors shall comply with all applicable laws, rules and regulations including National Environmental Quality Standards (NEQS) and NOC from Environmental Protection Agency (EPA). There shall be no GOP guarantee/financial obligation and techno economics viability of the refinery whatsoever. The sponsors shall obtain license from Oil and Gas Regulatory Authority (IGRA) under Ogra Ordinance 2002. He said that Ogra shall follow/ensure above guidelines for grant of licence.

The Multan Electric Power Company (Mepco) would install its own oil reprocessing plant with a cost of more than Rs 10 million in a bid to save precious money and gain self-reliance. Work has already started on the plan after receiving of approval by the Mepco board of directors. The installation work would be completed till June 2010.

The plant would save millions of rupees monthly of Mepco, which is the largest power company among the nine power companies of PEPCO. The oil is used in transformers whereby water and carbon are mixed in it to purify and make it usable again. At current, only one plant, working under the private sector in Lahore , is catering to the needs of the power companies. Mepco having the largest transmission system, has decided to established the said oil reprocessing plant.

MOL, an oil and gas exploration company, on Wednesday announced to make central processing facility (CPF) operational in Manzalai, district Karak, NWFP, formalising natural gas supply of 250 mmcfd in the national transmission system.

MOL started selling 120 mmcfd natural gas to the Sui Northern Gas Pipeline Limited (SNGPL) from newly completed central processing facility at Manzalai Tal Block in NWFP on October 28, 2009. The full field production of 250-mmcfd gas and 4,280 barrels of crude oil per day is expected to commence by December.

Addressing a press conference, Group Chief Executive Gyorgy Mosonyi said that the company had made investment of 170 million dollars in Tal Block and committed to increase investment to 500 million dollars during the next 10 years. Gyorgy Mosonyi said that gas production from Manzalai would reach 300 mmcfd by 2013, and added that MOL was committed to extend its operations in Pakistan as it was among the top five key operational centres of MOL, the Netherlands-based Hungarian oil and gas company.

He said that Tal block was a joint venture of five oil and gas exploration companies. Petroleum concession agreement (PCA) of Tal block was signed in February as an exploration block. Prior to MOL Amoco and the OGDCL failed to make any discovery in the Tal Block and they abandoned it.

According to the PCA, MOL Pakistan became the operator of the block with 35 percent shares in Tal Block, with other joint venture partners of OGDCL with 30 percent shares, Pakistan Petroleum Limited (PPL) 30 percent and Government Holdings Private Limited (GHPL) with five percent shares.

"Our operation in Tal is one of the greatest successes of MOL in the international upstream," he said, adding that the Manzalai field had one of the largest gas reserves in northern Pakistan that is around 1.88 trillion cubic feet. MOL owns five highly complex refineries in Hungary , Slovakia , Croatia and Italy , having refinery capacity of 23.5 million tons per annum and the group operates over 1,500 filling stations in Europe and a more than 5,000-kilometre-long high pressure natural gas pipeline network in Hungary.

The group is also active in petrochemical and gas storage business in Europe . Replying to a question, the Group CEO said that they had no plans to enter the mid-stream or down stream sectors in Pakistan . "But we will continue to expand the exploration activities in the country," Mosonyi said.

MOL Managing Director in Pakistan Janos Feher, who is also the Chairman of Pakistan Exploration and Production Companies Association, expressed satisfaction over the 2009 Petroleum Policy. "The policy offers higher incentives for the oil and gas companies and more allocations would be made for the development of local area where activities are conducted," Feher said, and added: "We expect that major international exploration companies would enter Pakistani market by the mid of 2010."

However, he acknowledged that the Petroleum Policy lacked mechanism to resolve dispute between the exploration company and the Ministry of Petroleum. "Till now, the disputes between the companies and the ministry have been settled amicably and through mutual benefit," he added.

Pakistan will hopefully finalise a deal with Qatar to import Liquefied Natural Gas (LNG) by the end of 2009. Moreover, the government would enforce the gas load management programme in case of growing shortfall. Syed Naveed Qamar Minister for Petroleum and Natural Resources revealed this while responding to journalists after the conference held here on Tuesday.

Earlier, addressing the Annual Technical Conference of the Society of Petroleum Engineers and Pakistan Association of Petroleum Geoscientists, the minister said that the government is confronting multi-dimensional problems and urged the scientists to play their due role for exploring indigenous oil and gas reserves to meet the domestic requirement.

The theme of the conference was 'maximise reserves and optimise exploitation'. On the occasion the minister underlined the need for optimal and sustainable development of indigenous oil, gas and human resource. He said that though it is the responsibility of the government to tap the natural resources, it is also the duty of those who have know-how in this regard that they should share their experiences/expertise.

