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News Headlines for the month of
JANUARY 2016

CHINA-PAKISTAN ECONOMIC CORRIDOR: DAR REVIEWS WORK ON POWER, PETROLEUM PROJECTS

Federal Finance Minister Ishaq Dar on Saturday chaired a high-level meeting to review progress of development projects in the power and petroleum sectors, including those being undertaken under the China-Pakistan Economic Corridor (CPEC). Federal Minister for Water & Power Khwaja Muhammad Asif, Federal Minister for Petroleum & Natural Resources Shahid Khaqan Abbasi, Secretary to Prime Minister Fawad Hasan Fawad and senior officials of the ministries of finance, water & power, P&NR, PPIB, Nepra and NTDC attended the meeting. The meeting was briefed about the progress on hydel, gas, wind, solar and coal-based projects being undertaken for enhancing power generation. Financial arrangements and the timelines being followed in respect of each of these projects were also deliberated upon at the meeting. It also reviewed the arrangements vis-à-vis provision of gas for power projects and development of the required infrastructure. The meeting was apprised that a large number of projects in both the power and petroleum sectors would be completed by December 2017, which would add up to 10,000 megawatt of electricity to the national grid and thus help resolve the problem of energy shortage. Underscoring the need for following timelines of different projects in letter and spirit, the finance minister desired for update on the progress of these projects on regular basis.-PR

Copyright Business Recorder, 2016

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PSO ALLOWED TO IMPORT, SUPPLY LNG DIRECTLY

A meeting of the Economic Co-ordination Committee of the Cabinet has effected an amendment in the Petroleum Policy to allow Pakistan State Oil Company for import of LNG and supply it to the gas companies as well as buyers directly. An official said an ECC meeting presided over by Finance Minister Ishaq Dar approved an amendment to the 2B3 clause of petroleum policy to exempt the PSO from this clause. As per 2B3 clause, LNG buyers are required to enter into an agreement with terminal and or/operator for LNG receiving storage and re-gasification services at its terminal under the tolling agreement, sources said. The ECC sources further added that a new clause included in the policy ''provided the public company so designated by the government would be exempted from 2B3''. Sources on condition of anonymity further stated that the purpose of the amendment was to allow empowering PSO to import LNG as well as supply it to buyers by using the infrastructure of gas companies. He added that this was a legal requirement which the government has now fulfilled. The government plans to produce 1000MW of electricity from small gas fields has also died primarily because the gas fields do not have capacity to provide long term gas supply to the envisaged power plant. As a result, now the ECC after detailed deliberations on the issue decided to shift these plants on RLNG between 100-250 MW with a cumulative capacity of 1000 MW in the private sector. On a proposal of the Ministry of Ports & Shipping regarding grant of EPC contracts to Chinese firm(s) under the Framework agreement between Governments of Pakistan & China, the ECC constituted a Committee to examine the applicability of Rule 5 of PPRA Rules 2004. The ECC also considered and approved the proposal put forth by the Privatisation Division for grant of two months salaries to employees of Pakistan Steel Mills (PSM). The ECC also directed PSM to consider pursuing its request to National Tariff Commission for imposition of anti-dumping duties, which it had filed with the Commission sometime ago. The ECC approved the proposal submitted by Ministry of States and Frontier Regions for provision of 124,000 metric tons of wheat costing Rs 4.977 billion to TDPs in FATA and KP through the WFP apparatus.

Copyright Business Recorder, 2016

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LNG ACCORD: PRIME MINISTER TO VISIT QATAR ON FEBRUARY 103

Prime Minister Nawaz Sharif will visit Qatar on February 10 to witness the signing of an agreement for import of liquefied natural gas (LNG) from Qatar. The Prime Minister will also hold meetings with Amir of Qatar Tamim bin Hamad Al Thani and Prime Minister Abdullah bin Nasser bin Khalifa Al Thani during his stay in Qatar. During talks with his Qatari counterpart, the Prime Minister would discuss the situation in the region, bilateral ties and other matters of mutual interest. According to official sources, the date for the Prime Minister''s visit to Qatar has been finalised and an announcement in this regard will be made next week. Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi, Minister for Finance Ishaq Dar, Minster for Water and Power Khawaja Asif and senior government officials will accompany the Prime Minister during the visit.

