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News Headlines for the month of
JUNE 2016

BADIN IV SOUTH BLOCK CONCESSION: PEL MAKES SIGNIFICANT GAS, CONDENSATE DISCOVERY

Petroleum Exploration (Private) Limited (PEL), a private sector local oil/gas Exploration and Production (E&P) Company, has made a significant gas and condensate discovery in its Badin IV South Block Concession located in District Badin, Sindh province. The PEL is the operator of the Block. The well Ayesha North-1 was spud on March 25, 2016 with an objective to test the upper sands of the Lower Goru formation up to a depth of 2,800 meters inside Basal Sand whichever is shallower. The well reached to a total depth of 2,820 meters on May 10, 2016. Based on wire line logs and testing the well flowed 8.1 MMCFD of good quality natural gas at Choke 48/64 with 49 BPD of condensate from "A" Sand unit of Upper Sands. The wellhead pressure was recorded as 648 PSI. The discovery augurs well for the energy starved nation and will act as stimulant for further exploration in the region. According to a senior PEL official, the company Ayesha North-1 is the third gas discovery in the block and the area has high potential to produce more gas. The official said that the company was producing 40MMCFD of gas from the field but as yet not connected with the distribution system. The PEL from Amina-I well is producing 16MMCFD of gas, from Ayesha-I 15 MMCFD and latest discovery is over 8MMCFD.

Copyright Business Recorder, 2016

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TAP POWERS INTERCONNECTION PROJECT: ADB HIRES CONSULTING FIRM TO UNDERTAKE PRE-FEASIBILITY STUDY

Asian Development Bank (ADB) has hired a consulting firm to undertake pre-feasibility study and investigate time, cost and technical parameters of various power interconnection options for Turkmenistan- Afghanistan- Pakistan (TAP) power interconnection project, well informed sources toldBusiness Recorder. The sources revealed that ADB has convened a meeting for the energy investment forum of senior officials of the three countries on July 18-20 in Islamabad. The meeting would also discuss progress made since April 11, 2016 and will formalise the next steps and milestones towards project preparation. According to sources, following the signing of the Memorandum of Understanding (MoU) on the proposed project by the Heads of Governments of Turkmenistan, Afghanistan and Pakistan in December 2015, a tripartite meeting was facilitated by ADB on the sidelines of the 21st Energy Sector Co-ordination Committee (ESCC) meeting in Islamabad. The purpose of side-meeting was to (i) define project concept; (ii) agree on analytical and project preparatory work to be undertaken, and (iii) reach an agreement on the way forward. The sources said, on April 11, 2016, a kick-start presentation was made by ADB to introduce the project and present a list of options for power interconnections and power trade among the three countries through various 500-kV and 220kV interconnection routes, under the general framework of Central Asia-South Asia regional Electricity Markets (CASEREM). The representatives from the three countries updated the participants on their respective investment plans including power generation and transmission network expansion, pros, cons and limitations of interconnection routes and how the proposed 500kV transmission line project ( Mary(TKM), Heart-Kandahar(AFG), Chaman-Quetta(Pak) could be developed. It was agreed that ADB would facilitate and co-ordinate this effort from the project concept to project operation; and will assist the three governments in project preparation, financing and finalisation of power purchase and sales agreements. It was noted that an option analysis/ pre-feasibility study would be commissioned shortly to investigate the (i) timing; (ii) cost; and (iii) technical parameters of various power interconnection routes/options. The study would also analyse the phased approach for bulk power transfer and cost effectiveness of each option vis generation in Turkmenistan and demand in Afghanistan and Pakistan. ADB will draft the terms of reference of the study and will submit to the three countries by April 30, 2016 for their comments. It was confirmed that a technical working group will be established for all project related discussions, comprising officials from the three countries (preferably one from the Ministry and one from the power utility). In this connection, Afghanistan nominated Aman Ghalib (Deputy Minister Energy and Water) and Shekeeb Nessar (Chief Operating Officer DABS); Pakistan nominated Umar Rasul, Additional Secretary (Power) and Rehman Maqbool GM Planning (Power) National Transmission and Despatch Company (NTDC) while Turkmenistan was advised to communicate the names of its representatives to ADB. It was agreed that the project technical working group will hold its first meeting in June 2016 to formalise the arrangements and review the progress of consultant. The final findings of the options, analysis, pre-feasibility study will be targeted for presentation in August 2016 to the technical working group. After requisite deliberations and internal approvals by respective governments, the roadmap of the project will be formally agreed at the ministerial level meeting of the three countries on the sidelines of the October 2016 CAREC ministerial meeting in Islamabad. The sources said the project-related documentation and protocol will be signed by the three governments during the CAREC ministerial meeting scheduled to be held in October 2016 in Islamabad.

Copyright Business Recorder, 2016

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E&P FIRMS MAKE SIX OIL/GAS DISCOVERIES IN JUNE

National and International oil/gas Exploration and Production (E&P) companies operating in Pakistan have made six oil/gas discoveries in June which is a record in a single month. This was stated by Federal Minister for Petroleum Shahid Khaqan Abbasi while briefing National Assembly Standing Committee on Petroleum and Natural Resources which was held here on Tuesday under the supervision of Chaudhary Bilal Ahmed Virk. Abbasi said that 50.1 million cubic feet per day (mmcfd) of gas and 2,359 barrels of crude oil had been added into the system from new oil/gas discoveries, adding that four out of six discoveries were made in Sindh province and two in Khyber Pakhtunkhawa (KP). He said that state owned Oil and Gas Development Company Limited (OGDCL) had made two discoveries, MOL BV Pakistan two, Pakistan Electron Limited (PEL) one and United Energy Pakistan (UEP) also made one discovery. The energy firms have discovered 31.6 mmcfd gas and 339 barrels per day crude oil in Sindh province whereas 18.5 mmcfd gas and 2020 barrels oil in KP province. Responding to queries of committee members, Managing Director (MD) Sui-Northern Gas Pipelines Limited (SNGPL) Amjad Latif said gas utilities were not in a position to provide connections to all the applicants. He added that SNGPL was receiving 1.1 BCFD of gas and many major gas resources were rapidly depleting as 100 mmcfd of gas was depleting from SNGPL dedicated gas fields. He maintained there was even no gas available for domestic consumers in winter, adding that purchasing cost of gas for domestic consumers stood at Rs 510 per mmbtu but 85 percent domestic consumers which come under first slab were paying just Rs 110 per mmbtu. He said 85 percent domestic consumers were paying less than 50 percent cost of gas. "Industrial and commercial consumers were cross-subsiding these consumers. However, commercial and industrial consumers had been switched to LNG and therefore, burden of cross subsidy was being shouldered by SNPLG which had hit the company." Despite decline in gas production, he informed the body that 8,000 kilometers pipeline would be laid during ongoing year. He said that SNGPL had network of 0.3 million consumers whereas 1.5 million application for new connections were pending. The country was facing gas shortages as politicians were using it as a tool to win elections. During the meeting, Member National Assembly from PML-N Mian Tariq Mehmood snubbed MD SNGPL Amjad Latif and alleged that company had issued 100 gas meters in his constituency to please his political rival Imtiaz Safdar Warriach despite the fact he said that he had been denied despite repeated requests. He said his political opponent Imtiaz Safdar Warraich had been creating hurdles for PML-N but MD SNGPL had issued gas meters in response to his request to damage his political image. Chairman Committee Bilal Virk showed anger on Director General Petroleum Concession (DG) PC Saeed-ullah Shah and accused of him for not responding to the committee for last two years. He said his attitude was non-sense and lamented that he was not co-operating with the committee. He sought record of the past meetings to show response of DGPC. The committee also took up the matter of issuing LPG stations licenses to the defaulters. The committee noted that licenses had been issued to defaulters CNG stations. The committee recommended amending rules of Ogra to ensure clearance of SNGPL, WAPDA and banks before issuing LPG stations licenses.

