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News Headlines for the month of
SEPTEMBER 2010

Wapda initiates number of irrigation dams in Khyber Pakhtunkhwa

LAHORE (September 30 2010): In addition to its on-going schemes, Wapda has also initiated a number of projects including Kurram Tangi Dam, Munda Dam, Chashma Right Bank (lift-cum-gravity) Canal (CRBC) and other medium irrigation dams in Khyber Pakhtunkhwa. Construction of these mega-projects on priority basis will ensure availability of irrigation water, generate low-cost hydel electricity and mitigate floods. This was stated by Wapda Chairman Shakil Durrani in his meetings with Khyber Pakhtunkhwa Governor Owais Ahmed Ghani and the Chief Minister Ameer Haider Khan Hoti in Peshawar on Wednesday. A team of Wapda experts in water and hydropower sectors also accompanied the Chairman during the meetings. The issues pertaining to the on-going as well as the upcoming Wapda projects in Khyber Pakhtunkhwa (KP), especially, the security of the consultants, the contractors and Wapda officials in the project areas, were also discussed in details during the meetings. Khyber Pakhtunkhwa (KP) Governor and the Chief Minister assured Wapda of their support and co-operation in execution of the projects. During the meeting, KP Chief Minister said that the existing Chashma Right Bank Canal was very vital for agriculture in the province, but had been badly damaged during the flood last month. He asked Wapda to repair the canal as soon as possible. The Chief Minister was briefed that the repair work of the canal had already been taken up on priority basis and the breaches in the embankments of the canal would be filled in the shortest possible time. It was told in the meetings that both Munda and Kurram Tangi dams, to be constructed in Mohmand and North Waziristan agencies respectively, would irrigate about 100,000 acres of new land besides supplementing the existing irrigation systems in the two agencies. The projects on their completion will also contribute more than 2.75 billion units of low-cost hydel electricity annually to the National Grid. CRBC (lift-cum-gravity) will also help develop irrigated agriculture of over 286,000 acres from the River Indus, the meetings were further briefed. It is pertinent to mention that the Kurram Tangi Dam Project is ready for construction, while expression of interest (EOI) has been called by Wapda for consulting services for detailed engineering design and preparation of tender documents of Munda Dam Project. The Central Development Working Party (CDWP) has cleared CRBC for the approval of Executive Committee of the National Economic Council (Ecnec). Similarly, Wapda is also conducting studies for detailed engineering design of the three medium irrigation dams namely Bara Dam, Daraban Zam Dam and Tank Zam Dam in Khyber Pakhtunkhwa (KP).

Copyright Business Recorder, 2010

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Kurram Tangi Dam to cost Rs 46 billion, generate 83.4 megawatts power

PESHAWAR (September 30 2010): The Kurram Tangi Dam project would cost Rs 46.213 billion as per revised estimates to generate 83.4MW electricity and boost agriculture in as much as 362,380 acres command area. This was told during a briefing to Governor Owais Ghani at a meeting on the project here at Governor's House on Wednesday. Chairman Wapda Shakil Durrani briefed the Governor on the objectives, salient features and current status with physical progress and issues concerned. Additional Chief Secretary Fata Habibullah Khan, Chief Executive FDA Attaullah Khan, Secretary to Governor Sikandar Qayum, Maqsood Shafiq Qureshi GM Hydro Planning WAPDA, Mr Fazale Mabood GM Projects North Wapda, Mohammad Wali Chief Executive Pesco, Abdul Rashid Gandapur CEO Tesco and Mohammad Naeem Khan GM Technical FDA attended the meeting. The meeting discussed the Kurram Tangi Dam, Gomal Zam Dam and Munda Dam projects, located in Fata and Khyber Pakhtunkhwa and vowed to make every effort for smooth implementation on these projects of vital national interest. The meeting was told that detailed engineering design of the project has been completed and land acquisition is being carried out. The projects will irrigate new areas in Sheratalla, Spaira Ragha and Thal plains, generate cheap and pollution free electricity and improve the socio-economic conditions of the most backward areas of Khyber Pakhtunkhwa and Fata. On the multipurpose Gomal Zam Dam, the meeting was told that 90.16 percent progress had been achieved with regard to dam, hydro power and irrigation component whereas progress on over all completion of the project was 63.70 percent. The project costing Rs 12.829 billion would generate 17.4MW electricity and would benefit 191,139 acre cultivable command area. The meeting was also updated on the proposed Munda Dam Multipurpose project and was informed that the dam when completed would generate worth Rs 19.623 billion annual power benefits, Rs 648 million annual agricultural benefits and Rs 116 million annual flood mitigation benefits. The dam would generate 2407GWh hydro power annually. The meeting identified security environment in the respective areas as the main concern with regard to Gomal Zam and Kurram Tangi dams. Addressing the meeting the Governor Khyber Pakhtunkhwa, Owais Ahmed Ghani assured that this issue would be addressed and added, "We are back on track as regard the security situation and are moving in the right direction that will certainly help remove the impediments in this regard". He also issued directives to the relevant authorities for effective co-ordination with the concerned quarters to ensure foolproof security to these projects.

Copyright Business Recorder, 2010

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Bradford Power wants to set up wind power project

ISLAMABAD (September 28 2010): A foreign consortium company of Canada and China M/s Bradford Power has shown interest to set up a wind power project of 200 MW in Pakistan and estimated investment of $500 million. This was said by Rafid E Louis of the Bradford Power (Pvt) Ltd while talking to the Minister for Water and Power Raja Pervez Ashraf. A delegation of the Bradford called on him here on Monday. Secretary Water and Power, Shahid Rafi and representatives of AEDB and PPIB were also present. Rafid E Louis informed the Minister that the Bradford Power (Pvt) Ltd is a special purpose company established by A-Power, P.R. China and Monteva Holding Inc, Canada for setting up wind power projects in Pakistan as independent power producer and the said project will be completed in two years in Sindh province. The Bradford Power (Pvt) Ltd would also look forward different investment mechanisms in conventional and non-conventional energy resources in Pakistan other than wind like Public Private Partnership, EPC contracting, equipment supplier etc. However, their current focus is wind, for which they have already committed financing and are deploying all their efforts. The minister exclaimed that the experience and expertise of the Bradford Power (Pvt) Ltd in renewable energy sector indicates that they are competent to quickly execute wind power projects. The Minister assured the delegation that they will be assisted at level for realising their planned wind power projects in Pakistan. The Minister added that the Ministry of Water and Power would like to seek benefits from the experience and expertise of the company in other conventional and non-conventional energy resources in Pakistan. Ashraf said that Pakistan has great potential in the power sector and their investment in the wind power project will help to reduce the power tariff for consumers. He said that the government is now focusing on alternative energy projects to utilise the indigenous resources for cheaper energy generation. Earlier, Rafid while giving detailed briefing to the meeting informed that both A-Power and Monteva have EPC experience of installing over 50 power plants including wind and solar power projects in China, Canada and USA. They also have experience of operating and managing wind power projects in different parts of the world. Moreover, they also manufacture wind turbines and solar panels. They are manufacturing wind turbines in China under license of some world renowned wind turbine manufacturers like GE, Nordex etc. They are planning to use their own manufactured wind turbines for their proposed wind power project in Pakistan. -PR

