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News Headlines for the month of
JULY 2015

Transmission infrastructure: KE enters into $400 million agreement

K-Electric (KE) has entered into an agreement with Siemens and Shanghai Ltd of China for a $400 million investment plan for KE''s transmission network. According to a notice released by Karachi Stock Exchange (KSE), "K-Electric has signed contracts (project cost $400 million) with internationally reputed firms Seimens (Germany and Pakistan) and Shanghai Ltd of China for execution of major transmission package of the company aimed at enhancement of KE''s transmission system capacity and improve reliability and stability of transmission infrastructure." Meanwhile, a spokesman for KE when contacted said that this agreement/investment would further stabilise KE''s network, reduce fault ratio as rectification time. Under this agreement he said K-Electric would increase the number of its grids in different areas of Karachi. New 132 KV and 220 KV transmission lines would also be added to the power utility''s network. KE would get guidance from Seimens Germany and Shanghai Ltd as these companies would help KE of new installations and planning. "This is part of KE''s plans to further invest $2 billion into its network after initial investment of $1.2 billion," he said, adding that KE''s transmission capacity would enhance by around 30 percent. He also claimed that KE has kept 60 percent part of the city exempted and this would help utility in reducing its Transmission and Distribution (T&D) losses further, which the company under the new management has already brought down by more than 12 percent in the last five odd years. He said that the inauguration of the projected will be held in August.

Copyright Business Recorder, 2015

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RLNG-fired power project: Ministry asked to explore

Finance Minister Senator Ishaq Dar has directed the water and power ministry to explore the possibility of foreign funding for evacuation of power from 1,200MW RLNG-fired project to be set up in Balloki (Kasur) from Asian Development Bank (ADB) and IBRD through Economic Affairs Division (EAD), official sources told Business Recorder. Dar gave the orders at a recent meeting of Executive Committee of National Economic Council (ECNEC). The main objective of the projects is evacuation of 1200MW of power from the proposed RLNG-based combined cycle power plant at Balloki in district Kasur to upcountry load centres by construction of a 500 KV transmission line (40 km) from the proposed power plant to Lahore south grid station. The scope of work includes: (i) 500 KV double circuit transmission line from proposed RLNG-based combined cycle power plant to Lahore south grid station (40 km) and; (ii) addition of MVA 500/200 KV transformer to 500 KV Lahore south grid station. The Planning, Development and reforms Division said that the project was recommended by the Central Development Working Party (CDWP) in its meeting held on April 28, 2015 for approval of ECNEC at a total cost of Rs 3.434 billion including Foreign Exchange Component (FEC) of Rs 2.030.480 billion subject to the condition that capital expenditure would start after approval by the competent forum and commencement of construction work of the 1200MW RLNG-fired combined cycle power plant at Balloki and requested ECNEC to approve the project as recommended by the CDWP. Chairman ECNEC asked about confirmation of availability of the FEC. The ministry of water and power said that the FEC would be arranged through International Financial Institutions (IFIs). Chairman ECNEC said that the confirmation of the credit line for project was essential as it would not be advisable to arrange exchange through local resources/State Bank. He advised that possibility of the IBRD financing should be explored. He indicated that Asian Development Bank (ADB) financing was also available and directed the ministry of water and power to co-ordinate with Economic Affairs Division (EAD) towards exploring the possibility of a credit line for the project. According to the ministry of water and power, financing of project has been firmed up. However, NTDC will be responsible for financing arrangements. The project''s transportation cost is compatible with other similar projects. The sources said that capacity of power generation is increasing day by day. To cope with this growth and demand, an additional capacity would be required annually. As a result of this, enhancement in transmission and transformation capacity of NTDC system is required. After a detailed discussion on "evacuation of power from 1,200 MW RLNG-fired combined cycle power plant at Balloki" the project was approved at a total cost of Rs 3.434 billion, including an FEC Rs 2.030.48 billion, subject to the condition that the capital expenditure would start after approval by the competent forum and commencement of construction work of the 1200 MW RLNG-based combined cycle power plant at Balloki. Other major on-going and potential projects in the sector are as follows: (i) power system transmission enhancement program (ii) Muzaffargarh-Gatti 500 KV transmission lines (iii) 500 KV transmission system for dispersal of power from Thar coal project (iv) 220 KV T/L from Chashma to Ludhewala for interconnection of Chashnupp-II (v) evacuation of power from wind power plants at Jhimpir and Gharo wind clusters (vi) extension augmentation of 500/220 Kv Rewat substation.

Copyright Business Recorder, 2015

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'11,200 megawatts power to be added to system by December 2017'

The government will ensure to add 11,200MW electricity in the system by December 2017 through completion of China-Pak Economic Corridor (CPEC) energy projects and others, Federal Minister for Planning, Development & Reforms Ahsan Iqbal stated on Thursday. He was presiding over the meeting of Prime Minister's Delivery Unit at Planning Commission of Pakistan. The meeting reviewed the progress of various energy projects, which are presently under construction. The meeting was briefed about construction of Port Qasim Coal Plant, Sahiwal Power Plant, Thar Powr Plant and Hubco Power Plant. The meeting decided to strengthen the monitoring mechanism for the timely completion of power plants in the light of directives of the PM. It also decided to convene national conference on energy next week by inviting the stakeholders and experts of this sector. Ahsan Iqbal said efforts were underway to ensure timely completion of those projects.-PR

Copyright Business Recorder, 2015

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Reon Energy advocates use of solar power