Copyright Business Recorder, 2016

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OGDCL DISCOVERS GAS FROM THAL WELL

State owned Oil and Gas Development Company Limited (OGDCL) has discovered gas from Thal well located in district Sukkur, Sindh province. The company announced here on Monday that the exploratory well Thal West No 1 which is 100% owned by OGDCL has produced 17.2 MMSCFD of gas through 36/64" choke at Well Head Flowing Pressure (WHFP)=2,820 Psig. The structure of Thal West No 01 was delineated, drilled and tested using OGDCL's in house expertise. The well was drilled down to the depth of 3,983 meters, targeting to test the hydrocarbon potential of Basal Sands of Lower Goru Formation, as primary objective. Significant reserves of Hydrocarbon have been found in the Well Thal West No 01. According to a senior company official the discovery paved the way for more exploratory activities in desert area and the oil/gas Exploration and Production (E&P) companies will look into explore Cholistan desert now. The discovery has opened up a new avenue and would add to gas reserve base of OGDCL and of the country. The company is the top oil/gas producing company of the country with crude oil production 45,000 barrels per day whereas gas production 1.1 Billion Cubic Feet per Day (BCFD). The company has planned to take the gas production to 1.25 BCFD and crude oil production to 50,000 barrels a day. The official said that within next three months Kunnar Pasakhi will come into production which will be followed by Nashpa. These two projects would increase the production of gas by around 140 Million Cubic Feet per Day (MMCFD) and oil production will increase by another 5,000 barrels per day. The company has developed the capability of immediate delivery of crude oil discoveries; however, gas discoveries require time.

Copyright Business Recorder, 2016

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ABOUT 250 MICRO-LEVEL HYDRO PROJECTS TO BE OPERATIONAL BY 2016-END

About 250 micro-level hydro projects, executed through community based local institutional mechanism, will become fully operational and start providing electricity to some 24,000 people in hilly areas of Khyber Pakhtunkhwa by the end of 2016. This was disclosed by heads of various non-governmental organisations working on the construction of hydro projects while addressing a joint press conference at Peshawar Press Club on Sunday. Contractors headed by Fazal Rabbi, chief executive officer of Hydrolink Engineering and Equipment Company (Pvt) limited sharing work experience with communities, said that people living in the remote localities of in Chitral, Dir and Batgram districts had highly welcomed launching of the micro-level hydro projects as they did not have power supply since independence of the country. He said it was extremely sad situation that power supply lines had passed through different localities but some villages in the districts were not given the facility of electricity for unknown reasons. The micro-level hydro projects, he said, were not less than blessing for the hitherto neglected localities. Appreciating the Khyber Pakhtunkhwa government, Rabbi said that the hydro projects would help tap the water potential and enable people to get electricity on low cost to increase their income. Besides the people reduce dependence on imported fuel (kerosene) and would protect their forests. He said that the hydro projects were more useful for local people as it was low cost from Rs2 to Rs4 per unit decided mutually by the local community. "We, being the implementer, are confident that by the end of 2016 about 250 MMHPs will become fully operational and start providing electricity to some 245,000 mountain people through community-based local institutional mechanism. The NGOs/construction firms, he said, were working with Pakhtunkhwa Energy Development Organization (PEDO) under close supervision and vigilance of Energy and Power (E&P) Department of Khyber Pakhtunkhwa since 2014, saying that the 356 MMHPs were purely government-funded community empowerment and participatory project working successfully." "We have so far found PEDO's new management and E&P Department fully committed and working hard in reforming and transforming PEDO into self-sustainable institution that will not only fulfil the provincial energy demands but also contribute to the national energy security," he claimed. They were initiated in China and successfully practised in Switzerland, Nepal, Indonesia, Sri Lanka, Bhutan and others with government support. However, in Pakistan, the KP Government has for the first time initiated these MMHPs projects. The Hydrolink chief said that PEDO was being run very transparently and with zero tolerance to any bribery, corruption and irregularity because license was given during two weeks of application and feasibility was submitted within six months. The institutional mechanism and responsiveness has very much improved and further struggles are underway to completely standardise its services and make the organisation fully result oriented. He disclosed that the 356 MMHPs progress had suffered due to some initial challenges but the new management overcomes them in time. However, the overall progress and quality of work has no precedent. The projects are very closely and regularly monitored by PEDO, E&P Department and provincial monitoring and evaluation (M&E) directorate. The quality of work has remained exemplary as compared to the costs. The progress has now been expedited after the removal of the procedural and technical hindrances.

Copyright Business Recorder, 2016

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SHANGHAI POWERS DECIDES TO BUY K-ELECTRIC

All is set to give K-Electric under the control of Shanghai Powers, Aaj News reported on Saturday. K-Electric will see another change of owner as Shanghai Powers is said to have decided to buy it.

Copyright Business Recorder, 2016

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SOLAR POWER PROJECTS: BALOCHISTAN GOVERNMENT SIGNS MOU WITH KUWAITI COMPANY

A Memorandum of Understanding (MoU) was signed between Balochistan government and a Kuwaiti Investor Company "Ener Tech" in Quetta on Thursday. Under the MoU the Ener Tech will install 50MW to 500MW solar power generation plants under a phase wise programme. Provincial Energy Secretary Khaleeq Nazeer Kyani and Chief Executive of the company Abdullah Almatari signed the memorandum. Meanwhile, a delegation of Ener Tech led by its Chief Executive Abdullah Almatari called on the Chief Minister Nawab Sanaullah Khan Zehri in Quetta. During the meeting, the two sides discussed matters of bilateral interest. Talking on the occasion, Nawab Sanaullah Khan Zehri said that the government wants promotion of foreign investment in various sectors including Solar Energy sector and for this purpose, a comprehensive policy has been chalked out to provide maximum facilities to foreign investors.

Copyright Independent News Pakistan, 2016

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RECORD POWER GENERATION OF 17,272 MEGAWATTS ACHIEVED

Power sector achieved yet another milestone and the total electricity generated peaked to a record 17,272 MW for the first time in the country's history. According to an official announcement, hydel generation contributed 6,080 MW while the Independent Power Plants (IPP) and Generation Companies (GENCO) contributed 11,192 MW. Secretary Water and Power, Yunus Dagha is personally monitoring generation and distribution of electricity It may be noted that on June 8, 2016 the power generation reached to 17,120 MW which was a record over the previous years 16,866 MW generated. On Saturday at the Iftari time around 98 percent of urban areas and more than 90 percent of rural areas were provided uninterrupted power supply. A large number of power generation and transmission projects are already in different stages of execution which will ultimately lead to an end to chronic load-shedding in the country by 2018.

Copyright Business Recorder, 2016

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PPDB KEEN TO SET UP 220 MEGAWATTS COAL POWER PLANT AT VEHARI

Punjab Power Development Board (PPDB) is keen to build a 220 megawatts coal-based power plant at Vehari, said a stock filing Friday. The power plant, to be set up by an associated company of Service Industries Limited S2 Power Limited, was earlier planned to be constructed at Gujranwala. "Please refer our notification dated February 19, 2016 regarding issuance of Letter of Interest by Punjab Power Development Board (PPDB) to the consortium for conducting feasibility study for development of 220 MW coal-based power plant project to be located at Gujranwala in Punjab - the project to be set up by the associated company, S2 Power Limited," said Waheed Ashraf, company secretary at Service. The PPDB, he said, had issued a revised Letter of Interest for the development of the project at Vehari in Punjab instead of Gujranwala.