Copyright Business Recorder, 2010

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BoI chief briefs US official about Thar coal conference

ISLAMABAD (September 25 2010): Commercial Counsellor, Embassy of USA, John Simmons called on Minister of State/Chairman, Saleem H. Mandviwalla, on Friday to discuss the assistance and support of commercial counsellor to BoI for improving the investment figures from USA. The chairman BoI informed him about the current projects in energy, oil and gas sector, mining, copper and gold etc with the investment of US companies in Pakistan. He also told him about a conference on Thar coal in Boston in November and asked for John Simmons suggestions to hold a successful forum to attract immediate investment to utilise our valuable resources of coal in Pakistan. Simmons also suggested that to attract immediate investment in the sector Pakistan should seek investment in individual processes from exploration to the power generation. He also advised the chairman to attend the conference in Toronto during March and the chairman added that the volume of investment from Australian companies is not very striking. On the request of John Simmons to support BOI, the chairman called for the capacity building of the employees of BOI and continuous interaction with him. At the end the chairman BOI said that he is seeking effective and better relations with the United States and the officials working in Pakistan. In another meeting with Budnik Andrey ambassador of Russia also called on Mandviwalla to discuss about his upcoming visit of Russia and investment opportunities available in Pakistan. The chairman asked the ambassador's assistance in arranging the meetings with investors from power and oil and gas sectors, adding that they were also pre-planning the visit of President Zardari and the MoUs had already sent to the investors to look into. He said that to establish an effective commission between the two governments took long time but now both the governments are more active and eager to build up strong ties and relations among the two nations. The ambassador expressed on having an extended interaction level between the governments and business communities of both the countries. He also emphasised on having conferences and trade exhibitions, so as to provide enabling environment to showcase the potential of Pakistan to Russian investors. He also referred to Pakistan as one of the most promising area in the region for the local and foreign investors.-PR

Copyright Business Recorder, 2010

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Lotte Pakistan PTA Limited planning to build 40 megawatts power plant

KARACHI (September 24 2010): Lotte Pakistan PTA Limited is planning to build a 40 mega watt (MW) power plant with an estimated cost of $40 million. Asif Saad, CEO of Lotte Pakistan while speaking at the investors conference on Lotte Pakistan PTA arranged by Arif Habib Limited at a local hotel on Thursday said that the power plant project is expected to be completed in 2012. He said that the plant on one hand will reduce the power cost and on the other it will lower the dependency on KESC grid. About the expansion plan, Asif said that the company has been operating consistently close to its nameplate capacity with average capacity utilisation 96 percent. Due to optimum capacity utilisation and healthy demand outlook, the company is considering adding another production line. This project is in the planning and feasibility stage. Lotte Pakistan formerly Pakistan PTA Limited, incorporated in 1997 with principal activity to manufacture and sell PTA. The company started production in June 1998 under the flagship of ICI Group. After the acquisition of ICI by Akzo Nobel in 2008, the company became an Akzo Group's member. In September 2009, the company's 75 percent holding was acquired by KP Chemical, a subsidiary of Lotte Group for $490 million. About the Lotte Group, Asif said that Lotte Group started its business with a confectionery company in South Korea in 1967. The group later on ventured into hospitality and departmental store businesses. Overtime Lotte emerged as a conglomerate with investments in diversified industries like tourism, petrochemicals, construction, manufacturing and financial services. The group has total assets of around $50 billion and exports its products to more than 70 countries around the globe. The company has a production facility located at Port Qasim Karachi with an initial capacity of 400,000 tons per annum, which improved to 506,750 tons per annum after balancing, modernisation and revamping in 2009. The company is the sole PTA manufacturer in Pakistan. The primary application of PTA includes Polyester Staple Fiber (PSF) and Polyethylene Terephthalate (PET). PSF is a man made fibre used as a substitute of cotton in textile industry, so its demand is a function of the cotton price. PET on the other hand, is mainly used in the bottle applications. Current operational PSF and PET capacity requires around 525,000 tons PTA per annum. Bilal Moti, CEO of Arif Habib Limited and Ali Aamir, CFO of Lotte Pakistan also spoke on this occasion. Muhammad Imran, Head of Research of Arif Habib Limited briefed about the company's performance.

Copyright Business Recorder, 2010

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PAEC utilising nuclear technology in fields of agriculture, health and industry

ISLAMABAD (September 24 2010): Chairman Pakistan Atomic Energy Commission (PAEC) Dr Ansar Parvez had urged IAEA to maintain its principle-based role to assist its member states on equitable and non-discriminatory basis in line with the Agency's Mission Statement, realisation of the right of every state to the peaceful applications of nuclear technology, particularly nuclear power generation. Addressing the 54th IAEA General Conference in Vienna, Austria, he said nuclear watchdog is indeed a challenge faced by the IAEA particularly in the wake of a large number of aspirant countries, according to a press release issued on Thursday. Pakistan has established a strong and independent safety and security infrastructure, including the establishment of an independent regulatory authority, the Pakistan Nuclear Regulatory Authority (PNRA), in the year 2000. Pakistan is a party to several international conventions and actively participates in the nuclear safety and security activities and programs of the Agency, including the Nuclear Security Action Plan, he informed the IAEA General Conference. PAEC has been given a mandate by the Government of Pakistan to install 8800MW of nuclear by 2030, he said. "Pakistan faces severe loadshedding, we need to build more nuclear power plants to alleviate the energy shortfall and to support our socio-economic development", he informed. Chairman PAEC said, "We are operating two nuclear power plants, KANUPP and Chashma Nuclear Power Plant C-1". Another nuclear power plant C-2 at Chashma is in the final stages of construction and will be commissioned in 2011. Pakistan now already has to its credit more than 45 years of safe reactor operation experience and a technical and engineering infrastructure to maintain and provide technical support to these plants, he maintained. In addition to nuclear power, he said Pakistan has also focused on applications of ionizing radiation and radioisotopes in the fields of health, agriculture and industry. PAEC currently manages 14 nuclear medical centres across the country. These centers cater to around half a million patients every year-most of them free of cost. Another four centers are under-construction, the PAEC chief stated. Using its research reactor, PAEC indigenously produces most of theradioisotopes required for medical purposes. A Molybdenum production facility has recently been commissioned. This facility will not only meet the requirements of the country's nuclear medical centers and hospitals, but will also have spare capacity for export to other countries, Dr Parvez told. Concluding the address, he said, "I express deep appreciation for the valuable assistance provided by the Agency in the fields of nuclear technology, safety and security.-PR

Copyright Business Recorder, 2010

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World Bank and ADB agree to provide aid to PPIB, says Raja Pervaiz