Reon Energy Ltd Chief Executive Imran-ur-Rehman has said that solar power is the best solution for producing cheap electricity in the country. He said this while speaking to a group of selected journalists on the topic 'solar energy opportunities in Pakistan' at a hotel, here on Tuesday. Rehman said that at present the cost of electricity production and storage stood at an average 15 and 22 cents respectively however the use of solar energy would reduce the cost significantly. "There is an upfront cost of the system, however, the cost will later reduce to extremely low level once the debts are paid off by the system owners. Besides, the recurring maintenance or cleaning cost is very little," he added. He said that there was an ample room in the national grid to adjust electricity produced by solar power plants and setting up of such plants for domestic and agriculture purposes would be highly beneficial for the country. Rehman said that in the regime of duty free import of equipment for renewable energy, the government had not implemented 30 percent subsidy it had announced for farmers to enhance agriculture produce. He said the installation of solar-run tube wells would positively impact the agriculture produce by 25 to 30 percent. He refuted the impression that solar-run plants could not be a sole source of energy. Citing the example of Germany, he said that the country's energy was driven solely by solar-powered system. He said that energy crisis had affected the entire world and in such a situation, solar power was safe, economical and reliable alternative to conventional means of electricity. Rehman said that Reon Energy Solutions aimed to give its customers an energy abundant future by utilising the potential of the environment in a safe and sustainable manner. He said that Reon had completed a host of successful projects countrywide with its renewable energy solutions, making a difference in numerous business fields such as telecom, health, education, agriculture and industry.

Copyright Business Recorder, 2015

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Sahiwal Coal Power project reviewed: Shahbaz speaks to Chinese company president through video conferencing

Punjab Chief Minister Shahbaz Sharif held a video conference on Tuesday from Lahore with the President of Chinese Company Hauneng Shandong, Wang Wen Zong in Beijing, to review Sahiwal Coal Power project. Matters regarding Sahiwal Coal Power project were discussed in detail. Punjab government and Chinese company agreed to take joint measures for the speedy implementation of the project. A video of construction activities on the site of the project were also shown in the video conference. Talking to Wang Wen Zong, President of Chinese Company Hauneng Shandong, Shahbaz said that the project of two coal power plants of 660MW each in Sahiwal is a splendid example of Pak-China friendship and the project will further strengthen economic relations between the two countries. He said that Sahiwal Coal Power project is of national importance and work is being carried out expeditiously on this 1320MW power project. He said that no effort will be spared for the completion of this project within stipulated period. He said that Punjab government and Chinese company will complete the project till 2017 with collective efforts. The CM said that this project will start providing electricity in 2017. He said that the concerned federal and provincial institutions will extend all-out co-operation to the Chinese company with regard to early completion of the project. He said that all possible measures are being taken for ensuring the supply of coal to the site of the plant from Karachi Port. He said that maximum facilities have been provided to the engineers and the staff of Chinese company working on the project. He said that super critical power plants are being set up in Sahiwal which are environment-friendly. The CM said that every moment is precious with regard to this project and there is no room for delay and he is personally monitoring the progress on the project. The CM expressed satisfaction over the pace of the project so far and said that Punjab government is thankful to Hauneng Shandong and Ryui Group for their invaluable co-operation. The CM also thanked the president of Chinese company for timely issuing orders for the purchase of generators, turbines and boilers. Wang Wen Zong thanked CM Shahbaz Sharif for taking personal interest in the speedy disposal of the matters regarding the project and said that Shahbaz Sharif is extending extraordinary co-operation which is commendable. He said that this project will start power production in 2017. Vice President of Hauneng Shandong, Zhang Hong Yu and other senior officers also attended the video conference from Beijing. Additional Chief Secretary Energy, Chairman Punjab Power Development Company, Secretary Energy, senior officers of Railways and NTDC as well as head of Chinese team working on Sahiwal Coal Power project Song Taiji and other members attended the meeting. Commissioner Sahiwal, RPO, DCO and DPO Sahiwal participated in the video conference from the Commissioner Sahiwal's office.

Copyright Business Recorder, 2015

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Iran vows cooperation in energy sector

Iran would help Pakistan in developing energy and infrastructure sectors, said member Iranian Foreign Policy, Muhammad Hassan Asafari on Monday while talking to Chairperson Senate Standing Committee on Foreign Affairs Senator, Nuzhat Sadiq. A delegation led by Muhammad Hassan Asafari discussed matters of mutual interest. Iranian Ambassador to Pakistan, Alireza Haghghan, advisor to the member Foreign Policy, Abbas Malki and additional secretary Senate, Dr Pervaiz Abbas were present in the meeting. Senator Nuzhat Sadiq said that the relationship between the two countries went back to almost decades when Iran recognised Pakistan and was further strengthened when Pakistan recognised Iranian revolution. Pakistan and Iran enjoyed same religion and similar cultural values which increased the inclination both peoples had towards each other said a press release. Chairperson Foreign Affairs Committee said the Prime Minister's visit to Iran and Iranian Foreign Minister's visit to Pakistan had knit the relationship even further and more such visits were needed for our bilateral relations. Muhammad Hassan Asafari felicitated Senator Nuzhat on her election as Chairperson of this important committee and said that the government parliament and people of Pakistan attached special importance and significance to its relations with Pakistan. He said that Iran had the readiness to expand ties with Pakistan in all spheres and no foreign hindrance would cause any difficulty in the gas pipeline project. The delegation extended an invitation to the chairperson to visit the Islamic Republic of Iran. Senator Nuzhat Sadiq accepted the invitation and said that more parliamentary exchanges would further build up the relationship between the two countries.