Copyright Business Recorder, 2016

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POL DISCOVERS HYDROCARBONS IN MAKORI

Pakistan Oilfields Limited (POL) Friday said to have discovered hydrocarbons in Makori Deep-01 well. According to company secretary Syed Khalid Nafees, MOL, the operator of TAL Block, has reported the fresh discovery under Makori Development and Production Lease which has been drilled and is currently under testing phase. "As a result of Drill Stem Test (DST) conducted at the well to test the potential of Lockhart formation, the well has tested 2,020 barrels per day of crude oil, 5.4 MMscf of gas per day at 40/64" fixed choke size at the flowing wellhead pressure of 1,177 psi," he said in a stock filing issued Friday. Well stimulation through acid wash was also planned at the well and the true potential of the well shall be known after the conclusion of acid stimulation job, he said. Production from the well shall start after the completion of pipeline to the production facility. DST is a procedure for isolating and testing the surrounding geological formations through the drill stem. The test is a measurement of pressure behaviour at the drill stem and is a way to obtain important fluid sampling information and to establish the probability of commercial production. Accordingly, it should be borne in mind that actual production may differ significantly from the test results. The pre-commerciality working interest of POL is 25 percent.

Copyright Business Recorder, 2016

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PEDO IDENTIFIES 29 HYDRO POWER PROJECTS OF $12 BILLION

Pakhtunkhwa Energy Development Organisation (PEDO) is spearheading the power sector initiative of the province of the KP. The province has huge hydro power potential of around 30,000 MW or approximately 70% of national untapped hydro power potential. PEDO is actively working on harnessing this resource for the benefit of the province and country at large. It has already identified a total of 29 hydro power projects with an investment of around US $12.0 billion, a huge amount by any standard. Although it is difficult to arrange these funds in a short span of time, PEDO has embarked on a multi-pronged strategy to implement these projects on fast track basis. It is developing these projects both in the public and private sectors. Work in the public sector is already underway with 8 projects totalling 270 MW at different stages of implementation whereas the private sector initiative has also been launched. A new investor friendly KP Hydro Power Policy 2016 and associated Guidelines have been put in place to attract investment in the sector. The PEDO has advertised 6 solicited (feasibilities completed) sites and 1 semi-raw site (feasibility not done) to private sector (both local & international) for investment. The projects include Naran (Mansehra 188 MW), Ghorband (Shangla 21 MW), Nandihar (Batagram 12 MW), Arkari Gol (Chitral 99 MW), Shigo Kas (Lower Dir 102 MW) and Batakundi (Mansehra 96 MW) with an overall investment amount of approx US $1.5 billion. The semi-raw site Sharmai (Dir 150 MW) entails an approximate project cost of US $0.5 billion. In total, all the 7 projects offered to private sector add up to a capacity of 668 MW and an investment amount of US $2.0 billion. "This is the first time the KP government has taken such a bold initiative and is striving hard to attract private sector investment in the war-torn province. Proposals for pre-qualification stage for 6 solicited sites have been received by PEDO. There has been an overwhelming response from the private sector, submitting 56 proposals which show their confidence in the policies of the government and management of PEDO. This is the first time in the history of the province that investors have taken such keen interest in the hydro power sector and once this investment is materialised, this will be biggest in any sector in the KP. PEDO intends to offer further projects to private sector in the coming months so that maximum power projects have been initiated to rid the province and country of the menace of loadshedding as soon as possible. PEDO has also launched a micro hydel initiative through which it will provide access to energy to rural population of the province. Through this project, it will construct 356 micro hydels in northern districts of KP. These are community based projects and will be handed over to community based organisations (CBOs) for operations and maintenance. These projects will provide cheap and clean source of electricity to almost 350,000 people and currently the government / PEDO is enhancing this to 1000 projects servicing a total population of one million. Moreover, the ADB has also joined hands with PEDO and providing technical assistance and funding to various projects. All these initiatives are steps in the right direction and show the resolve of the provincial government to bring about a positive change in the lives of its people.

Copyright Business Recorder, 2016

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THREE MORE NUCLEAR POWER PLANTS PLANNED

Pakistan has planned three more Nuclear Power Plants at Chashma and Muzaffargarh in addition to the two currently under construction aimed at meeting growing demand of electricity in the country, well informed sources told Business Recorder. Strategic Plans Division / PAEC, sources said, embarked upon a comprehensive program of power generation through Nuclear Power Plants (NPPs). Presently, 3 x NPPs ie K-1, C-1 and C-2 are in operation and generating 730 MW and C-3 and C-4 are going to be operational in 2016 adding another 680 MW to the national grid. Two new NPPs ie K-2 / K-3 are under construction and are likely to be operational in 2020-21, adding 2200 MW to the national grid. The sources said NPPs have been supplied and built by Chinese on EPC (Engineering, Procurement and Construction) basis and little was done indigenously. However, it is now being planned to undertake maximum possible construction work and manufacturing of equipment indigenously. The share of mechanical equipment in a 1100 MW plant is about Rs 200 billion out of which the objective is to manufacture about 10% of the mechanical equipment indigenously and gradually'' increase it to at least 30% which is considered doable. "As, there will be 3-4 NPPs under construction, the yearly work will at least amount to Rs 30-40 billion. This will help save foreign exchange, broaden the base for manufacturing of heavy equipment in the country and gain expertise," the sources continued. SPD already has a nuclear equipment workshop under the name of HMC-3 at Taxila and Peoples Steel Mills (PSM) for manufacturing of alloy steel at Manghopir, Karachi. These two setups combined with HMC, Taxila can synergies the heavy equipment manufacturing and achieve the goal of manufacturing 30% of mechanical equipment of NPPs. To achieve this gigantic objective of enhancing the quality and quantum of indigenous manufacture of mechanical equipment, SPD conducted a feasibility study, which recommended that HMC, HMC-3 and PSM should function under one top management. On June 8, 2016, the Economic Co-ordination Committee (ECC) approved transfer of HMC to SDP/ PAEC. HMC was established in 1971 in third five-year plan under Government of Pakistan policy to shift emphasis from consumer to producer goods industry in heavy engineering sector. It was designed to produce cement plants, sugar plants, cranes and road rollers, etc, but now can also produce boilers, pressure vessels, storage tanks, conventional machinery, chemical plants and thermal /hydro power plants apart from steel casting, steel ingots, iron casting and non ferrous casting, etc. Presently, HMC despite being a precious national asset, is highly under-utilised as it has an annual turnover of under Rs 3 billion which is by no means a healthy state of affairs. In the last decade, most of the works performed by HMC were for sugar plants however, in the present situation sugar plants related jobs have been substantially reduced. The machinery installed at HMC is obsolete and lacks precision manufacturing. SPD argues that the complex should be refurbished and new machinery installed for which a Balancing, Modernisation Restructuring and Expansion (BMRE) program worth Rs 21.543 billion for upgradation of machinery and Rs 665.83 million for design institute has been approved by the Government; however, funds have not been provided yet. In December 2006, the decision to privatise HMC was not implemented by the Government on the recommendations of SPD. The basic objective of getting the HMC excluded from privatisation list was to prepare it to support SPD in its plans to indigenously manufacture equipment for Balance of Plant (BoP) for NPPs. In March 2008, during the period of interim Government, HMC was placed under the administrative control of SPD by de-linking it from Ministry of industries & Production (Mol&P) for the above cited rationale, however, in September 2008 the decision was reviewed by the then elected Government which decided that the earlier arrangement under which the affairs of HMC were being managed jointly by Ministry of Industries & ''Production and SPD would continue. SPD/PAEC maintains that HMC together with HMC-3 and PSM has great potential to contribute to the indigenous manufacturing of equipment for NPPs as well as in the growth of national economy in the coming years especially in terms of mega projects and upcoming industrialisation in the wake of the China Pakistan Economic Corridor. Additionally, SPD plans to configure HMC in such a manner that maximum mechanical work related to strategic program is done at HMC which would result in a further increase of its turnover. "HMC is a critical industry for the development of mega projects and needs to be put back on track through already approved BMRE. The PC-I already approved can be reviewed and executed in two phases. In phase-I, most essential machinery can be installed which will reduce the requirement of funds from the Government," said Director General SPD. Correction: This is apropos a headline ''Handing over of HEC to SPD/PAEC approved by ECC'' carried by the newspaper yesterday. In this headline, Heavy Mechanical Complex (HMC) was erroneously indicated or described as ''HEC''.