ISLAMABAD (September 23 2010): Minister for Water and Power Raja Pervaiz Ashraf Wednesday said the World Bank and the Asian Development Bank have agreed to provide financial assistance to PPIB and Water Sector Capacity Building and Advisory Services Project (WCAP) under different projects. In a written reply to a question in the National Assembly, the Minster said that under the ADB's Technical Assistance (TA) Loan, Private Power and Infrastructure Board (PPIB) through various consultants has conducted feasibility studies for two hydropower projects and power projects on small gas fields. He said the ADB would provide $3,500,000 for two hydropower projects namely Shushgai-Zhedoli Project and Shogo-Sin Project. Similarly, US $750,000 for power projects on small gas fields. The minister said the World Bank has agreed to provide financial assistance to the tune of US $5.0 million for preparation of detailed engineering design, tender documents and Planning Commission PC-I of Tarbela 4th extension hydropower projects units (960 MW,). He detailed present status of projects whose feasibility studies were conducted under Asian Development Bank TA loan is Hydropower Projects. He said that Private Power and Infrastructure Board (PPIB) through the consultants carried out feasibility studies of two hydropower projects with a cumulative capacity of 276 MW located in District Chitral of Khyber Pakhtunkhwa under Asian Development Bank TA Loan. These Projects are 144 MW Shushgai -Zhendoli Hydropower Project and 132 MW Shogo- Sin Hydropower Project. Projects on small gas fields, he said that feasibility study has been completed by a joint venture of Socoin Spain and Nespak and four small projects with a cumulative capacity of 46.5 MW have been identified, which are intended to be implemented through private sector. He added that the Asian Development Bank has provided two loans one with the Khyber Pakhtunkhwa and the other with the Government of Punjab for the hydel projects located on Pakhtunkhwa, Ronalla (11.5 MW), Daral Khwar (35 MW) and Machli (3.5 MW).

Copyright Business Recorder, 2010

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China confirms two nuclear reactors for Pakistan

BEIJING (September 22 2010): China on Tuesday gave its firmest government confirmation yet of plans to build two new nuclear reactors for Pakistan, but a Foreign Ministry spokeswoman said she did not know about talks over a bigger reactor deal. The spokeswoman Jiang Yu said China plans to help Pakistan expand its Chashma nuclear energy complex in Punjab by building two reactors in addition to one already operating and another nearing completion. Her comments also suggested Beijing may see no need to seek approval for the two new Chashma reactors from the Nuclear Suppliers Group (NSG), an international council of governments, some of whose members have voiced qualms about the deal. "This project is based on an agreement signed between the two countries in 2003 about co-operation in the nuclear power field," Jiang told a regular news conference, citing plans to build the No 3 and No 4 reactors of about 300 megawatts each at Chashma."China has already notified the International Atomic Energy Agency about the relevant details, and invited the IAEA to exercise safeguards and oversight of this project," said Jiang. Up to now, Chinese government officials have been tight-lipped in public about the planned new units at Chashma, although the Chinese companies picked to build them have announced contract signings. Jiang's statement that the new reactors come under a 2003 agreement may ruffle other countries that have pressed China to seek a waiver for them from the Nuclear Suppliers Group, a 46-member consensus-based body that seeks to ensure nuclear exports are not diverted to non-peaceful purposes. The expansion of China's nuclear power ties with Pakistan has magnified unease in Washington, Delhi and other capitals worried about Pakistan's history of spreading nuclear weapons technology, its domestic instability, and about the potential exceptions created in international non-proliferation rules. BIGGER REACTORS Jiang was also asked about the China National Nuclear Corp's statement on Monday that it is in talks to build a 1-gigawatt nuclear reactor for Pakistan, in addition to the four smaller Chashma units built, being finished or planned. But she had less to say on this. "We don't understand this matter. You can make further inquiries with the company," Jiang said. Pakistan is a long-standing partner of China, and has been suffering chronic power shortages. To receive nuclear exports, nations that are not one of the five officially recognised atomic weapons states must usually place all their nuclear activities under the safeguards of the International Atomic Energy Agency, say NSG rules. When the United States sealed its nuclear agreement with India in 2008, it won a waiver from that rule from the NSG after contentious negotiations in which China raised misgivings. Washington and other governments have said China should at least seek a similar waiver for the planned new reactors in Pakistan. But China now appears positioned to argue that the two new units at Chashma were part of an agreement made before it joined the NSG in 2004, and so do not need another waiver. Beijing stayed quiet about Chashma at an NSG meeting in June and has not publicly sought an exemption.

Copyright Reuters, 2010

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PPIB asks MoP&S to facilitate imported coal power project sponsors

ISLAMABAD (September 21 2010): The Private Power Infrastructure Board (PPIB) has requested the Ministry of Ports and Shipping to facilitate the sponsors of 1200 MW imported coal power project sponsor AES, Pakistan, official sources told Business Recorder. On August 24, 2010, Muhammad Iqbal, Project Director, AES, in a letter to the Managing Director of PPIB said he was writing to highlight the fact that the timely grant of relevant consents from the Ministry of Ports and Shipping are pivotal in keeping the ball rolling. According to him, AES Pakistan has, time and again, tried to initiate the process with the Ministry of Ports and Shipping but has received no response. The PPIB, in a correspondence with Secretary, Ports and Shipping, on April 5, 2010 had stated that "it is an agency working under the auspices of the Ministry of Water and Power, and is mandated to facilitate private sector investors in establishment of private power generation projects". PPIB is presently facilitating a 1200MW imported coal-based power project at Gadani, sponsored by AES Pakistan Pvt Ltd. The project will comprise of a coal jetty for import of coal and a power block of 1200 MW capacity. The National Electric Power Regulatory Authority (Nepra) has already determined the tariff for the project. In the tariff order, Nepra advised the sponsors to "thoroughly investigate the possibilities of changing the design of jetty in such a way that least cost and reliable coal offloading facility is arrived at through transparent competitive process while taking on board PPIB, Pakistan Navy, Pakistan Coast Guard, Ministry of Ports & Shipping and clearance from all relevant departments." PPIB had requested the Ports and Shipping Ministry to extend all possible co-operation and support to the sponsors so as to help them devise the least cost & reliable coal offloading facility for the project. A couple of weeks ago, PPIB had warned the government that AES Pakistan may not take off as the Chinese contractors are reluctant to initiate work due to travel advisory. Project sponsors are finalising the engineering procurement construction (EPC) contract, and the government is expecting only Chinese firms to be interested in EPC work of the project because of environmental considerations associated with coal. Nonetheless, due to travel advisory, issued by the Chinese Embassy, the Chinese contractors are reluctant to visit the site to develop the final EPC proposal, sources added. "As travel advisory may stifle the AES project, PPIB is requesting the government to prepare a proper 'security plan' so that security concerns of the Chinese government are ameliorated, and the Chinese government is persuaded to remove the travel advisory," sources said. AES also submitted a security plan to PPIB, prepared after taking cognisance of the facts on the ground, the experience of other such operations, and sound professional judgment.