He urged them to come forward and together with the public sector entities, take out the country from the energy deficiency crisis and help in surplus production of energy. The minister said that the luminaries and elite from the local and foreign petroleum industry could show the way forward to minimising the widening supply-demand gap by means of short, medium and long-term measures. He added that several measures are already in place as part of the short-term strategy.

He pointed out that there is dearth of technical know how, and that there is a need to develop human resource especially in the upstream sector. Moreover, he said that if the available energy resources were utilised by means of indigenous trained, skilled manpower, along with utilisation of the necessary technologies, then there would be no reason to replenish supplies by burdensome imports.

Syed Naveed Qamar wished success to the participants of the conference sharing experiences, exchanging ideas, and learning about technological developments and also awarded shields to the deserving companies. Dr Saeed Khan Jadoon, Chairman ATC, Dr Gulfaraz Ahmed, Chairman SPE, and Wamiq Abrar Bokhari, Chiarman PAPG thanked the Minister for his participation.

A leading Australian firm SMEC International has joined hands with Clough Engineering and Integrated Solutions (CEIS) to enhance its activities in the exploration of oil and gas in Pakistan . Australian High Commission in Pakistan and CEIS hosted a reception at the embassy to celebrate the acquisition of CEIS by the SMEC International.

Minister for Petroleum and Natural Resources Syed Naveed Qamar who was the chief guest at the reception speaking on the occasion said the government has demonstrated a strong political commitment and taken a number of steps to further develop the oil and gas sector keeping with the overall vision of a liberalised economy.

He said it the decisions of the present democratic government has resulted in a number of structural changes and contributed to a competitive market and improved quality of service. The minister appreciated and lauded the efforts of Australian High Commission and Austrade for promoting business relations with Pakistan.

He also acknowledged the CEIS for its valuable contribution in the oil and gas sector and added that "it is heartening to know that SMEC International has acquired CEIS, which is already doing a great business in Pakistan . The minister hoped that this acquisition would certainly prove to be useful for both CEIS and SMEC and they would combine their strengths in order to achieve synergistic benefits. Chief Executive Officer, CEIS Pakistan Tassadaq Malik in his welcome remarks briefed them guests about Clough's contribution during past 17 years in the oil and gas market.

He said the Clough at the outset delivered multimillion dollar EPCC projects like, Dhodak LPG Extraction Plant, Uch Gas Transport Pipeline for OGDCL, Sawan Gas Field Development Project for OMV and for the last few years providing state-of-the-art engineering and design services to its clients primarily dealing in production of oil and gas.

He said during last two years, Murray and Roberts purchased the major shares of Clough and restructured area of operation and restricted Clough to focus more on internal market and pulled out from India, Pakistan, Saudi and Indonesia . He informed the gathering that CEIS has a fully functional office in Islamabad with in-house support infrastructure ensuring timely delivery of projects under the new agreement.

The CEIS has excellent IT and communication set-ups supporting integrated project management approach between Pakistan and internationally based resources, he added. Tim George, Australian High Commissioner to Pakistan speaking on the praised the services of Clough for the last 17 years in Pakistan . He said that during this time Clough delivered successfully a number of projects including some giant turnkey oil and gas projects which speaks its outstanding business potential and expertise.

He recollected the Australian Prime Minister John Howard's inauguration of Clough's permanent offices in Pakistan in 2005. CEIS as subsidiary of Clough, since then has been providing engineering services successfully to clients like British Petroleum, BHP Bhilliton, OMV, Petronas, Pakistan Petroleum, China Petroleum, Tethyon Copper Company and many other reputed companies.

He enlightened the guests by acquainting SMEC International (Snowy Mountains Engineering Corporation) which has acquired CEIS Pakistan operations, as a leading Australian engineering and development consultancy company with 40 years' of experience, nearly 4,000 staff, and offices throughout Australia and in 25 cities around the world with international reputation for excellence in engineering and design.

Earlier, Barry Norman, the Managing Director SMEC International, in his address thanked the Australian High Commissioner Tim George, Minister of Petroleum and Natural Resources Syed Naveed Qamar. He said, "Acquiring the former Clough business in Pakistan has added to SMEC's already strong presence in Pakistan and South Asia generally and is a part of the strategic growth objectives for the region."

He said SMEC has not been active in the oil and gas sector and SMEC views CEIS as the foundation on which to develop, expand and grow this market both in South Asia and to the broader SMEC footprint. The reception was also attended by Australian High Commissioner Tim Geroge, Shanaz Wazir Ali, Special Assistant to Prime Minister, local and foreign oil and gas companies' representatives, government officials and senior management of SMEC International from Australia.