Copyright Business Recorder, 2016

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LNG IMPORT: TALKS INITIATED WITH ENOC, PETRONAS AND ENI

The Ministry of Petroleum has started talks with Emirates National Oil Company (ENOC), Malaysian Petronas and Italian Eni for the imports of Liquefied Natural Gas (LNG), officials said on Tuesday. According to senior officials of the Ministry of Petroleum and Natural Resources, the government is negotiating with Italian oil/gas giant Eni for importing 0.75 million tons of Liquefied Natural Gas (LNG). The Ministry is also talking to Malaysian LNG producer and supplier Petronas which has assured Pakistan of supplying 1.5 million tons of LNG per annum once the company completes an Australian field. "We are also in talks with Dubai's oil firm ENOC to start importing LNG from Oman," the official said and added that efforts are afoot to rid the domestic gas consumers of low gas pressure and gas loadshedding in upcoming winter season. The official said that general industry, textile industry, private housing societies and many other segments of national economy have requested the government to allocate them LNG. Pakistan is currently receiving LNG supplies from two sources, Qatar and Switzerland-based Gunvor. At present, Pakistan is receiving three ships every month from Qatargas, averaging 300 Million Cubic Feet per Day (MMCFD), and one ship from Gunvor, averaging 100 MMCFD. Both sources are providing LNG at 13.37 per cent of Brent oil. "Petronas after Qatargas is the largest LNG supplier and producer with operations across the globe. The company produces a total of 25 million tons of LNG per annum out of which 13 million tons in Malaysia and 12 million tons in other countries including Australia and Canada," the official maintained. As a result of a serious gap between natural gas supply and demand the government of Pakistan planned to take LNG imports to 2.4 Billion Cubic Feet per Day (BCFD) by 2017 for which required infrastructure including LNG terminals are under construction. Pakistan's first LNG terminal with a total capacity to handle 4.5 million tons of LNG per annum was constructed by Engro Pakistan at Port Qasim Karachi in 2015.

Copyright Business Recorder, 2016

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RS 9 BILLION ALLOCATED TO ENERGY SECTOR

Punjab government has allocated Rs 9 billion for energy sector in the FY 2016-17, which included allocation of Rs 4.63 billion for hydel power project under the Renewable Energy Development Sector Investment Programme (REDSIP). During the FY2015-16, Rs 31 billion were allocated in this sector. Major programmes included; the establishment of RLGN Power Project at Bhikki (Rs 15 billion), establishment of coal base power projects (Rs 9 billion), and development of hydel power project under REDSIP Rs 3.5 billion). As the Punjab government has succeeded to attract private investment in energy sector and a number of power projects are started. These projects are scheduled on fast track completion within two to three years and over 8000MW will be added to the national grid by these private sector projects. Therefore, the allocation has been rationalised to Rs 9 billion in public sector development programme for energy sector in the FY 2016-17. The major targets and initiatives for 2016-17 included; completion of REDSIP hydel power generation project at Marala, Pakpattan, Chianwali and Deg outfall and commencement of RNLGN based power project for 1000-1200 megawatt at Bhikki, Sheikhupura, 15-20 megawatt bio mass power project at Faisalabad, energy efficiency and conservation programme, construction of energy resource centre, solar solution for basic health units in Punjab and new initiatives in energy sector including development of local resources for electricity production. Energy is lifeline of an economy and most vital instrument of socio-economic development of a country. Pakistan is facing huge crisis of shortage of electricity and Punjab is not an exception. Punjab government is working along with the federal government with the constitutional framework to deal with all crises. Our priorities are to invest public money optimally to increase the generation capacity, enable and facilitate the private sector to invest in this area, promote the energy conservation culture so that the electricity is provided to all consumers including domestic, industrial and commercial users at the best affordable rates. In conjugation to federal efforts to bridge the current shortfall of electricity and to support tremendously growing future demand, Punjab government has taken multiple initiatives both in public and private sectors to promote and strengthen power industry in the province. We are on a path to make Punjab energy secured area. In addition to public sector spending the provincial energy department has established one window service and fast track and transparent processing to streamline the private investment in the area of energy sector. The provincial government is also working with leading international financial organisations to create energy fund of US $1.5 to 2.0 billion for the development of energy infrastructure. This is going to be a huge step forward contributing to improve the provincial financial indicators and boost the investors' confidence. Energy sector has plagued the economy for many years and hampered it from realising its full potential, stunting not only the growth of economy but also adding to the miseries of citizen and business community. In order to address this crisis, the government has not only initiated energy private sector investment in energy sector. The major energy projects currently ongoing in Punjab include 1180 megawatt Bhikhi power plant at Sheikhupura, 1223 megawatt Baloki power plant in Kasur, 1320 megawatt Qadirabad power plant at Sahiwal and 1230 megawatt Haveli Bahadur Shah Plant at Jhang. The government also achieved a major breakthrough in renewable energy sector when 100 megawatt Quaid-e-Azam Solar Power Plant was commissioned in July 2015. This has invited private sector for investment in renewable energy and keeping in view the potential of investment, government has embarked upon the policy of divestment of Quaid-e-Azam Solar Power Plant.

Copyright Business Recorder, 2016

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FOUR NEW RIGS BEING ACQUIRED TO STEP UP OIL, GAS EXPLORATION

Ministry of Petroleum and Natural Resources has approved a proposal to acquire four new drilling rigs to step up oil and gas exploration activities in the country and achieve self-reliance in the energy sector. "Under the proposal, Rs 415.807 million have been earmarked to acquire four drilling rigs and their accessories for the Geological Survey of Pakistan," official sources in the ministry told APP. Answering a question, they informed that the state-owned Oil and Gas Development Company Limited (OGDCL) had nine own rigs with the capacity to drill up to 5,500 meters deep. "The company-owned rigs' drilling capacity is from 2,500 to 5,500 meters, which are almost 35 to 40 years old," they added. They said Pakistan was facing a huge gap between demand and supply of energy. Currently, the sources said, its total gas production was four billion cubic feet per day (bcfd) against the demand of eight bcfd of gas, and the oil production stood at 10,000 barrels per day, while its requirement was seven to eight times high than the production.