Copyright Business Recorder, 2010

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Chinese team calls on managing director Pepco

LAHORE (September 17 2010): Tahir Basharat Cheema Managing Director Pakistan Electric Power Company (Pepco) has said that timely completion of 747 MW Combined Cycle Guddu Power Project is of vital importance and urged both the contractors and Pepco officials to work closely and to cooperate with each other. He made these remarks while talking to a seven member Chinese delegation representing M/s Harbin Power Engineering Company (Pvt) Limited, contractors of this project led by Vice President of the Company Mr Yang Qingli who called on him at Wapda house, on Thursday. The delegation is on a visit to Pakistan to hold talks with Pepco and other departments to kick start the project. Tahir Basharat Cheema assured the Chinese delegation, that Pepco will extend all possible co-operation and share its experience, expertise and information with the Chinese contractors so that the project is completed well in time. Tahir Basharat Cheema said that the energy policy of present government envisages that increase in power generation should be made in tandem with the objective of producing energy at affordable cost. The 747 MW Combined Cycle Guddu Power Project is therefore of great significance, as it is not only one of the biggest thermal projects in the country fuelled by gas, but would also produce affordable energy. Cheema said that one of the causes of the present energy crisis is delay in completion of ongoing power projects. He expressed the confidence that M/s Harbin Power Engineering Company (Pvt) Limited which is one of the three largest Chinese Companies manufacturing power plants, given its experience and expertise would complete the project within the stipulated period of 30 months for the open cycle and 36 months combined cycle, if not earlier. Tahir Basharat said that the key to success is good and professional management of the project. He urged Yang Qingly to hold regular meetings with officials of Pepco and other related departments so that hurdles or delays that may come in the way of the project during its execution are removed well in advance. "This project has to be a success story in Pakistan," he emphasised. Yang Qingly Vice-President of M/s Harbin Power Engineering Company said that 27 years ago his company had installed, one of the initial blocks of the Guddu Power Project, which was the first integrated thermal power project in Pakistan.

Copyright Business Recorder, 2010

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Part of UAE gifted power plant arrives

LAHORE (September 16 2010): The first consignment of a 320 MW dual fuel power plant, gifted by United Arab Emirates (UAE), arrived in Pakistan on Saturday (September 11). Pepco spokesman said the entire plant is scheduled to reach Pakistan, in three phases, by the end of October 2010. The plant comprises 5 frames, each of 16 MW, and 8 frames of 30 MW each. According to him, Late Sheikh Zayed Bin Sultan Al-Nahyan had promised to donate a power plant to help efforts of the government of Pakistan to increase power generation in the country. The power plant has been donated by the UAE government on the request of President of Pakistan The gift by the government of UAE not only fulfils the commitment made by (Late) Sheikh Zayed Bin Sultan Al-Nahyan but also reflects the close and friendly relations between the two brotherly countries. It would be pertinent to state here that a Memorandum of Understanding (MoU) was signed on February 4th 2009 between Pakistan Electric Power Company (Pepco) on behalf of government of Pakistan and Abu Dhabi Water and Electricity Authority (ADWEA) on behalf of UAE government envisaging the commissioning of the 320 MW power plant in Pakistan. This MoU was signed by Pervaiz Ashraf, Minister for Water and Power, and Diab Bin Zayed Al-Nahyan on behalf of the government of UAE. He said Pepco has already taken a decision with the approval of Government of Pakistan that the plant will be installed adjacent to gas turbine station, Nishatabad, Faisalabad, where enough land and necessary infrastructure is already available. General Electric Company (GEC), manufacturers of the power plant, has been approached to install the plant. The plant will start generation after civil works and erection are completed, by the end of 2011. Pepco is also planning to install another 120 MW Combined Cycle Power Plant which will be fuelled by the exhaust of this 320 MW power plant. This would increase efficiency and total generation to 440 MW.

Copyright Business Recorder, 2010

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German economic team due today

ISLAMABAD (September 14 2010): A 21-member German economic delegation is visiting Pakistan from tomorrow (September 14-17). Claus Baron von Fersen, an expert representing German Oil & Gas Industry and Renewable Energy sector is leading the delegation that includes representatives of German business community as well as officials from Federal Ministry of Economics and Technology and Near and Middle East Association (NUMOV). During the visit, German delegation would have meetings with the Karachi Chambers of Commerce and Industry and Pakistan German Business Forum in Karachi. In Islamabad, the delegation would meet representatives of Islamabad Chambers of Commerce and Industry, Officials of Board of Investment and Alternative Energy Development Board. The delegation would visit the Ministry of Commerce. Delegation members would also meet representatives of German companies that are doing business in Pakistan. The visit would provide the German business community an opportunity to explore possibility of enhancing trade and investment ties with companies in Pakistan.

Copyright Associated Press of Pakistan, 2010

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Neelum Jhelum Hydroelectric Project: IDB to give $220 million more

ISLAMABAD (September 08 2010): The Islamic Development Bank (IDB) has reportedly agreed to extend $220 million for 969 MW Neelum Jhelum Hydroelectric Project (NJHEP) in addition to $138 million which has already been leased, official sources told Business Recorder. Sources said that IDB is leasing $138 million for some of the civil work components of the Neelum Jhelum Hydroelectric Project (NJHEP). The Bank has now offered lease financing of $220 million for turbines, generators and associated transformers of the project. A formal request had already been submitted to IDB and Economic Affairs Division (EAD), sources added. An IDB appraisal mission is in Islamabad to discuss modalities of further financing for the project. The mission is also part of the member country power strategy program of the IDB. Sources said that the mission also spent a couple of days in Muzaffarabad (AJK) to get an overview of acquisition process, key issues hindering completion of land acquisition, overview of damage owing to cavitations and pitting for the turbine runner, frequency of change, role of sedimentation, year-wise disbursement schedule of all co-financiers (2010 to project completion for civil works and equipment), status of co-financiers. The delegation will also be given breakdown of investment requirements (2011-15), public sector generation ie plants (Tarbela extension, Diamar Basha, Dasu, Buni, regional inter-connection projects ie Casa-1000 MW and Iran 1000 MW. Initially, Pakistan was expecting a loan amounting to $948 million from China, Saudi Fund for Development and Islamic Development Bank (IDB) which would have been adequate to meet 58 percent of the total cost of the 969MW Neelum-Jhelum Hydropower Project. Pakistan is receiving $448 million from China under Pak-China co-operation in hydel power generation. IDB and Saudi Fund for Development had also committed $300 million and $200 million respectively. The construction contract of the project has already been awarded to a Chinese company and work is in progress. The project cost is Rs 128.4 billion and Pakistan is seeking assistance from different countries to meet the cost of the project, sources added. Sources said the government has also requested Kuwait Fund for Development and Abu Dhabi Fund for Development to provide financing to carry out Neelum-Jhelum Project. The project is located in the vicinity of Muzaffarabad in Azad Jammu and Kashmir. It envisages diversion of water of Neelum River through a tunnel into Jhelum River. The government had also imposed 10 paisa per unit surcharge during last year to be charged to electricity consumers to generate financing for the project. The project would be completed with Chinese assistance in eight years and officials described it as another symbol of Pak-China friendship.