Copyright Associated Press of Pakistan, 2015

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Germany, UN keen to help Pakistan address challenge of climate change

Germany and the United Nations have expressed their willingness to help Pakistan address the challenge of climate change. Talking to Radio Pakistan, German Ambassador Dr Cyrill Nunn and Director UN Information Centre in Pakistan Vittorio Camarota said Pakistan is one of victim of the climate change. The German Ambassador said Pakistan can mitigate the problem by focusing on renewable sources of energy. He said German companies are already collaborating with Pakistan in solar power generation. Dr Cyrill Nunn said Pakistan can learn a lot from German experience in the field as Germany plans to have 40 percent of its total energy consumption from renewable sources in 10 years as against 25 percent at the moment. The Director of the UN Information Centre said the United Nations is actively collaborating with Pakistan in overcoming the impact of the climate change. He said like a number of cities of the world, which are planning to convert themselves fully to renewable energy, Pakistan too should follow the suit. Advisor COMSATS Climate Research and Development Centre Shahid Kamal also said they are planning to establish a School for Climate Sciences in Pakistan with the collaboration of Germany.

Copyright Associated Press of Pakistan, 2015

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150 megawatts solar power plants: Pakistan, Norway companies sign MoU

Prime Minister Muhammad Nawaz Sharif and Norway''s Prime Minister Erna Solberg witnessed signing ceremony of a MoU between Scatec Solar of Norway and Nizam Energy of Pakistan to jointly develop and Build-Own-and-Operate solar power plants in Pakistan, here this afternoon. The construction of three solar power plants generating a total of 150 MW of electricity is expected to start in the first quarter of 2016. Located in Sindh province, the photovoltaic plants involve an initial investment of nearly US $300 million. The projects would be completed in about a year''s time. An additional 150 MW is planned to be developed in the second stage, bringing the total investment to nearly US $600 million. Advisor to PM, Sartaj Aziz; MoS for Education, Baligh ur Rahman; Special Assistant to PM, Tariq Fatemi were also present on the occasion.

Copyright News Network International, 2015

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PEDO prepares plan to develop hydel potential of 3911MW

Pakhtunkhwa Energy Development Organization (PEDO) has prepared a plan to develop Hydel potential of 3911 MW in the province consisting of 29 projects out of which five projects with the total capacity of 362 MW are located in District Dir. This was stated during presentation by CEO PEDO Akbar Ayub Khan at the eve of Ground breaking ceremony of Koto HPP in District Lower Dir. Koto Hydel project with the capacity of 40.8 MW is located on Panjkora River near Timergera in District lower Dir. It is one of the vital project for which ground breaking was done by Chief Minister KP Pervez Khattak along with chairman PTI Imran Khan. The projects will be constructed with provincial own resources in public sector and its electricity can also be used to develop industries in the province. This Project will be completed with the total cost of 14.7 billion rupees within 48 months. EPC contract of the project has been awarded to Chinese company after competitive bidding. Work on Two more projects ie 12 MW Karora Distt Shangla and 10 MW Jabori Distt Mansehra has also been awarded and their ground breaking is expected soon. Other four projects in Distt Dir including 150 MW Sharmai HPP is intended to be developed through private sector. In addition as special initiative of the present government 44 mini micro projects are also under implementation in Dir region. These projects will be for off grid communities to provide cheap electricity to poor people. The project will be completed within one year. Provincial government is trying to help the federal government in reducing the load shedding by developing its Hydel projects however federal government is not paying its due share of net Hydel profit to KPK which is badly needed to beef up the Hydel Development Fund. PESCO / NTDC is also not cooperating in providing Transmission Line/ Inter-connection facility to the national grid due to which there may be generation loss.

Copyright Business Recorder, 2015

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Power generation sector: 213 projects worth Rs 220 billion