Copyright Associated Press of Pakistan, 2016

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IA FOR RLNG-BASED POWER PROJECTS APPROVED BY PPIB

The Private Power and Infrastructure Board (PPIB) Thursday approved the Implementation Agreement (IA) for RLNG-based power projects in public sector. This is part of the Clean, Affordable and Reliable Energy (CARE) initiative of the government of Pakistan to address the energy shortfall through import of RLNG for power generation. In this respect, three power plants of approximately 3,600 MW are being developed, of which two projects to be located at Balloki and Haveli Bahadur Shah are being processed in the public sector by the federal government while the third one Bhikki is being developed through Punjab government. As per government decision, these public sector projects will be set up under independent companies in order to bring in efficiency and transparency in operations. Accordingly, such projects will be facilitated by PPIB in IPP mode.-PR

Copyright Business Recorder, 2016

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PSO, CERIECO INK FUEL SUPPLY DEAL

Pakistan State Oil (PSO) has signed an agreement with China East Resource Import and Export Corporation (CERIECO) to maintain seamless supply of high speed diesel (HSD) to Thar Mining Project Block II. The deal is of a major significance as it ensures uninterrupted work on the Thar mining project which is part of the China-Pakistan Economic Corridor (CPEC). "The project is also listed among the prioritised projects of the CPEC," said a PSO statement on Thursday. CERIECO is the Engineering Procurement and Construction and Operations & Maintenance contractor of Sindh Engro Coal Mining Co (SECMC). The signing ceremony was recently held here at PSO House. PSO General Manager Consumer Business Raja Imranullah Khan and Project Director CERIECO LiKan signed the agreement. Others present were Director Mining SECMC Abul Fazl Rizvi and PSO officials. The contract is for the entire project period of the EPC stage between CERIECO and SECMC and the O&M contract period between the same parties. Speaking on the occasion, Raja Imranullah Khan said: "PSO, being a responsible and Pakistan's primary oil marketing company, understands the crucial role of smooth fuel supplies play in keeping the country running and progressing", PSO has always strived to ensure smooth fuel supplies in the country so the wheel of industry never stops moving and daily life goes on interrupted, he said. The agreement with CERIECO is yet another testament to PSO's continued commitment to fulfilling the energy needs of Pakistan. -PR

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THREE PLANTS OF 56 MEGAWATTS TO BECOME FUNCTIONAL THIS YEAR: QAISER

Speaker, Khyber Pakhtunkhwa Assembly, Asad Qaiser has said that three energy projects will be completed this year in the province. The projects will collectively generate 56 Megawatt of electricity. He was addressing a seminar regarding China Pakistan Economic Corridor (CPEC) under the auspices of the University of Engineering and Technology (UET) at a local hotel, here on Thursday. Besides, Vice Chancellor, UET, Iftikhar Hussain Shah, Dr Najibullah, Dr Gul Faraz, Engineer Qazi Mohammad Naeem, Professor Abbas Khan, other speakers also addressed the seminar. The Speaker, KP Assembly, said that work on the implementation of energy policy is in full swing in the province and for this purpose all available resources are being utilised. He said that five new energy sector projects would be completed by the end of 2018, which would produce 214 MW of electricity. He further said that 356 micro-hydel power projects would be completed till 2017, which would produce 35 megawatt of electricity. The Speaker said that 5000 families deprived of electricity in Chitral would be provided solar energy while solar energy projects for 100 villages of southern and central districts were also being started. Regarding CPEC, the Speaker said that they have eye on each and everything of the project and would not allowed anyone to usurp the rights of the province in any circumstance. He said that the provincial government would not hurt the feelings of the province in connections with this project and protect the rights of the province and its people in this regard. The Speaker said that no doubt, the project is a fortune changer and it should not be made controversial. However, he said that they were having apprehensions regarding this crucial project. He said that they were having reservations and apprehensions, but they were not interested in point scoring. He said that the federal government has not taken the provincial government into confidence regarding the project and the Chief Minister Pervez Khattak was kept in dark in this regard. He said that the federal government have given them assurance regarding granting the status of expressway to Indus Highway and laying of railway line from Peshawar to Charsadda and Swabi, but the implementation is still awaited.

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'ITALIAN BUSINESSMEN KEEN TO MAKE INVESTMENT IN ENERGY SECTOR'

Pakistani Ambassador to Italy, Nadeem Riaz has said the Italian businessmen are keen to make investment in Pakistan's energy sector besides having joint ventures in other fields. He was speaking at the Lahore Chamber of Commerce and Industry. LCCI former Presidents Tariq Hameed, Mian Misbah-ur-Rehman, Farooq Iftikhar, Mian Muzaffar Ali, Ijaz A Mumtaz, Provincial Secretary Transport Javaid Akbar Bhatti and executive committee members were prominent among those who attended the meeting. The ambassador said there is a huge business potential in the two countries that should be tapped. He urged LCCI to constitute a sector specific business delegation for Italy to explore trade and investment opportunities. The information of delegation should be provided to the Pakistani mission in Italy at least two months before so that B2B meetings could be arranged with their Italian counterparts, he added. He said that there is a vast scope for joint ventures in energy, pharmaceutical, agro infrastructure, automobile, textile and marble sectors. He also stressed the need for signing memoranda of understanding between the top organisations of the two countries. LCCI former president Farooq Iftikhar said that Pakistan and Italy should hold sector-wise study to evolve a comprehensive joint strategy to enhance volume of trade between the two countries. He said that Italy had been very supportive to Pakistan within the EU with special reference to trade-related issues. Pakistan attaches the highest importance to its relations with Italy, he added. Farooq Iftikhar said the climate for foreign investors in Pakistan is so conducive that they could now have 100 percent equity and there are no restrictions on remitting dividend, profits, and fee. Cost of doing business in Pakistan has also decreased owing to low interest rates and availability of cheap labour force, he said. The Italian investors can invest in energy, agro-based industries, construction, mining, textiles and tourism sectors, where Pakistan could contribute and find complimentary areas in design and fashion. Other sectors included IT and telecommunication. He said that Italian businessmen could take advantage from the investment-friendly climate of Pakistan that offered best return on the foreign investment with economic policies providing for legal protection to foreign investment. Despite ups and down and other problems, not a single foreign investor has suffered in Pakistan. It is high time for the Italian investors to come to Pakistan and make investments as the country is fast becoming hub of economic activity in the region, he added. LCCI former president Mian Muzaffar Ali said there is vast scope in the field of dairy products in which Italy enjoys expertise and hence both the countries can make huge profits. Pakistani businessmen should focus on Italy which is a diversified industrial economy with roughly the same total and per capita output as France and the UK. The capitalistic economy remains divided into a developed industrial north and a less developed, welfare dependent agricultural north, he added. He said that Pakistani businessmen should work hand in hand with their Italian counterparts in the fields of tourism, machinery, iron & steel, chemicals, food processing, textiles, motor vehicles, clothing, footwear and ceramics.