Copyright Business Recorder, 2010

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Marketing Thar coal projects: 'Incentives Package' developed

ISLAMABAD (September 08 2010): In order to market Thar coal projects, a comprehensive incentives package has been developed in consultation with all stakeholders, to be put before the Economic Co-ordination Committee (ECC) of the Cabinet for approval. Sources in the Planning Commission said that in this comprehensive package a 30-year exemption on corporate tax and minimum turnover tax to mine & power plant operators from the date of first sale as available to IPPs has been suggested. Other incentives include customs duties on import of coal mining projects would be allowed at zero percent to reduce the initial capital investment. Exemption on withholding tax to shareholders on dividend for initial has been suggested to improve risk return profile for the initial projects. On procurement of goods and services during project construction and operations to reduce the initial capital investment an exemption for 30 years on withholding tax is proposed. Exemption for 30 years on other levies is proposed, including special excise duty, federal excise duty, WPPF and WWF to reduce initial capital investment. Thar coalfield will be declared as Special Economic Zone (SEZ), and as 'Projects of National Security'. The coal based power projects and coal mining projects in Sindh shall have the same incentives, concessions, protections and security package as available to IPPs developed pursuant to Power Generation Policy 2002 (as amended from time to time). Another incentive is 20 percent Internal Rate of Return (IRR) to firms which achieve Financial Close before December 31, 2015 for power plants based on indigenous coal and an additional half a percentage IRR ie 20.5 percent for firms which achieve financial close by 2014 has been proposed. "These incentives have been approved by the high powered Thar Coal Energy Board (TCEB) and are placed before the Economic Co-ordination Committee (ECC) for final approval after which it will become part of the policy", sources said. Investors, interested only in mining, may apply for a mine lease for coalfields, or they may also opt for investing in integrated coal mining and power generation projects. "Investors may propose to convert coal into gas and market the syngas and by-products in open market, or may develop a forward integrated project on any one or more bye products from gasification project" sources said. The TCEB is established as one stop organisation with Federal and Provincial agencies to facilitate investors and take quick decisions. To determine and install lignite drying systems appropriate for inclusion in future pulverised coal (PC) or integrated gasification combined cycle (IGCC) power generation systems will be developed at the Thar coalfield. Task for preparing feasibility of water conduit 300 cusecs for Thar coalfields has been assigned to I&P Dept (GoS). Pakistan Railway is preparing PC II for shortest rail link from Port Qasim Karachi to Thar coalfield. Similarly, W&S Dept of Sindh has prepared PC-I for heavy duty road from Port Qasim to Thar coalfields. Sources said that MD, NTDC, had intimated in last meeting of TCEB that ADB would be funding a feasibility costing $3.5 million for upgradation of the entire transmission network to cater for evacuation of 10,000MW to be produced from Thar coal. At present, the country has 186.560 billion tons of coal deposit. Punjab has 235 million tons, Balochistan, 217 million tons, KP 90 million tons and Azad Kashmir has 9 million tons.

Copyright Business Recorder, 2010

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US, FoDP investments linked to reforms

ISLAMABAD, Sept 6: The United States and the Friends of Democratic Pakistan (FoDP) have linked their investments in Pakistan’s energy, reconstruction and water sectors to implementation of key reforms to achieve self-sufficiency in the areas in a three-year transition period. According to sources, the government has requested international lenders to provide about $7.7 billion to implement reforms in the public sector over the period, al though total requirement for infrastructure projects in the energy sector and reconstruction of areas affected by the war against terror in the tribal areas and Khyber Pakhtunkhwa has been estimated at $15 billion. Officials said the government had agreed to a set of policy reforms in consultation with the Asian Development Bank. They said US President Barack Obama’s Special Envoy for Afghanistan and Pakistan Richard Holbrooke, who had participated in FoDP deliberations a few weeks ago, had told the authorities that the policy and management reforms were a crucial complement to the investments. “The key to progress will be the government’s commitment to implement badly needed reforms and the commitment of the FoDP to help facilitate both public and private international investments in the energy sector,” Mr Holbrooke was quoted as saying. In the next round of discussions scheduled to be held in October in Brussels, the lenders propose to take up the water sector as the next area of investment through international participation. Officials said about 6,800MW of electricity generation capacity would be added to the system with the $7.7 billion foreign investment. The government has given a commitment to merge various ministries into an energy ministry to ensure integrated policy development, planning and implementation in the sector. It has also pledged to merge the electricity and oil and gas regulators into a single regulator. The government has given an un dertaking to the FoDP to withdraw the subsidy being given to oil refineries and rationalise ex-refinery prices of products, besides a phased introduction and maintenance of cost recovery tariffs. It has envisaged elimination of cross-subsidies from the industrial and commercial sectors to the domestic sector. The step may lead to massive tariff increases for domestic consumers over three years. The government has agreed to rationalise well-head prices through improved indexation with crude oil rates to serve as an incen tive for gas exploration. The reforms agreed to with the FoDP include resolution of circular debt and prevention of its recurrence and implementation of steady investment plans to generate a sustained demand for energy financing. The agreed reforms also suggest standardisation and labelling of electrical appliances according to energy needs and adopting building energy codes. All the measures are required to be spearheaded by a yet-to-be set up body for implementation of energy efficiency laws.

Copyright Dawn, 2010

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KESC raises $280 million for 560 megawatts power plant

ISLAMABAD (September 04 2010): The Karachi Electric Supply Company (KESC) has raised $280 million from International Finance Corporation (IFC), Asian Development Bank (ADB) and local lenders to set up 560 MW Combined Cycle Power Plant (CCPP), Business Recorder has learnt. According to a letter written to the Ministry of Water and Power on August 27, 2010, a copy of which has been sent to the Planning Commission and the Ministry of Petroleum, all three gas turbines for the upcoming CCPP have arrived at the site. "Construction work is now 28 percent complete and the waste water treatment plant has been commissioned," KESC letter said. "We have been successful in raising $280 million in debt for this critical project through IFC, ADB and a syndicate of local lenders," KESC said in the letter, adding that the project is expected to come online, in phases, from July 2011 to March 2012 period. It said that to-date 3 letters of credit (L/Cs) have been posted to the Engineering, Procurement and Construction (EPC) contractor for a combined total of $215 million. The KESC said it has also sought intervention of federal government to resolve the issues of gas supplies for power plants. "Against an official allocation of 276 MMCFD gas, SSGC has reduced KESC's gas supply by over 30 percent and at present, an average of 210 MMCFD gas is being supplied which is still lower than official allocation," KESC said. To resolve the issues, KESC said, it has been trying to sign a Gas Supply Agreement (GSA) with SSGC for some time and is willing to provide a Letter of Credit (L/C) to SSGC. KESC stated that SSGC had shown resistance in providing additional gas to KESC for the upcoming 560 MW CCPP. "In the decision dated July 28, 2008, an additional 100 MMCFD for period of 25 years has already been promised to KESC for the new plant," KESC said in the letter, adding that sufficient gas supply is critical to ensure that 560 MW project comes online in a timely manner with 345 MW power generation expected by mid 2011. KESC has also requested federal government to resolve the liquidity crisis being faced under circular debt, which may hamper its progress on different projects to provide relief to the consumers. "KESC is suffering from severe working capital constraints due to accumulated receivables of Rs 44.4 billion from government of Pakistan, provincial bodies and other sovereign entities including "strategic customers", the letter said, adding that around Rs 30 billion outstanding dues against general public have worsened the situation. KESC has paid Rs 157 billion to NTDC, SSGC, PSO and other IPPs since September 2008. The Government has promised KESC assistance and support in recovery of Rs 5.93 million in loss of revenue due to 4 percent quarterly cap (which was removed by the federal government in September 2008) through a tariff adjustment authorised by National Electric Power Regulatory Authority (Nepra). As on September 2008, this un-recovered cost has increased to Rs 6.75 billion. KESC said that despite clear directives of the government, Nepra refused to adjust KESC's tariff for unrecovered cost owing to the 4 percent quarterly cap. "We have to bear the brunt of this through short term borrowing, exerting significant pressure on our liquidity,"KESC says, adding "we hereby request the government for intervention in this matter at the earliest.