State Bank of Pakistan (SBP) has revealed that out of the 394 infrastructure projects financed by the banks & DFIs, some 213 project amounting Rs 220 billion were undertaken in power generation sector by the end of Mar 2015. According to SBP Quarterly Infrastructure Finance Review for Jan-March 2015, Infrastructure Project Finance (IPF) portfolio of banks & DFIs has witnessed growth for fifth consecutive quarter since December 2013 and power generation, Road, Bridge; Flyover (RBF) sectors noticed a growth in outstanding portfolio. At the end of Mar 2015, cumulatively some Rs 367 billion were disbursed by the banks and DFIs to all infrastructure sectors, of which 60 percent (some Rs 220 billion) were disbursed in power generation sector followed by telecom sector with 17 percent share. Out of the 394 infrastructure projects financed by the banks and DFIs, 213 were undertaken in power generation sector, 48 in telecom, 11 in power transmission, 19 in petroleum, 21 in Oil and gas and 44 in RB&F sector, it added. According to SBP, quarterly disbursements to infrastructure projects have seen an encouraging increase in the recent quarters. It could partly be due to the continuous decline in SBP's discount rate as well as due to the improving economic conditions, as international credit rating agencies have upgraded Pakistan's rating. Quarter on Quarter (QoQ) basis, during the Jan-March quarter, banks and DFIs disbursed an amount of Rs 19.2 billion on account of infrastructure financing and most of financing was provided to power generation sector. During the quarter under review, out of total disbursement, banks and DFIs provided some 74 percent or Rs 14.2 billion to power generation sector. The total amount sanctioned by the banks & DFIs for infrastructure projects increased from Rs 591 billion in December 2014 to Rs 605 billion in March 2015, recording a growth of 2.3 percent compared to the previous quarter. Out of the total amount sanctioned during the quarter, share of power generation sector stands at 60 percent or Rs 363 billion, telecom's share was at 18 percent (Rs 109 billion) followed RB&F with 7 percent (Rs 42.35 billion), petroleum sector with 6 percent (Rs 36.3 billion) and Oil & gas sector with 4.5 percent or Rs 27.22 billion. During the period Jul-Mar of FY15, disbursements to infrastructure projects increased by a massive 162 percent compared to similar period during FY14. Data received from banks shows that banks & DFIs disbursed more than Rs 62 billion during 9M of FY15 to various infrastructure sectors, SBP said. During the quarter Jan-March 2015, an increase in overall outstanding amount was largely due to the power generation, LPG and Road Bridge & Flyover sectors, where combined outstanding amount grew by more than Rs 18 billion in the quarter under review. Whereas, a decline in outstanding amount was seen in telecom, power transmission, petroleum and oil & gas sectors. According to SBP infrastructure plays a pivotal role in the development of a country and quality infrastructure improves investment climate, enhances export competitiveness, creates employment, improves living conditions of public and leads to a higher tax revenue for the government. As the public sector has limited resources to fill the huge infrastructure gap in the country, opportunities for private sector investment are vast. "Infrastructure sector requires large upfront capital investment for benefits that spread over longer time. Unlike public sector, which takes into consideration the social benefits from new infrastructure projects; private sector's involvement looks at it from a commercial perspective. Therefore, appropriate incentives are required to lure private sector investment in infrastructure sectors", SBP said. In Pakistan, Banks and Development Finance Institutions (DFIs) have provided major part of the credit for financing infrastructure projects in the private sector, it added. According to SBP, Quarterly Infrastructure Finance Review is prepared based on quarterly data received from banks and DFIs. It includes infrastructure projects financed by banks & DFIs, as defined in the IPF guidelines.

Copyright Business Recorder, 2015

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Prime Minister for completing Quaid Solar Power Project by April 2016

Prime Minister Nawaz Sharif has directed the authorities that Quaid-e-Azam Solar Power Project (QASPP) should be completed by April 2016, to enable the country to meet energy shortage at the earliest. PM Nawaz Sharif expressed views while chairing a meeting held here on Saturday to review progress of the 900MW solar power generation project, which is prioritized under China Pakistan Economic Corridor (CPEC). Representatives of Zonergy, the Chinese company working on QASPP, MD NTDC and officials from Punjab government participated in the meeting. The Prime Minister was briefed that 50MW of the project would be completed by August 14, while a total of 300MW will be operationalised by December 31. Zonergy had earlier committed to complete the project by September 2016 but now, under the directions of the Prime Minister, its representative assured that it would be completed by the first week of April 2016. Chief Minister Punjab Shahbaz Sharif was also present at the meeting.

Copyright Independent News Pakistan, 2015

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NTDC enhances transmission capacity: Abid

The National Transmission and Despatch Company (NTDC) has enhanced its transmission capacity by 6,120 minimum vectoring altitude at a cost of Rs 29,045 million by completing its projects during 2013-15. Minister of State for Water and Power Abid Sher Ali, who made the announcement in a press conference held at the Water and Power Development Authority''s House on Saturday, said: "The capacity to transmit and despatch power on the NTDC system has increased to 273,00 minimum vectoring altitude now from 21,180 minimum vectoring altitude in 2013-14." The company is the only transmission and a despatch company to help all power generation plants, load centres and power distribution companies. It is also connected with the K-Electric to export power from the centre to Karachi. The minister also said the company had completed one 500kv and nine 220kv grid stations besides 13 500kv and 36 grid stations of 220kv. "The total length of 500kv and 220kv transmission lines is 5,072 kilometres and 9631 kilometres, respectively," he added. The grid stations are included the 500kv grid station Dera Ghazi Khan, 220kv grid station Khuzdar, 220kv grid station GIS Bandala, 220kv grid station Okara, 220kv grid station Toba Tek Singh, 220kv grid station Kassowal, 220kv temporary grid station Ghazi Road Lahore, 220kv grid station Rohri and AIS220kv grid station Loralai. He said the completion of transmission lines would also be helpful in despatch of 21,000 megawatts of electricity on the system by 2017 and that the transmission was quite dilapidated when the Pakistan Muslim League-Nawaz took over two years ago. "The capacity to hold a huge generation on the transmission line was a challenge. Therefore, we decided to invest on it for smooth transmission of electricity ahead," he added. About the privatisation of power distribution companies, he said the Privatisation Commission was working on it and he had no details about it. When pointed out that the textile industry was critic of his ministry for burdening the industry by Rs 4 per unit, he said the tariff was determined by the National Electric Power Regulatory Authority and everyone was provided with equal chance to agitate its viewpoint before this authority.