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SECOND LNG TERMINAL: PLTL AUTHORISED TO SIGN LSA WITH SUCCESSFUL BIDDER

The Board of Directors (BoDs) of Pakistan LNG Terminals Limited (PLTL) has authorised the company to sign LNG Services Agreement (LSA) with successful bidder to set up Pakistan's second terminal with a capacity to handle 600 Million Cubic Feet per Day MMCFD) of imported LNG. According to official sources, the Board of Directors (BoDs) of PLTL met here to consider award of contract to successful bidder. After detailed deliberation, the board authorised PLTL management to sign LNG Services agreement with the successful bidder. Sources said that after the approval of BoDs of PLTL, now the Petroleum Ministry would move a summary to Economic Co-ordination Committee (ECC) to get approval so that PLTL can sign LSA with successful bidder. As per details Board of Directors of Pakistan LNG Terminals Limited (PLTL) in its meeting held on May 6 approved financial bid submitted by Pakistan GasPort Limited (Consortium) which includes Fauji Oil Terminal and Distribution Company Limited (FOTCO) which offered a levelized (service) charge of $0.4177 per MMBTU for handling of 600 Million Cubic Feet per Day (MMCFD) of LNG at the terminal. The project has to be implemented within 11 months at Port Qasim, Karachi. The government plans to replace oil based power plants with imported gas for efficient use of power plants and producing clean energy. At present, country is facing 2 Billion Cubic Feet per Day (BCFD) gas shortfall due to rising demand whereas local gas production stood at level 4 BCFD for last 10 years. To address the gas shortage the government was working on gas pipeline projects including Turkmenistan-Afghanistan-Pakistan-India (TAPI) and Iran-Pakistan (IP). According to officials the government in collaboration with China is also working to set up LNG terminals at Gwader port with a capacity to handle up to 1.2 BCFD of imported gas. According to sources the other company Akbar Associates, which is contesting for the 2nd LNG terminal and lost the bid, has filed a case in the court. The board was informed on Tuesday that PLTL had sought legal opinion which argued that contract could be awarded to the successful bidder despite that the case was in court. According to legal opinion, court had not barred the company to award contract to successful bidder. Keeping in view of legal opinion, board authorised the company to initial LSA with successful bidder. The four Independent Power Producers (IPPs) including Saif, Halmore, Sapphire and Orient in Punjab were not operating due to lack of strategy regarding fuel supply. However, in case of new power plants, government had formulated a strategy to provide sustainable and credible fuel supply to new power plants in a bid to minimise power outages," official said adding that second LNG terminal was part of sustainable fuel supply strategy. He said that three LNG power plant with 1200 MW generation capacity each were being set up. Petroleum Ministry had given undertaking to Power Ministry to provide 200 mmcfd LNG to each plant. "The new LNG-based power plants are being set up which have 62 percent efficiency rate and if they are operated at average capacity of 55 percent, they would be generating over 4000 MW electricity. Official further said that past governments had allowed Independent Power Producers (IPPs) to operate on diesel and furnace oil which led to higher electricity bills. The furnace or diesel based power plants operate at maximum45 percent generation capacity which means that they do not only generate expensive power but they produce less clean energy," official said adding that Pakistan being a signatory of Paris deal on climate to produce clean energy and these LNG based power plants would help to achieve the targets set in Paris climate deal. Furthermore, LNG based plants would also generate cheaper energy compared to oil based plants, official maintained. Official said that government was working on three pronged strategy which include setting up LNG terminals, LNG based plants and augmenting pipeline network to transport gas. At present, existing gas pipeline network has capacity to transport 400 mmcfd gas. Gas utilities, Sui Southern Gas Company Limited (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) were already working to enhance existing pipeline capacity by laying 42-inch pipelines to gradually increase this capacity to 1,200 mmcfd.

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220 MEGAWATTS RLNG POWER PROJECT: ATLAS GROUP TO INVEST $220 MILLION

Atlas Powergen has been selected through the recently concluded Government International Competitive Bidding (ICB) process for 220MW RLNG based power project with investment of $220 million as part of the government's fast track effort to bring more power into the system based on clean energy. NEPRA has officially declared Atlas Powergen as the winner of the ICB bid while Ministry of Petroleum, in turn, has provided Atlas Powergen with a firm Gas Supply commitment to proceed with the project. In a ceremony to mark the award of the (Engineering Procurement & Construction) EPC contract and the Notice To Proceed (LNTP), Atlas Powergen, a group company of the Atlas Group, signed two agreements with SEPCOIII Electric Power Construction Corp, the renowned Chinese engineering firm. Siemens, the global engineering powerhouse, will supply and install its state of the art gas and steam turbine as the core components of the project. To mark the occasion, Chairman of SEPCOIII, Wang Lujun, personally flew in from China. Saquib Shirazi and Helmut Von Struve participated on behalf of the Atlas Group and Siemens respectively. At the ceremony, the Chairman of SEPCOIII remarked that "The Atlas project is a prestigious project for us as it marks the first new private sector LNG based IPP, which will not only add power to the national grid but also strengthen the growing Pak-China friendship. SEPCOIII is proud to have been selected. Its commitment to Pakistan can be gauged by its work underway at both the 1230MW Havali Bahadar LNG based and the 1,320MW Port Bin Qasim coal fired power projects". Commenting on the signing, Von Struve said, "Siemens is proud to be associated with Atlas Powergen, a subsidiary of one of the leading groups of Pakistan. We are optimistic that this joint Pak-German-China partnership would set new benchmarks in terms of cross border cooperation, optimum efficiency and project completion within the Siemens proven Fast Track Mode to meet the government's tight deadlines." Setup with investment of $220 million, the 220 MW IPP, to be located near the load center at Sheikhupura, was awarded through the recently concluded Government International Competitive Bidding (ICB) process conducted by the Ministry of Water and Power and PPIB as part of the government's fast track effort to add more power to national grid in the short term. The Ministry of Water and Power envisages the LNG based projects as a good compliment to the long term solution of indigenously produced Hydel and Coal projects. Atlas Powergen project is expected to deliver 150MW of electricity from open cycle operations by April 2017 and 220MW by early 2018. The challenging timelines have been agreed with SEPCOIII and Siemens. The initial financing arrangements have been put in place while the work at the Site has already started. The company is expected to apply for the LOS from PPIB in the coming days.-PR

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ADB OFFERS FINANCIAL SUPPORT TO KP IN ENERGY SECTOR

The Asian Development Bank (ADB) has expressed satisfaction over the efforts of provincial government of Khyber Pakhtunkhwa for constructing 356 mini-micro hydel stations in the backward areas wherein people are deprived of the blessing of electricity. The international monitoring institution has shown interest in investing and offer financial support to the KP government in medium ranged energy projects through its Multi tranche Finance Facility (MFF) program. The bank has also started a plan to increase mini-micro hydel stations from 1000 to 1500 in province. These were stated by a delegation of the ADB led by Adnan Tareen, who held a high level meeting with Akbar Ayub Khan, the Chief Executive of Pakhtunkhwa Energy Development Organisation (PEDO) on the subject of expansion of mini-micro hydel stations. The ADB mission briefed by CEO PEDO that the current government has intended to build 356 mini-micro hydel stations in 12 districts of the province under the energy action plan on fast track basis. The construction work is going on rapidly and so far more than 40 power plants have already been built. These power stations are being built through local NGOs in the backward areas wherein local people are deprived of electricity. After completion, these power stations are being handed over to local community to run by themselves. These will be proved as the source of creation of job opportunities and provide loadshedding free environment. The estimated cost of these 356 mini-micro stations is about Rs 5 million and by end of 2017 construction work will be completed. Akbar Ayub further stated that quite recently chairman PTI Imran Khan had inaugurated three mini hydel stations at Batagram District. During the meeting, the ADB delegation offered financial support to the provincial government in these mini-micro hydel stations and medium ranged energy projects. While soon in this regard, ADB will release funds for this program. Bank officials declared a public welfare program achievement of the current government while declaring it a milestone in the development of backward areas of the province.