Copyright Business Recorder, 2010

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Thar Coal Gasification Project shelved

ISLAMABAD (September 04 2010): The federal government has shelved 'Thar Coal Gasification Project,' terming it technically unfeasible, which had also sparked controversy between federal and Sindh governments. "The experiences of coal gasification in India as well as China have already failed and therefore it is not technically feasible," Saleem Mandviwalla, Chairman, Board of Investment (BoI), said while talking to Business Recorder. He said that Pakistan is yet at mining stage where coal gasification is not possible this time. Planning Commission, which is not an executing agency, had conceived a pilot project of 'Thar Coal Gasification', which created differences between federal and Sindh governments. Sources said that Sindh government had strongly resisted and warned Planning Commission not to table it again on the agenda of Central Development Working Party (CDWP) of Planning Commission for consideration. They said that after resistance by Sindh government, the Planning Commission had said that the scope of the project had been broadened to include other coal deposit areas of the economy and there was a need to modify the title and scope of the project. Subsequently, the Planning Commission changed the title of the project and renamed it as 'Creation of New Processing Facilities (for handling and purification of Coal Gas (HPCG) produced by underground Coal Gasification in any Coal field in Pakistan'. In the modified PC-1 of the project, it was proposed that the scope of the project would not be limited to district Tharparkar and be broadened to cover coal deposits in other areas so that other coal deposits of Punjab, NWFP, Balochistan, FATA, NA and AJK can be explored. Sindh had also questioned the role of the Planning Commission as executing agency of the project. The project, titled 'Creation of New Processing Facilities (for handling and purification of Coal Gas (HPCG) produced by underground coal gasification' was approved in the CDWP meeting held on April 30, 2009. The aim of the project was to create new processing facility for handling and purification of coal gas produced by underground coal gasification located in Tharparkar Sindh. The proposed modifications in the title and location/scope of the project were approved and PC-1 would be modified accordingly. Total cost of the project is Rs 490.480 million including foreign exchange component of Rs 79.700 million.

Copyright Business Recorder, 2010

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PPL gas output increases due to new discoveries

KARACHI (September 30 2010): The gas production of Pakistan Petroleum Limited (PPL) has increased due to new discoveries and commissioning of processing facilities during FY10. Speaking at the Annual General Meeting (AGM) held here on Wednesday. The Managing Director and CEO of PPL Khalid Rehman said that total gas production increased during the year, mainly due to the successful commissioning of the central processing facility at Manzalai in Tal Block and EWT Processing facility at Adam X-1 in Hala Field, together with additional production from recent discoveries. The meeting was chaired by Hidayatullah Pirzada, Chairman PPL board of directors. Khalid Rehman said that four new discoveries were made during the year in partner-operated blocks, ie Naspha, Tal, Kirthar and Latif blocks. He said that in line with its aggressive exploration targets, PPL took active part in the bidding round held by the government in September 2009. Of the 38 blocks provisionally granted, PPL won 14 new exploration blocks. He pointed out that fast track work programme has been chalked out for the new blocks and exploration activities have already been started in Sirani, Jungshahi and Kotri North to deliver maximum results within three-year time span committed to the government. "A proactive farm-out campaign seeking joint venture partnerships have been rolled out to reduce the company's exposure in the new blocks", he said adding that the farm-out agreements have been executed with various local and international exploration and production companies. He said that the management stands committed to maintaining gas supplies at contractual delivery pressure and flow rates and optimising gas recovery from existing fields and discoveries. The compression facility at Sawan Gas Field was successfully installed and commissioned during the year. In addition, the installation of the Kandhkot Gas Field Compression Station is complete and will be commissioned shortly. He said that the company performed well on the operational front despite the challenges faced during the year that witnessed impact of sharp decline in the average international crude oil price on revenues and profitability. The company's sales revenue of Rs 59.9 billion for the year was lower by 2.6 percent as compared to the previous year. The company's profit after tax declined to Rs 23.3 billion against Rs 27.7 billion mainly attributable to the impact of low international crude oil prices, partially offset by exchange gain impact on gas/oil prices. The company's field expenditure increased by 39 percent during the year mainly due to acquisition of 2D and 3D seismic data in Nushki, Khuzdar, Sirani, Baska, Mamikhel (Tal) and Nashpa blocks and drilling of exploratory wells Shark-1, which were declared unsuccessful and cost of wells charged to profit and loss account. During the year an amount of Rs 26.5 billion was generated from operating activities of the company which was spent mainly for meeting expenditures on capital projects, payment of dividends to shareholders and purchase of investment. At the end of the year, the company had a liquid fund position comprising of cash and cash equivalents amounting to Rs 27.7 billion. At present the company's funds to the tune of Rs 21 billion are tied-up in inter-corporate circular debt. PPL has taken up the matter with relevant authorities for early settlement of the issue. The company announced a final cash dividend on ordinary shares at 50 percent and issue of bonus shares in proportion of two ordinary shares for every 10 ordinary shares held, ie 20 percent. This is in addition to an interim dividend of 40 percent on ordinary shares and 30 percent on convertible preference shares paid in March 2010.