Copyright Business Recorder, 2015

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KP government sets target of producing 4000 megawatts hydel power

Reiterating the PTI-led provincial government resolve for achieving self-sufficiency in electricity production and overcoming the prevailing power crisis in Khyber Pakhtunkhwa, Chief Minister Pervez Khattak revealed that the provincial government has fixed a target of 4000 Megawatt hydro power production in the province by exploiting the rich water resources of Northern Khyber Pakhtunkhwa. He urged the federal government to support Khyber Pakhtunkhwa government for generating cheap electricity from hydel resources of the province instead of using oil and coal for this purpose which costs much heavier then natural water inputs, he added. He said that unprecedented corrupt practices involved in the power generation through IPPs may be undermined if the federal government opts for producing electricity by exploiting the rich hydel resources of the province. He, however, regretted that the federal government was paying no heed to Khyber Pakhtunkhwa Government's hue and cry in this connection. Speaking at ground breaking ceremony of 40.8 MW Koto Hydro power project near Timergara, district Lower Dir on Saturday, Pervez Khattak told that KP government would complete 356 micro hydro power projects of 35 MW electricity generation within one year in northern areas of Khyber Pakhtunkhwa. He said that the electricity to be generated through these projects would be made available for the local communities on much cheaper price. The Chairman Pakistan Tehreek e Insaf, Imran Khan, Khyber Pakhtunkhwa Finance Minister, Muzzaffar Said, and Education and Power Minister, Muhammad Atif also addressed the ceremony. Koto Hydropower project will be completed in four years at a cost of Rs 14.76 billion and all financial resources for the project would be provided by the provincial government. On completion the project will generate annual revenue of 1.97 billion rupees. Chief Minister Pervez Khattak said that Khyber Pakhtunkhwa government was seriously considering the power generation projects from its own resources under the power emergency action plan as it was fully convinced that overcoming the power outages was impossible without producing more electricity on priority basis. He said that people of the country were unable to afford heavy priced electricity and that's why was following the strategy of producing cheap electricity by exploiting the available water resources. Explaining difference between the present PTI and previous governments, Chief Minister said that the present PTI government was striving for changing the system for ensuring provision of rights and justice to the poor and common people of the province adding that any corrupt system cannot provide self-respect of the poor and down trodden people. He said that the powers at every level were being devolved at the lower level and the government's services institutions like health, education and industries were being made autonomous to enable them to solve their problems by themselves.

Copyright Business Recorder, 2015

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Pipeline prospects brightened by nuclear deal: Khaqan

Islamabad is hopeful of reviving a stalled gas pipeline project connecting Iran to energy-starved Pakistan, a minister told AFP Wednesday following the signing of a historic nuclear deal between Tehran and world powers. Launched in 2010, the project envisages the creation of an 1,800 kilometre (1,100 mile) pipeline from Iran to Pakistan, which has for years been blighted by an energy crisis that has stunted its economic growth. Iran completed its part of the project in 2013, but Pakistan put construction on hold citing US and European sanctions on Tehran linked to its nuclear programme. The International Atomic Energy Agency is set to verify Iran has implemented its commitments in December, paving the way for sanctions to be lifted from the start of next year. "A lot of issues that have built up over the years will be resolved, especially the Iran-Pakistan pipeline, where we have a contractual obligation to buy the gas and they have the obligation to deliver the gas but that has been hit by the sanctions," Shahid Khaqan Abbasi, Minister of Petroleum and Natural Resources, told AFP. "Now hopefully, as the sanctions are removed, it will facilitate us in addressing our energy needs and also meet the contractual obligation," he added. Pakistan''s key ally China is currently financing the construction of a gas pipeline from the southern town of Nawabshah to the deepwater port of Gwadar, not far from Iran. Once that is built, Pakistan will "only have to build another 80 kilometres" of pipeline to link up to Iran, and could eventually extend the project as far as its northern border with China, said Abbasi.

Copyright Agence France-Presse, 2015

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Gas pipeline: Russia's Rostec may sign document by month-end

Russia's Rostec state corporation says it expects to sign a document for the construction of a gas pipeline in Pakistan by the end of July. "Yes, we are preparing a document to be signed, according to preliminary estimates, in late July," a Rostec spokesman told a Russian news agency. Earlier in the day, Pakistani Prime Minister Nawaz Sharif met with Russia's President Vladimir Putin on the sidelines of the Shanghai Co-operation Organisation (SCO), a Eurasian security bloc that is about to accept Pakistan as its full member. Sharif said Islamabad had filled in all paperwork on the pipeline construction and expected Russia to ink the deal shortly. Last December, Rostec announced that its subsidiary, RT Global Resources, was going to construct oil and liquefied natural gas pipelines and terminals in Pakistan. It estimated the total cost of the project package at $3 billion.

Copyright Independent News Pakistan, 2015

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Gas processing plants: BoI invites Chinese firm to invest