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ADB OFFERS FINANCIAL SUPPORT TO KP IN ENERGY SECTOR

The Asian Development Bank (ADB) has expressed satisfaction over the efforts of provincial government of Khyber Pakhtunkhwa for constructing 356 mini-micro hydel stations in the backward areas wherein people are deprived of the blessing of electricity. The international monitoring institution has shown interest in investing and offer financial support to the KP government in medium ranged energy projects through its Multi tranche Finance Facility (MFF) program. The bank has also started a plan to increase mini-micro hydel stations from 1000 to 1500 in province. These were stated by a delegation of the ADB led by Adnan Tareen, who held a high level meeting with Akbar Ayub Khan, the Chief Executive of Pakhtunkhwa Energy Development Organisation (PEDO) on the subject of expansion of mini-micro hydel stations. The ADB mission briefed by CEO PEDO that the current government has intended to build 356 mini-micro hydel stations in 12 districts of the province under the energy action plan on fast track basis. The construction work is going on rapidly and so far more than 40 power plants have already been built. These power stations are being built through local NGOs in the backward areas wherein local people are deprived of electricity. After completion, these power stations are being handed over to local community to run by themselves. These will be proved as the source of creation of job opportunities and provide loadshedding free environment. The estimated cost of these 356 mini-micro stations is about Rs 5 million and by end of 2017 construction work will be completed. Akbar Ayub further stated that quite recently chairman PTI Imran Khan had inaugurated three mini hydel stations at Batagram District. During the meeting, the ADB delegation offered financial support to the provincial government in these mini-micro hydel stations and medium ranged energy projects. While soon in this regard, ADB will release funds for this program. Bank officials declared a public welfare program achievement of the current government while declaring it a milestone in the development of backward areas of the province.

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ANNUAL PLAN 2016-17: LNG IMPORTS TO BE RAISED TO 4.5 MILLION TONS PER ANNUM

The government has planned to increase Liquefied Natural Gas (LNG) imports to 4.5 million tons per annum of during 2016-17. According to Annual Plan 2016-17 of Ministry of Planning, Development and Reforms, in order to enhance import capability of the country with regard to LNG, another LNG terminal is being undertaken by Pakistan LNG Terminal Company Limited (PLTCL) established by the government. The bids for 2nd terminal were invited by PLTCL and are under evaluation by the company. To overcome natural gas shortages, the Ministry of Planning, Development and Reforms is undertaking a fast-track LNG services project and has signed 15-year LNG Sale Purchase Agreement (SPA) with Qatar with initial quantities of 2.75 million tons per annum (MTPA) for the first year and 3.75 MTPA by 2017. About the TAPI project, its activities including finalisation of transit fee, gas transport agreement and appointment of EPC contractor would be implemented during 2016-17. The implementation on IP project will be reviewed in consultation with the Iranian counterpart and accordingly a revised implementation framework will be devised. According to the Annual Plan, almost all the sectors received enhanced gas supply particularly compressed natural gas sector (CNG). Another project, that is, Gwadar-Nawabshah LNG Terminal and Pipeline Project envisaging lying of 42" 700-km pipeline along with LNG terminal of 600 MMCFD capacities is under implementation. In this regard Framework Agreement has been signed between the National Energy Administration (NEA), China and Ministry of Petroleum and Natural Resources. To transmit the imported LNG to upcountry, the SSGCL will construct 42" diameter 342-km pipeline from Karachi (Pakland) to Khairpur (Nara) for transporting 1.2 BCF RLNG dedicated to SNGPL. The project is expected to be commissioned by December 2016. Moreover, 4 LPG Air Mix Plants would also be installed. The Gwadar-Nawabshah Natural Gas Pipeline and LNG terminal at Gwadar are being actively pursued to be completed by 2018. According to Annual Plan 2016-17 of Ministry of Planning, Development and Reforms, the domestic production of natural gas was 1.49 trillion cubic feet which is almost as per the target of 1.50 trillion cubic feet. About the crude oil, Annual Plan revealed that the annual production of crude oil was 32.03 million barrels in current fiscal year-2015-16, which is 79 percent of the target of 40.44 million barrels. The Annual Plan further revealed that a total of 116 wells including 52 exploratory and 64 developments are planned to be drilled by the Exploration and Production (E&P) companies. The seven existing OMC''s will construct ten new oil storages at six locations. An amount of Rs 143 million has been allocated in PSDP 2016-17 for the two projects of Geological Survey of Pakistan, (i) Appraisal of Newly Discovered Coal Resources of Badin Coal Field and its adjoining areas of Southern Sindh and (ii) Exploration of Tertiary Coal in Central Salt Range, Punjab. The Sindh Engro Coal Mining Company (SECMC) with their Chinese contactors will continue its mining project of 3.8 million tons per annum capacity for supplying Thar coal to 2x 330 MW power plant at Block-II. About 40 million cubic meters of over burden will be removed. The Khyber Pakhtunkhawa Oil and Gas Company Ltd has planned to execute Basin Studies of Khyber Pakhtunkhawa and Establishment of Khyber Pakhtunkhawa Hydrocarbon Research Centre. About the Thar coal development, the government of Sindh has developed 12 blocks at Thar coal field. The Sindh Engro Coal Mining Company (SECMC) has started mining work to develop an open pit mine at Thar Block-II and about four (04) million cubic meters overburden has been removed. The construction of temporary site facilities has also started by the Chinese contractor. The project being an important component of CPEC has achieved financial close.

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RS 380.4 BILLION ALLOCATED FOR 31 NEW POWER PROJECTS

Federal government has allocated a total of Rs 380.4 billion including Rs 19.3 billion for 31 new development projects for power sector in next Budget-2016-17. According to Budget-2016-17 documents, the government allocated Rs 163.3 billion for 14 on-going Hydel Projects and Rs 197.9 billion for 143 on-going PEPCO projects for next financial year-2014-15. The government allocated Rs 14 billion for construction of Diamer Basha Dam Project(4500 MW) (Land Acquisition), Rs 18.36 billion for Construction of Diamer Basha Dam Project (4500 MW), Rs 42.2 billion for Dasu Hydro Power Project, Rs 61.5 billion for Neelum Jhelum Power Project and Rs 16.5 billion for Tarbela Fourth Extension Hydro Power Project etc. For new schemes, the government allocated Rs 100 million for 1x660 MW Coal Fired Plant Lakhra, Rs 100 million for Up-gradation of 66 kv to 132 kv Grid Station at Head Rajkan, Rs 300million for 132 kv T/L from Golan Gol Project and Grid Station for Provision of Electricity for Area of District Chitral (PESCO), Rs 500 million for Interconnection of Isolated Makran Network at Basim via Neg G/Station from Panjgoor etc. For on-going projects of PEPCO, the government earmarked Rs 19 billion for installation of New Coal Power Plants heaving Capacity 2x660 MW at Jamshoro, Rs 30 billion for 1200-MW based Power Plant Baloki, Rs 30 billion for 1200-MW LNG Based Power Plant Haveli Bahadurshah, Rs 10.7 billion for Inter-Connection Thar Coal Based 1200 MW, Rs 8.2 billion for Transmission for Dispersal Power from Neelam-Jehlum Hydro Power Project, Rs 5.4 billion Evacuation of Power from 1320 MW power Plant at Bin Qasim and Rs 3.5 billion for Evacuation of power from 2160 MW Dasu HPP Stage-I etc.