Copyright Business Recorder, 2010

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Oil & gas sector suffered over Rs 11 billion loss from floods: donors informed

ISLAMABAD (September 25 2010): Pakistan has informed international donors that oil and gas sector has faced a loss of over Rs 11 billion due to devastation wreaked by the floods across the country. During the US Agency for International Development (USAID) sponsored donors' Energy Roundtable Discussion' held on September 22, Pakistani officials said that the country's largest refinery, Pak Arab Refinery (Parco), had faced a loss of Rs 1,999 million on account of flood damage to the refinery and the pipeline and the refinery was compelled to be shut down. It, however, resumed operation after flood water receded. Public sector companies in the oil and gas sector faced loss of Rs 10.96 billion whereas private sector companies suffered loss of Rs 189.2 million due to floods. "Public sector companies in gas sector suffered loss of Rs 4.178 billion due to damage to pipeline, stations, equipment and vehicles and Rs 6.783 billion loss in oil sector ," sources said, adding that public sector losses were higher than the private sector. The damage to plants, machinery, pipeline and buildings of LPG bottling facility in Swat also suffered a loss of Rs 10.5 million in private sector. CNG distribution network was damaged and the private sector had to bear the brunt of Rs 49.9 million on account of damage to pipe line, equipment and other assets. In the oil sector, the site offices set up for oil marketing and distribution suffered a loss of Rs 12.5 million. The infrastructure and civil works of some depots and petrol pumps across the country were damaged which caused Rs 2.059 billion loss - Rs 1.957 billion in public and Rs 102 million in private sector. Contamination of oil in bulk storages held by public sector due to flood waters accounted for Rs 2.820 billion loss. Contamination of oil in secondary storages resulted in loss of Rs 20.7 million - Rs 6.4 million in public and Rs 14.3 million in private sector. More than 300 retail outlets of the oil marketing companies (OMCs) were damaged by rains and floods. Sources said that OMCs and dealers were undertaking repair/reconstruction work of those where flood water had receded. Flood waters entered into PSO's Lalpir and Mehmood Kot (JIMCO) depots which remain closed till today. PSO is making efforts to repair these depots which are expected to resume operations by the end of the current month. SNGPL compressor station at Bhong was flooded and was shut down on August 9, 2010 causing a shortfall of 340 MMCFD gas in SNGPL network. The compressor was repaired on August 11, 2010. The shortfall was managed by gas supply curtailment to industrial sector. Sources said that SNGPL had started rehabilitation work on transmission and installations in areas where flood water had started receding. SSGC has also started rehabilitation work on the transmission and distribution network and installations where floodwater had started receding.

Copyright Business Recorder, 2010

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PPL gas output increases due to new discoveries

KARACHI (September 30 2010): The gas production of Pakistan Petroleum Limited (PPL) has increased due to new discoveries and commissioning of processing facilities during FY10. Speaking at the Annual General Meeting (AGM) held here on Wednesday. The Managing Director and CEO of PPL Khalid Rehman said that total gas production increased during the year, mainly due to the successful commissioning of the central processing facility at Manzalai in Tal Block and EWT Processing facility at Adam X-1 in Hala Field, together with additional production from recent discoveries. The meeting was chaired by Hidayatullah Pirzada, Chairman PPL board of directors. Khalid Rehman said that four new discoveries were made during the year in partner-operated blocks, ie Naspha, Tal, Kirthar and Latif blocks. He said that in line with its aggressive exploration targets, PPL took active part in the bidding round held by the government in September 2009. Of the 38 blocks provisionally granted, PPL won 14 new exploration blocks. He pointed out that fast track work programme has been chalked out for the new blocks and exploration activities have already been started in Sirani, Jungshahi and Kotri North to deliver maximum results within three-year time span committed to the government. "A proactive farm-out campaign seeking joint venture partnerships have been rolled out to reduce the company's exposure in the new blocks", he said adding that the farm-out agreements have been executed with various local and international exploration and production companies. He said that the management stands committed to maintaining gas supplies at contractual delivery pressure and flow rates and optimising gas recovery from existing fields and discoveries. The compression facility at Sawan Gas Field was successfully installed and commissioned during the year. In addition, the installation of the Kandhkot Gas Field Compression Station is complete and will be commissioned shortly. He said that the company performed well on the operational front despite the challenges faced during the year that witnessed impact of sharp decline in the average international crude oil price on revenues and profitability. The company's sales revenue of Rs 59.9 billion for the year was lower by 2.6 percent as compared to the previous year. The company's profit after tax declined to Rs 23.3 billion against Rs 27.7 billion mainly attributable to the impact of low international crude oil prices, partially offset by exchange gain impact on gas/oil prices. The company's field expenditure increased by 39 percent during the year mainly due to acquisition of 2D and 3D seismic data in Nushki, Khuzdar, Sirani, Baska, Mamikhel (Tal) and Nashpa blocks and drilling of exploratory wells Shark-1, which were declared unsuccessful and cost of wells charged to profit and loss account. During the year an amount of Rs 26.5 billion was generated from operating activities of the company which was spent mainly for meeting expenditures on capital projects, payment of dividends to shareholders and purchase of investment. At the end of the year, the company had a liquid fund position comprising of cash and cash equivalents amounting to Rs 27.7 billion. At present the company's funds to the tune of Rs 21 billion are tied-up in inter-corporate circular debt. PPL has taken up the matter with relevant authorities for early settlement of the issue. The company announced a final cash dividend on ordinary shares at 50 percent and issue of bonus shares in proportion of two ordinary shares for every 10 ordinary shares held, ie 20 percent. This is in addition to an interim dividend of 40 percent on ordinary shares and 30 percent on convertible preference shares paid in March 2010.

Copyright Business Recorder, 2010

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SSGC continues to implement load management plan

KARACHI (September 22 2010): Three of the major gas fields have reduced their gas supplies to SSGC due to flood and technical reasons. Zamzama Gas Field, which has suffered a brunt of destruction caused by floods in Dadu, has reduced its supply from 240 mmcfd to 190 mmcfd, a shortfall of 50 mmcfd. Two gas fields namely Kadanwari and Badin developed certain technical faults that affected its supply of gas to SSGC. While Kadanwari Gas Field has curtailed its supply from 160 mmcfd to 140 mmcfd, Badin field slashed its supply from 180 mmcfd to 166 mmcfd. The Gas Field in Bhit is providing normal 340 mmcfd without resorting to any curtailment. The cumulative shortfalls from Zamzama, Badin, Kadanwari, therefore, comes to 84 mmcfd. On the other hand, SSGC has curtailed supply of gas to KESC from 200 mmcfd to 140 mmcfd, a shortfall of 60 mmcfd, as part of gas load management plan. To manage the shortfall of 24 mmcfd, SSGC has requested Zamzama Gas Field to increase supply of gas from 190 mmcfd to 210 mmcfd in order to ultimately improve the power outage situation. It is reiterated that despite the fact that KESC's receivables with SSGC has piled up to Rs 21.6 billion, the latter has continued to provide it with gas, simply because the utility does not want to further aggravate the already serious power outage problem in Pakistan's biggest load center Karachi.-PR

Copyright Business Recorder, 2010

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Mari Gas seeks $20 million raise in exploration expenses limit

ISLAMABAD (September 21 2010): Mari Gas Company Limited (MGCL) has urged the Ministry of Petroleum to enhance exploration expenditure limit from current $20 million per annum to $40 million per annum, by deducting it from Gas Development Surcharge (GDS). Sources told Business Recorder that the Ministry of Petroleum had circulated a summary to Ministry of Finance and Planning Commission for comments on the proposal, necessary under Rules of Business. After furnishing comments of concerned ministries, Petroleum Ministry would move a summary to the Economic Co-ordination Committee (ECC) of the Cabinet for formal approval. Sources said that the federal government has been providing 20 million dollars to MGCL for exploration activities for many years to expedite activities by deducting the amount from GDS that is to be given to provinces. "Though the Company's accounts are not audited by Auditor General of Pakistan (AGP), its management has been awarding lucrative ex gratia bonus to its executives under the garb of these exploration expenditures," sources said, adding that such bonus expenditures are also not properly reflected in the accounts of the company. "Transparency in utilising these funds by the company also needs to be ensured by the Ministry of Petroleum," sources said, adding that the Petroleum Ministry should involve the AGP to conduct audit of the money being spent as exploration activities to ensure transparency. MGCL is operating on cost-plus formula wherein all operating costs are allowable as incurred by the company, with a direct negative impact on GDS - a provincial receipt. "Both Ogra and the Ministry of Petroleum need to devise some effective mechanism to stop plundering of the public money," sources said. Ogra has introduced efficiency benchmarks for gas utilities, Sui Southern Gas Company Limited (SSGC) and Sui Northern Gas Pipeline Limited (SNGPL). Sources say that Ogra must impose some efficiency benchmarks for the 20 million dollars earmarked for exploration activities. Recently, Ogra unearthed a scam involving massive unauthorised expenditures for a new head office building by MGCL, which was subsequently disallowed by Ogra and the Ministry of Petroleum.