Copyright Independent News Pakistan, 2016

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33 WIND, SOLAR ENERGY PROJECTS: CHIEF MINISTER HANDS OVER LAND ALLOTMENT LETTERS

The investment of $4 billion in the energy sector to produce 2040 MW solar and wind power would bring a revolution in the energy-short country. This was stated by Sindh Chief Minister Syed Qaim Ali Shah while addressing the land allotment ceremony in which 33 power companies were given allotment orders here on Saturday. The ceremony was attended by Senior Minister for Finance & Energy Syed Murad Ali Shah, Secretary Energy Agha Wasif and representatives of national and international power companies. The chief minister said "Our country is facing shortage of energy, therefore reducing the burden of the federal government we have worked out solar and wind power projects for which 33 companies have been involved". The power produced from those projects to be given to the national grid, he added. He congratulated 33 companies which were given the land and expressed hope that they would work hard to produce power within shortest possible time. He said the government is giving top priority for the development of these projects and the allotment of 18,251 acre land in Thatta, Jamshoro, Sukkur and Shaheed Benazirabad districts is a part of this serious and sincere effort. The chief minister handed over the land allotment orders to 33.

Copyright Associated Press of Pakistan, 2016

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K-ELECTRIC ACQUIRES LAND FOR COAL-FIRED PROJECT

K-Electric has acquired land at Port Qasim for its 700 MW Coal-Fired project which would bring investment of over $1 billion into Pakistan. According to a KE press release, the power utility had entered into a Joint Development Agreement (JDA) with China Datang Overseas Investment Company and China Machinery Engineering Company last year and has achieved another milestone in acquiring the land needed for this important project. It said JDA with the Chinese giants for the development of this project at Port Qasim has progressed considerably since it was signed. This would result in diversifying the fuel mix and lowering the generation cost resulting in positive impact on end consumer tariff. CEO K-Electric Tayyab Tareen said that the acquisition of land is an important milestone for the coal project. He added that K-Electric is committed to its vision of generating and supplying affordable electricity for its consumers.-PR

Copyright Business Recorder, 2016

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OGDCL MAKES TWO MAJOR DISCOVERIES IN SINDH, KP: KHAQAN

Oil and Gas Development Company Development Limited (OGDCL) has made two major discoveries of gas and oil in Sindh and KP. Addressing a press conference here Thursday, Federal Minister for Petroleum Shahid Khaqan Abbasi said "OGDCL has found 35.8 Million Cubic Feet per Day (MMCFD) of gas from Thal East-well 1 located in Sindh and 1,032 barrels per day crude oil from Nashpa-well 5 in KPK." Abbasi added that the state-owned company had targeted to drill 31 wells in the ongoing financial year. He said OGDCL will add 125 MMCFD of gas to the national distribution system by the end of March from Kunar Pasaki gas field and the field will also produce up to 380 tons of Liquefied Petroleum Gas (LPG) per day. He said the Khyber Pakhtunkhawa government failed to complete gas-based power plants but was asking for gas supply, adding that the federal government was ready to provide gas to provincial power projects whenever completed. He said Pakistan Petroleum Limited (PPL) had also made two discoveries which include 468 barrels per day crude oil and 56 MMCFD of gas. "These two companies would be able to add 90 MMCFD gas in the system which would help minimize gas load shedding," Abbasi said, adding that Punjab was facing 40 percent gas load shedding and the government would be able to overcome load shedding in next winter by importing LNG. He said that Sui field was producing up to 300 to 350 MMCFD of gas and the government would have to give new price to attract further investment from this field. He said one-year extension in the lease had been granted to PPL and permanent extension would be given after signing an agreement with Balochistan government. He said LNG-based power plants were being set up and the government would be able to overcome load-shedding to greater extent in 2017. He said Iran-Pakistan (IP) gas pipeline project was delayed due to sanctions against Iran. He said work would start on this project after sanctions are lifted. The minister said gas shortage for domestic consumers in Punjab stands at 40 percent and the management was forced to suspend gas for domestic consumers for a few hours a day. He added that his ministry has decided to take up the issue with Council of Common Interests (CCI) as every domestic sector gas consumer of the federation has the right to have gas supply at least for domestic use. He said the Economic Coordination Committee (ECC) had authorized Pakistan State Oil (PSO) to sign commercial agreement with Qatar gas. He said commercial agreement would be signed after approval of the board of directors. "The price of LNG stands below $5.50 per mmbtu after revised deal with Qatar," he said. He said textile sector was getting 60 mmcfd LNG to meet the demand. He said three names had been moved to Prime Minister for appointing permanent head of SNGPL. He said Russia was going to implement LNG pipeline project on BOT basis and a new company would work on this project in case Russian company faces sanctions. He said all sectors including textile, CNG and power sector would have to pay full cost of LNG. The ECC also gave go ahead to PSO to strike G2G LNG deal with Qatargas following the approval of all the stakeholders. As per the Ministry of Law's opinion the deal between PSO and Qatargas was is G2G basis and the ECC has specifically sought Law Ministry's viewpoint. Managing Director (MD) OGDCL Zahid Mir said the company would meet the target of drilling 31 wells by end of June this year. "125 MMCFD of gas from KP would be added to the system in March," he said, adding that the company would also start producing 380 tons LPG in this period. He said that OGDCL was evaluating samples of shale gas from the wells which was drilled during the last two years. He said that contract had been awarded to a firm to find shale gas potential in one best well which would be pilot project. "More wells would be drilled if we find potential results," he said. He said that OGDCL had also started work on those wells in Balochistan which were under force majeure. He said the company had 24 blocks in Balochistan and work had been started on 8 blocks.