The Board of Investment (BoI) invited on Thursday China Petroleum Company (CPE) to participate in the bidding process to establish gas processing plants in South Punjab and Hyderabad where 700MQF gas will be provided by the government of Pakistan per day. Chi Shangdaong, Chairman, CPE with his six-member delegation visited BoI and met with Chairman Dr Miftah Ismail, Dr Raania Ahsan, Acting Secretary and Executive Director General, BoI Saleem Ahmed Ranjah were also present. The Chairman BoI informed the Chinese that Pakistan was committed to provide an investment-friendly regime to investors by offering lucrative fiscal incentives and conducive business environment. The Chairman BoI briefed the delegation regarding the available investment opportunities in oil and gas and power sector of Pakistan. The CPE is an international engineering company focusing on surface facilities of petroleum upstream industry, headquartered in Beijing with eight branches and subsidiaries in China, as well as 12 main overseas branches and subsidiaries. Chi Shangdaong thanked the BoI for co-operation and providing an opportunity to discuss the available investment opportunities in petroleum sector in Pakistan. Chi Shangdaong gave a detailed presentation on the capacity and working experience of the company and briefed that their company was the biggest petroleum engineering company of China. He informed that China Petroleum was already working in Pakistan and their two projects were almost functional and looking forward for further investment in Pakistan. CPE has completed over 25,000 projects in China and abroad, and the overseas projects are distributed in countries of Middle East, Central Asia, North Africa, America, Australia, Europe etc. He further briefed that China and Pakistan have entered into a comprehensive multi-fold plan of economic development project between the two nations. The China-Pakistan Economic Corridor is a $46 billion gift from the Chinese nation to Pakistan. High-level infrastructure development will link Kashgar in Western China to Pakistani centres of Lahore, Islamabad, Karachi and ultimately the Gwadar Port. The Chinese Economic Corridor will link Western China to Middle East and Africa through a 3,000km long motorway and has immense economic potential in services especially transportation, energy and industrial development. Dr Miftah Ismail, Chairman, BoI assured them full co-operation and appreciated their interest in further investment in Pakistan. He further said that BoI was mandated for promotion and facilitating to foreign investors and assured the China Petroleum to nominate a focal person from BoI to co-ordinate with their company and materialised their proposed projects in Pakistan.

Copyright Associated Press of Pakistan, 2015

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RLNG-fired power project: Ministry asked to explore possibility of foreign funding

Finance Minister Senator Ishaq Dar has directed the water and power ministry to explore the possibility of foreign funding for evacuation of power from 1,200MW RLNG-fired project to be set up in Balloki (Kasur) from Asian Development Bank (ADB) and IBRD through Economic Affairs Division (EAD), official sources told Business Recorder. Dar gave the orders at a recent meeting of Executive Committee of National Economic Council (ECNEC). The main objective of the projects is evacuation of 1200MW of power from the proposed RLNG-based combined cycle power plant at Balloki in district Kasur to upcountry load centres by construction of a 500 KV transmission line (40 km) from the proposed power plant to Lahore south grid station. The scope of work includes: (i) 500 KV double circuit transmission line from proposed RLNG-based combined cycle power plant to Lahore south grid station (40 km) and; (ii) addition of MVA 500/200 KV transformer to 500 KV Lahore south grid station. The Planning, Development and reforms Division said that the project was recommended by the Central Development Working Party (CDWP) in its meeting held on April 28, 2015 for approval of ECNEC at a total cost of Rs 3.434 billion including Foreign Exchange Component (FEC) of Rs 2.030.480 billion subject to the condition that capital expenditure would start after approval by the competent forum and commencement of construction work of the 1200MW RLNG-fired combined cycle power plant at Balloki and requested ECNEC to approve the project as recommended by the CDWP. Chairman ECNEC asked about confirmation of availability of the FEC. The ministry of water and power said that the FEC would be arranged through International Financial Institutions (IFIs). Chairman ECNEC said that the confirmation of the credit line for project was essential as it would not be advisable to arrange exchange through local resources/State Bank. He advised that possibility of the IBRD financing should be explored. He indicated that Asian Development Bank (ADB) financing was also available and directed the ministry of water and power to co-ordinate with Economic Affairs Division (EAD) towards exploring the possibility of a credit line for the project. According to the ministry of water and power, financing of project has been firmed up. However, NTDC will be responsible for financing arrangements. The project''s transportation cost is compatible with other similar projects. The sources said that capacity of power generation is increasing day by day. To cope with this growth and demand, an additional capacity would be required annually. As a result of this, enhancement in transmission and transformation capacity of NTDC system is required. After a detailed discussion on "evacuation of power from 1,200 MW RLNG-fired combined cycle power plant at Balloki" the project was approved at a total cost of Rs 3.434 billion, including an FEC Rs 2.030.48 billion, subject to the condition that the capital expenditure would start after approval by the competent forum and commencement of construction work of the 1200 MW RLNG-based combined cycle power plant at Balloki. Other major on-going and potential projects in the sector are as follows: (i) power system transmission enhancement program (ii) Muzaffargarh-Gatti 500 KV transmission lines (iii) 500 KV transmission system for dispersal of power from Thar coal project (iv) 220 KV T/L from Chashma to Ludhewala for interconnection of Chashnupp-II (v) evacuation of power from wind power plants at Jhimpir and Gharo wind clusters (vi) extension augmentation of 500/220 Kv Rewat substation.

Copyright Business Recorder, 2015

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LNG import from China: Construction work begins on 700-km pipeline: Khaqan

Minister for Petroleum and Natural Resources, Shahid Khaqan Abbasi on Sunday said Pakistan had started construction work on 700-km pipeline to import LNG from China. Talking to Voice of America (VOA), he said the long-awaited Iran Pakistan Gas Pipeline project would also be completed in recent future. He said Chinese funds would benefit Pakistan to complete its IPI project. He said Pakistan had been trying to overcome its energy crisis by importing gas from Iran. However, sanctions on Iran in the past did hamper the IPI development work, he added. To a question, he said that hopefully the project would be initiated in October that year and would be completed in 30 months. The Petroleum Minister said Pakistan and China were jointly funding that project. Gwadar port in Pakistan would be the central hub for "China Pakistan Economic Corridor" which would allow Western China to access to "warm waters", he added.