Copyright Business Recorder, 2010

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TAPI gas pipeline project signed

ISLAMABAD (September 21 2010): Turkmenistan, Afghanistan, Pakistan and India on Monday inked framework of an agreement to construct a gigantic pipeline pumping natural gas to South Asia, a Pakistani official said. The Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, valued at more than $3 billion, has long been discussed by governments and energy companies but instability in Afghanistan has so far made its construction impossible. Turkmenistan, holder of the world's fourth-largest natural gas reserves, is keen to revive plans to build the TAPI pipeline through Afghanistan to the markets of Pakistan and India. The former Soviet state is looking to diversify energy sales from its traditional market, Russia, and is courting investors from the West, China and other Asian countries. "The petroleum ministers of the four countries have initialled the Gas Pipeline Framework Agreement in Ashgabad today," a Pakistani Petroleum Ministry spokesman told Reuters. He said the final agreement would be signed in the next meeting of the four countries after the formal approval of their governments. The ministers also initialled a gas sales and purchase agreement, the final version of which will be signed in December.

Copyright Reuters, 2010

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Patterson calls on Naveed Qamar

ISLAMABAD (September 17 2010): The United States Ambassador to Pakistan Anne W Patterson, called on the Federal Minister for Petroleum and Natural Resources, Syed Naveed Qamar here Thursday. During the meeting, views were exchanged on matters of bilateral interest, mutual co-operation and regional significance with particular emphasis on energy co-operation between US and Pakistan. Syed Naveed Qamar apprised the ambassador of the havoc wreaked by floods in the country and the relief efforts undertaken by the government, in its aftermath, to assuage the suffering of the citizens. He said that thousands of employees of various departments and companies under the Petroleum Ministry such as OGDCL, Parco, PSO and SSGC worked round-the-clock in the flood affected areas to restore suspended oil and gas supplies due to inundated infrastructure and installations as well as to reinforce river embankments.

Copyright Pakistan Press International, 2010

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German economic team due today

ISLAMABAD (September 14 2010): A 21-member German economic delegation is visiting Pakistan from tomorrow (September 14-17). Claus Baron von Fersen, an expert representing German Oil & Gas Industry and Renewable Energy sector is leading the delegation that includes representatives of German business community as well as officials from Federal Ministry of Economics and Technology and Near and Middle East Association (NUMOV). During the visit, German delegation would have meetings with the Karachi Chambers of Commerce and Industry and Pakistan German Business Forum in Karachi. In Islamabad, the delegation would meet representatives of Islamabad Chambers of Commerce and Industry, Officials of Board of Investment and Alternative Energy Development Board. The delegation would visit the Ministry of Commerce. Delegation members would also meet representatives of German companies that are doing business in Pakistan. The visit would provide the German business community an opportunity to explore possibility of enhancing trade and investment ties with companies in Pakistan.

Copyright Business Recorder, 2010

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Qadirpur gas field 'SNGPL, OGDCL complete compressor

ISLAMABAD (September 16 2010): The engineers of Sui Northern Gas Pipeline Limited (SNGPL) and Oil & Gas Development Corporation Limited (OGDCL) through the hard work have reconnected all gas wells, except wells in the Sindh River, after the completion of the installation of ongoing new compressor project initiated for the last one-year and annual maintenance at Qadirpur Gas Field compressor. Syed Naveed Qamar, Federal Minister for Petroleum & Natural Resources informed the media representatives here on Wednesday. Syed Naveed Qamar announced that with this development and in view of the progress made, the notification for gas loadshedding for the industry and the CNG stations have been withdrawn with immediate effect, which would add 250 mmcfd gas supply and by tomorrow Thursday the supply would reach to 350 mmcfd while at the end of the current week the production would be at its full swing. He lauded the untiring efforts of the officials of SNGPL and OGDCL who were extra vigilant at Zamzama field and monitoring the worst situation being developed at Mancher lake due to the recent floods and taking necessary measures to avert any bad situation. The Petroleum Minister indicated that efforts were being made to maintain the regular supply of gas to CNG and other industrial sector and to eliminate the gas loadshedding. There was no change in the gas pipeline project while a four countries two-days Gas Pipeline Steering Committee conference was being held at Ashkabad, Turkmenistan from September 20, 2010 to discuss the matter pertaining to supply of natural gas from newly discovered Usman Gas Field, which was being participated by the Petroleum and Natural Resources Minister's of Pakistan, Turkmenistan, Afghanistan and India. Replying to a question pertaining to PSO's circular debt, Syed Naveed Qamar confirmed that this issue has become grave for the whole energy sector particularly due to financial pressure resulted after the floods, however, efforts were underway to improve the situation.-PR

Copyright Business Recorder, 2010

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Gas exploration: OGDCL to drill 11 wells in Balochistan

ISLAMABAD (September 08 2010): The Oil and Gas Development Company Limited (OGDCL) has planned to drill 11 development wells in Uch Gas field area of Balochistan. Two wells are already being drilled while drilling of planned wells will start during current financial year. Seismic data acquisition work has been planed to delineate a drillable structure at the field. Government of Balochistan and Law Enforcement Agencies (LEAs) have also been contacted to provide security cover to carry out smooth and uninterrupted operation at the wells. The company has completed geological mapping and seismic data acquisition work in Kalchas Block of Balochistan Province. OGDCL has also made preparation to start drilling of an exploratory well in Zin area of District Dera Bugti as well. It has completed geological work in Shan area of Balochistan and seismic data acquisition work will be started soon. Similarly, geological mapping and gravity survey of Shahana Block has been completed and seismic data acquisition is being planned. Samandar Block is another area where geological work has been completed and acquisition of seismic data is expected in next few months by deputing OGDCL's seismic crew. Lakhirud and Jandran West blocks are the newly added blocks to the portfolio of OGDCL's concessions. For the operations, in-house planning is being earned out to execute work commitments according to technical priorities. The company will acquire geological, geophysical data and conduct other preliminary studies prior to commencement of drilling of any exploratory well.

Copyright Associated Press of Pakistan, 2010

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