Copyright Business Recorder, 2016

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UPSTREAM OIL, GAS SECTOR: PRIME MINISTER URGES MOL PAKISTAN TO INVEST

Prime Minister Nawaz Sharif Thursday invited MOL Pakistan to invest further in the upstream oil and gas sector of Pakistan. "Un-explored offshore region of Pakistan provide an opportunity for investment," he said while talking to Berislav Gaso, Executive Vice President MOL Pakistan Oil and Gas Company here at the PM House. Minister for Petroleum Shahid Khaqan Abbassi was also in attendance. The Prime Minister appreciated the MOL ventures in Pakistan and said the government was making all out efforts to enhance oil and gas exploration activities in the country through investment-friendly policies. The Prime Minister said the government has announced Petroleum (Exploration & Production) Policy, 2012 which was rated as one of the best policies in the region. The Policy provided lucrative incentives to E&P companies in term of price and other inducement, the Prime Minister said. Berislav Gasco appreciated the investment-friendly policies of the government and expressed satisfaction over the reformed economic outlook of the country. The delegation apprised the PM of its successful investment ventures in Pakistan and highlighted the areas of future prospects. They said MOL Pakistan was always on the look for further investment opportunities in Exploration and Production (E&P) sector of Pakistan through involvement in further exploration blocks. Gasco said MOL Pakistan sincerely believed that its E&P skill inventory gathered over the period of time could positively contribute towards the self-sustainability of Pakistan''s energy needs.

Copyright Associated Press of Pakistan, 2016

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SHAHBAZ, CHINESE TEAM DISCUSS INVESTMENT IN ENERGY SECTOR

A high-level Chinese delegation led by Chairman of China Three Gorges Corporation, Lu Chun met Punjab Chief Minister Shahbaz Sharif, here on Tuesday. Matters regarding investment in energy sector in Punjab especially in small hydel projects and promotion of cooperation were discussed in the meeting. China Three Gorges Corporation expressed willingness to cooperate with Punjab in small hydel projects and assured that a delegation of experts will soon visit the province for this purpose. While talking to the Chinese delegation, Shahbaz said that China is a sincere and reliable friend of Pakistan. He said that new avenues of economic cooperation have opened between China and Pakistan during the tenure of Prime Minister Nawaz Sharif. He said that economic package of 46 billion dollars given by China is great gift for Pakistan and reflects the full confidence of the Chinese President in the leadership of Prime Minister Nawaz Sharif and deep love for Pakistani nation. Shahbaz said that China-Pakistan Economic Corridor is a game changer for the region including Pakistan. He said that work has been started speedily on various projects under CPEC and the people of the whole country will benefit from these projects. He said that Punjab government has taken effective measures for the completion of CPEC projects within the stipulated period. He said that work is in progress speedily on a 1320-megawatt coal power project in Sahiwal while a 900-megawatt solar project is being set up at Quaid-e-Azam Solar Park Bahawalpur. He said that transparency, standard and speedy completion of projects is hallmark of Punjab government, therefore, foreign investors are coming to the province and are being provided facilities on priority basis. He said that there is a vast scope for investment in solar, wind, especially small hydel projects in Punjab and China Three Gorges Corporation should consider cooperation with Punjab government and benefit from the vast opportunities available in energy sector in the province. He assured that all-out facilities will be provided for this purpose. Chairman China Three Gorges Corporation Lu Chun said that Chief Minister Punjab Shahbaz Sharif is working very hard for the implementation of energy projects and his extraordinary abilities and capacity to work speedily is also appreciated in China. He said that China Three Gorges Corporation will cooperate with Punjab government in energy sector especially in small hydel projects and a team of Chinese experts will soon visit Punjab to review the scope of cooperation. The meeting also agreed to identify priority projects in energy sector for promotion of cooperation. Executive vice presidents and senior officials of China Three Gorges Corporation were also present on the occasion. Provincial Minister for Minerals Chaudhry Sher Ali Khan, Chairman Punjab Power Development Company, Chairman Planning & Development, Senior Member Board of Revenue, Member Water WAPDA and concerned officers also attended the meeting.