Copyright Associated Press of Pakistan, 2015

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OGDCL finds significant oil reserves in Chakwal

Oil and Gas Development Company Limited (OGDCL) appreciated in value by 2.2 percent as the index heavyweight petroleum giant declared to have found "significant reserves of hydrocarbons" in Punjab province. OGDCL, through a stock filing Thursday, informed its shareholders at the country's bourses that its exploration team had discovered oil in the Lower Sakessar over Chak Naurang South-1 exploration well located in District Chakwal. The structure of the well, the company said, was delineated, drilled down to the depth of 3220 meters targeting the Eocene reservoir of the sub thrust sheet to test potential of Lower Sakessar formation. "Significant reserves of hydrocarbons have been found," the oil and gas firm said. Initial daily output of the well, it said, was 180 barrels of crude oil with jet pump. The fresh discovery would add hydrocarbon reserves of the company and joint venture partners, the OGDCL hoped. The news of new discovery augured well for the listed company at Karachi Stock Exchange where value of the index heavyweight scrip grew by 2.8 percent to Rs 164.85.

Copyright Business Recorder, 2015

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Government to sign 15-year deal to import gas from Qatar

Govt will sign a deal next month to import gas shipments from Qatar for the next 15 years, a top Pakistani energy official said Wednesday, an agreement that should help tackle country''s''s chronic gas shortages. The flexible contract will allow Pakistan to import between 200 and 400 million standard cubic feet per day (mmcfd), said Mobin Saulat, head of state-run Inter State Gas systems, which oversees the pipelines. He would not comment on the price, but said it was "very competitive". "It''s finalised and there''s just a couple of formalities. We should be able to sign it in August," he said. Pakistan currently faces a gas shortage of around 2,000 mmcfd per day. Pakistan has imported seven spot cargos of liquefied natural gas (LNG) from Qatar since the completion of an LNG terminal in the southern port city of Karachi in April, said Saulat. "It''s fully operational," he said of the terminal. "It''s helped a lot in meeting the deficit." Pakistan''s gas companies are also upgrading their distribution system, he said, and Pakistan is expected to sign a government-to-government agreement with Russia to build a new pipeline from Karachi to the provincial capital of Lahore next month, he said. Russian company Rostec is interested in building the pipeline, he said.

Copyright Reuters, 2015

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Work on IP pipeline project restarted: Iranian CG

Consul General of the Islamic Republic of Iran Syed Hamayun Amir Khalili has said that work on the Iran-Pak gas pipeline project has restarted. He further said that Iran is also keen in extending co-operation to Pakistan in prevention of floods, construction of dams, promotion of trade and other sectors. He stated this while talking to Khyber Pakhtunkhwa Assembly Speaker, Asaid Qaiser here on Wednesday. Secretary, Provincial Assembly, Amanullah Khan and Additional Secretary, Nasrullah Khan were also present on the occasion. He said that the message of Iran is reconciliation, peace and harmony and his country is following the same path. Expressing profound grief and sorrow over damages wrought by recent flood, he expressed sympathies with the flood-hit people. Asad Qaiser said that Pakistan and Iran have enjoyed exemplary relations. He expressed happiness that Iran is on fast track of development. Qaiser said that the PTI chief Imran Khan is quite serious towards improving relations with Iran and the provincial government is following the directives of the party chief in this regard. On this occasion, he presented an assembly souvenir to the Consul General of the Islamic Republic of Iran.

Copyright Business Recorder, 2015

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500MMCFD of gas added to system in two years: NA body informed

A parliamentary panel was informed on Thursday that 500 Million Cubic Feet per Day (MMCFD) of gas was added into the system during the past two years while a similar amount from the old fields was depleted, resultantly national gas production remained stagnant at 4 Billion Cubic Feet per Day (BCFD). Briefing the National Assembly Standing Committee on Petroleum and Natural Resources, Director General Petroleum Concession (DGPC) Saeedullah Shah said that gas exploration and production activities from 2000 to 2012 remained stalled in the country due to multiple factors especially law and order situation. He added that during the past two years, the oil/gas exploration and production (E&P) companies have drilled a total 182 wells across the country. The committee met here under the chairmanship of Chaudhary Bilal Ahmad Virk to discuss the performance of Government Holdings (Private) Limited (GHPL) and briefing from DGPC related issues. DGPC informed the committee that the E&P companies working in the country have a total 179 exploration licensees of different blocks in the four provinces. He added that the DGPC has directed the E&P companies to complete their commitments on time otherwise necessary action will be taken against the defaulting companies. So far, the DGPC has issued show-cause notices to the operators of 16 blocks and revoked licenses of four blocks of the different companies. The committee directed the Ministry of Petroleum to engage local representatives of the respective areas before starting any exploration project in the country and preference should be given to local workers/labour. The committee directed that the fired employees of Rakhni Oil Field Project may be reinstated on their jobs as they are more experienced than newly employed workers. The Committee spurred earlier constituted two Sub-Committees on 4th December, 2014 to expedite their work for finalisation of reports till 23rd September, 2015. The Committee also added two Members - Chaudhry Khalid Javed Warriach, MNA and Shehryar Afridi to the Sub-Committee working under the Convenership of Malik Ihtebar Khan and one Member Sajid Ahmad, MNA to the Sub-Committee working under the Convenership of Sardar Ali Gohar Khan Mahar. The committee was briefed by the Ministry on the working of Government Holdings (private) Limited (GHPL) in different areas of the Country. It was also briefed about various ongoing/ new exploration projects of (GHPL). According to Petroleum Ministry officials, country's total gas demand supply gap stands at 4 Billion Cubic Feet per Day (BCFD) as Pakistan's total gas production stands a little over 4 BCFD, while total demand is estimated at 8 BCFD and managed demand at 6 BCFD. "The government is making all possible efforts to control the gas crisis, but given the nature of gas shortage, if the government failed to complete all the important gas import projects with the next few years, the shortage will persist" an official of the DG gas told the committee. Pakistan's demand for gas is expected to double in the next 10 years, he said, adding the current gas production of 4 BCFD for below the managed demand of 6 BCFD. "At the current rate of growth, by 2020, the demand could touch 13 BCFD." To deal with the gas crisis, the government has started importing LNG, initiating work on Turkmenistan-Afghanistan-Pakistan-India (TAPI) and Iran-Pakistan (IP) gas pipeline projects. Completion of all these projects within next few years, a total 4 BCFD gas to the country will be added into the system. The official said that at the same time Pakistan's indigenous gas reservoirs are rapidly depleting and within next few years Sui, Zamzma and Qadirpur gas fields along with many other small gas fields will be dried and the gas shortage will remain at the same level. The meeting was attended by Malik Ihtebar Khan, Muhammad Afzal Khokhar, Rana Afzaal Hussain, Mian Tariq Mehmood, Rana Muhammad Ishaq Khan, Rasheed Ahmad Khan, Chaudhry Khalid Javaid Warraich, Nawab Ali Wassan, Shehryar Afridi, Sajid Ahmad and Akram Khan Durrani.