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ECONOMIC SURVEY: GAS UTILITIES PLAN TO PROVIDE 412,058 NEW CONNECTIONS

The gas utilities have provided 254,870 new connections during July-February 2015-16 and planning to provide an additional 412,058 connections in 2016-17, revealed Economic Survey of Pakistan 2015-16. According to the Survey, Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) provided 254,648 gas connections to domestic, 202 commercial and 20 industrial consumers. The Survey said that in 2017 gas utilities have planned to provide new gas connections to 412,058 consumers adding that gas contributes about 48 percent of the total primary energy supply mix of the country. Pakistan has an extensive gas network of over 11,538 km transmission, 114,982 km distribution and 31,058 services gas pipelines to cater to the requirement of over 7.9 million consumers across the country by providing about 4 Billion Cubic Feet per Day (BCFD) of natural gas. The average natural gas consumption is about 3.39 BCFD including 175 Million Cubic Feet per Day (Mmcfd) volume of regasified liquid natural gas (RLNG) during July 2015 to February 2016. During July 2015 to February 2016, the two gas utility companies laid 116 kilometres gas transmission network, 1,848 km distribution and 679 km services lines and connected 203 villages and towns to gas network. Gas utilities invested Rs 9.96 billion on transmission projects, Rs 8.71 billion on distribution projects and Rs 13.23 billion on other projects bringing total investment to about Rs 31,919 billion during the period under review. Gas utilities plan to invest a total Rs 71.043 billion on different projects in 2017 of which Rs 13.9 billion would be on transmission projects, Rs 32.74 billion on distribution projects and Rs 24.41 billion on other projects. During July-April FY 2016, foreign direct investment in oil and gas exploration registered US $234.8 million compared to US $230.1 million in corresponding period of last year thus posting a growth of 2 percent. According to the Survey in the next couple of years Pakistan is expected to become a mature LNG import market with a few more projects to come online along with natural gas pipeline capacity enhancement projects. The government has planned to establish 2nd LNG terminal which will be built at Port Qasim Karachi, to be operational by around mid- 2017. Bahria Foundation has also applied to OGRA for grant of LNG Terminal construction License. During July-April 2016 a total 4.98 million tons crude oil products were imported compared to 4.81 million tons in the corresponding period last year showing a growth of 3.5 percent, while in terms of value $1.95 billion was imported compared to US $3.59 billion in the comparable period last year showing a decline of 47 percent - a decline attributed to a decline in international oil price.

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ENERGY GENERATION: TWO PERCENT GROWTH ACHIEVED

The Economic Survey 2015-16 unveiled on Thursday claimed that with concrete efforts of the government, two percent growth has been observed in electricity generation in 2015-16 as compared to previous year. The survey says that the China-Pakistan Economic Corridor (CPEC) is expected to add 10,400 MW to the grid by 2018. The project include coal, hydro and wind. It will also significantly change the energy mix, replacing expensive oil and resulting in reduction of the average cost of generation. It is possible to build a power generation capacity that can meet Pakistan''s energy needs in a sustainable manner, the Survey states. During July-March FY 2016, the installed capacity in the PEPCO system remained 23,101MW compared to 23,212MW during the corresponding period last year with hydro 7,027MW, thermal 15,324 MW, and nuclear 750 MW. During this period, electricity generation through thermal remained 45,252GWh compared with 43,611 GWh last year posting a growth of 4 percent while electricity generation through hydel remained 24,544 GWh compared to 23,478 last year showing a growth of 5 per cent. Thus there was an increase of 2 per cent in electricity generation in 2015-16 as compared to 2014-15. The government had allocated an amount of Rs 317.18 billion for the energy sector development projects in 2015 16. There was not only increase in electricity generation by thermal, but also by hydel which suggests that electricity generation plan through cheap resources is moving in the right direction. During July-March FY 2016, electricity import remained 335 Gwh compared to 350 Gwh in corresponding period last year, the reason in decline on account of maintenance and improvement in the infrastructure of the system. The government expects that the import of electricity will maintain the level of 433 GWh as per 2014-15. During FY 2015, 438 MW installed capacity was through renewable resources that helped in electricity generation of 802 Gwh. One critical issue in electricity generation is the inefficient recovery system while the other is transmission and distribution losses. The National Power Policy 2013 is designed to address these issues. Various steps taken in this regard are: Installation of SCADA (Supervisory Control and Data Acquisition) software to optimise transmission and monitor losses. Incentives to private sector to build transmission infrastructure, redesign national grids to minimise line losses and signing of contracts with Discos'' heads to reduce distribution losses have shown significant improvement. There was 93.40 percent recoveries during 2015 (an amount of Rs 51 billion), the highest in past ten years while transmission and distribution losses declined to 18 percent during the said period. One of the most mentionable features in the context of decline in international oil prices is that the cost of generating electricity through thermal was also reduced. The government has transferred the effect to common consumer by reducing fuel price. The Survey further maintained that for sustainable resolution of energy crisis, the government on one side has made some power reforms to supplement investor-friendly and Power Generation Policy 2015 while on the other side it is also promoting private sector participation in the power sector. The Pakistan Atomic Energy Commission (PAEC) has been actively engaged in harnessing nuclear power technology. At present, three nuclear power plants ie Karachi Nuclear Power Plant (KANUPP), Chashma Nuclear Power Plant Unit-I & Unit-2 (C-1 & C-2) with a gross capacity of 755 MW are already operating at Karachi and Chashma (Mianwali), contributing 695 MW to the grid. Chashma Nuclear Power Plant (C-1 & C-2) are operating very well and setting high standards in the power industry. Chashma Nuclear Power Plants Unit-3 & Unit-4 (C-3- & C-4), 340 MW each, is underway and is on schedule. It is expected that C-3 will be operational by July 2016 and C-4 by January 2017. Sixth and seventh nuclear power plants, the Karachi Nuclear Power Unit-2 and Unit-3 (K-2 & K-3) are also under construction. The PAEC is planning to meet 8,800 MW nuclear capacity by 2030, thus the PAEC is actively planning to develop additional sites to install future nuclear power plants. Sites have been identified and acquired throughout the country, which are being investigated for development. Alternative Energy Development Board (AEDB) is the sole representing agency of the federal government that was established with the main objective to facilitate, promote and encourage development of Renewable Energy in Pakistan. The administrative control of AEDB is by Ministry of Water and Power. The government is taking all possible measures to ensure energy security and sustainable development in the country. In its bid to diversify its energy mix, due attention is being given on fast track development of the Alternative / Renewable Energy (ARE) resources in the country. Alternative Energy Development Board (AEDB) has been pursuing the development of Alternative and Renewable Energy (ARE) based power projects through private investors. The following progress has been achieved on development of renewable energy based projects during the 2015-16 so far: One wind power project (M/s Sapphire Wind Power Pvt. Ltd.) of 52.8 MW capacity achieved Commercial Operations Date (COD). Another wind power project (M/s Yunus Energy Ltd.) of 50 MW capacity is undergoing commissioning tests after completion of construction and is expected to be completed by June 2016. One wind power project of 49.5 MW capacity (M/s Sachal Energy Development Pvt. Ltd.) achieved Financial Close and is under construction. One solar project of 100MW capacity (M/s QA Solar Pvt. Ltd) has become operational. Three solar power projects of 100MW capacity each achieved Financial Close and are under construction with completion expected this month. Two bagasse co-generation projects with a cumulative capacity of 92.4 MW became operational. Twenty Seven (27) wind power projects having a cumulative capacity of 1347.4MW are at different stages of development/operation, six wind power projects of 308.2MW cumulative capacity have started commercial operation and are supplying electricity to the National Grid; AEDB is pursuing 28 solar PV power projects of cumulative capacity of approximately 956.52MW On-Grid Solar PV power plants. M/s QA Solar Pvt. Ltd of 100MW is operational. Seventeen solar power projects of 484 MW cumulative capacity have obtained LoIs from AEDB and are at different stages of project development. In order to tap the potential of electricity generation from the sugar mills in Pakistan, the government on recommendations of AEDB announced the Framework for Power Co-Generation 2013 (Baggase/Biomass) in February 2013. NEPRA announced an Upfront Tariff of Rs 10.7291 per kWh (Levelized) for bagasse based co-generation projects under the framework.

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