Copyright Business Recorder, 2016

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“RING-FENCING” OF IMPORTED LNG: ISLAMABAD BUILDING RS 60 BILLION KARACHI-SAWAN PIPELINE

The federal government has finalised a Rs 60 billion "mega project" to build a 350-kilometer long pipeline for the supply of Liquefied Natural Gas (LNG) in Sindh province. This LNG pipeline comes in addition to the 1100km transmission line Russia would be building from Karachi to Lahore at a cost of $2.5 billion by 2020. The 42" diameter gas pipeline would be laid from Pakland to Sawan gas field to what SSGC Managing Director Khalid Rahman said "ring-fence" the imported re-gasified fuel. "The 1.2 bcfd LNG coming has to be what they call it ring-fenced and move to the transmission system," the MD told a group of journalists here at SSGC head office Friday. This, he said, would help the energy-scarce country avoid line losses. SSGC''s Unaccounted-For Gas (UFG) stands at 15 percent. Pakland Cement being situated 56 kilometers off Karachi, Sawan gas field of Khairpur district is a joint venture of OMV Pakistan, its operator, ENI Pakistan, Pakistan Petroleum Limited, Moravske naftove doly and Government Holdings. "We have some mega projects running right now," the MD said. "This is something that is really taking a lot of our time," said Khalid who Friday was visited by some local industrialists asking for the supply of much-debated LNG. The production-conscious industrial consumers, he said, wanted to get rid of SSGC''s gas closures on Sundays. The proposed gas pipeline is envisaged to deliver about 1.2 billion cubic feet per day (bcfd) to its consumers in Punjab province, he said. The new LNG pipeline, the construction of which the MD said would be completed by December 31 this year, would replace the present LNG swapping arrangement between SSGC and SNGPL. The new project appears to have come in the backdrop of Sindh government''s reservations over the swapping arrangements between two utilities, SSGC and SNGPL, which the provincial government claims was compromising the energy security of Sindh, which produces country''s 69 percent gas. "It is being carried out without the knowledge or concurrence of Government of Sindh," Tariq Ali Shah, Sindh''s director oil and gas, told Ogra''s Monday''s hearing at a local hotel. "We came to know that unknown sector consumers in Sindh have burned bit hotter commingled gas and in turn not only equivalent amount of gas but additional supply of 1,086 mmcf gas is swapped to SNGPL under a unique concept of "deemed sales!," the official said warning "this is highly undesirable". MD SSGC Khalid, however, stressed that the multibillion-dollar pipeline project was meant to improve the existing distribution and transmission infrastructure.

Copyright Business Recorder, 2016

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ARL INSTALLS 110KW SOLAR POWER SYSTEM

Attock Refinery Limited (ARL) has installed a 110 kilowatts solar power system to run operations of the refinery on renewable energy. Adil Khattak, Chief Executive Officer ARL while inaugurating the plant said that ARL following its tradition of being pioneer and pace setter in the energy sector, has achieved another milestone, which will not only reduce environmental hazards but save Rs 2.7 million per annum in electricity bills of the refinery. The solar power system has been designed using available roof top of the office and will provide renewable green energy to the building and to electrical network of ARL. This initiative of ARL will not only reduce its energy cost but is also a step towards providing a clean environment. Khattak said that we need to realise the importance of renewable green energy to facilitate our present and future generations. He expressed hope that with this initiative, ARL will motivate others to follow their suit and take full benefit of the abundant solar energy Pakistan is blessed with. Comprising 440 panels of 250 watts each, this 110KW system is capable of producing more than 180,000 KWh per annum, providing a benefit of more than Rs 2.7 million at current electricity rates. It is likely to generate enough solar energy over the next 10 years to prevent more than two million pounds of carbon dioxide entering into atmosphere - tantamount to taking more than 200 cars off the road for one year or planting more than 25,000 trees. The unique feature of this project is that the 110KW solar power system was designed and developed at the Attock Group's in-house facility which is equipped with state-of-the-art production and testing equipment.

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