Copyright Business Recorder, 2015

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Iran deal fuels tussle for gas pipelines

A landmark deal on Iran''s nuclear programme has breathed new life into plans for a gas pipeline through Pakistan - and sparked a geopolitical tussle, with Russia looking to expand its influence, observers say. With sanctions on Iran likely to ease and peace talks between the Taliban and Afghan government getting under way, wrangling is intensifying over the proposed pipelines, which would link Central Asia to the Middle East. Islamabad last week hailed the nuclear deal, struck after long negotiations in Vienna, as reviving a stalled project to pipe gas from Iran''s southern fields to energy-starved Pakistan. The South Asian state is desperate for solutions to a long-running power crisis that has sapped economic growth and left its 200 million inhabitants fuming over incessant electricity cuts. The $7.5-billion Iran-Pakistan (IP) pipeline was inaugurated with great fanfare in March 2013 - but the project immediately hit quicksand in the form of international sanctions on Tehran, which meant cash-strapped Pakistan struggled to raise the money to build its side. Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi said the Vienna deal should allow Islamabad to make good on its agreement to finish the pipeline and buy Iranian gas. "Now hopefully, as the sanctions are removed, it facilitates us to address our energy need and also meet the contractual obligation," Abbasi told AFP. Tehran has already built its part of the 1,800-kilometre (1,100-mile) pipeline which should eventually link its South Pars gasfields to the Pakistani city of Nawabshah, close to the economic capital Karachi. As part of an ambitious $46 billion economic corridor linking western China to the Middle East through Pakistan, Beijing recently started work on the section of the pipeline between Nawabshah and the port of Gwadar, close to the Iranian border. Once this is completed, Pakistan will build the last 80 kilometres to Iran - before the 2018 general election, the government hopes - and it could in future extend the connection north-east to China, according to government sources. Russia is interested in supporting the IP pipeline through energy giant Gazprom, according to the Russian embassy in Islamabad. Moscow has historically had closer relations with India, but is pivoting more to Islamabad as New Delhi and Washington become closer allies. Yury Barmin, an analyst specialising in Russia''s Middle East policy, said that by using the IP pipeline to get closer to Pakistan, Moscow wanted to show India it had other options in the region. "At the same time Russia really wants to explore commercial opportunities for its defence industry in the wider MENA (Middle East) region, and Pakistan is probably the only remaining untapped market for Moscow in that sense," Barmin told AFP. Islamabad and Moscow signed a defence cooperation agreement in November last year. The two countries are also close to finalising an agreement to build a gas pipeline linking Karachi, which has an LNG terminal, to the eastern city of Lahore, said Mobin Saulat, the CEO of Inter State Gas Systems, the publicly-owned company in charge of gas pipelines in Pakistan. Saulat told AFP these moves meant that the Turkmenistan-Afghanistan-Pakistan-India pipeline (TAPI), an even more ambitious project, would likely take a back seat for now. "LNG is happening already, we have the supply in place, the happening of IP with the latest development is of course next. And TAPI, in the list, will come at the end," he said. TAPI, valued at up to $10 billion, would pump gas from Turkmenistan to Pakistan and India, through Afghanistan. But it is politically complex, requiring cooperation between at least four governments, and logistically challenging, as the pipeline would pass through areas of Afghanistan and Pakistan plagued by Taliban and separatist insurgents. The Taliban''s summer offensive is in full swing but there is hope for peace after militant and government representatives met for talks in Pakistan a fortnight ago. Last September France''s Total was working to take the lead on TAPI, but the rise of Russian interest could change the field. "They are talking to three companies, Total is number one and then a Russian and a Chinese company. Total definitely is the most advanced in the talks," oil minister Abbasi said, citing briefings from the TAPI steering committee. Russian participation in TAPI would eventually allow Moscow to connect the pipeline to others in the former Soviet Union, Barmin noted. But there could be more trouble ahead. The CEO of Rostec Sergey Chemezov, considered close to Russian President Vladimir Putin, is himself the subject of US sanctions over the Russian annexation of Crimea.

Copyright Agence France-Presse, 2015

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