14TH INTERNATIONAL EXHIBITION FOR THE ENERGY INDUSTRY

Subscribe to POGEE Monthly Energy Newsletter...
ITS FREE!
[ Subscribe Now ]
 

News Headlines for the month of
FEBRUARY 2011

US power sector experts in control of Ministry's reform wing

ISLAMABAD (February 24, 2011) : American power sector experts have reportedly taken over control of power sector reform wing of the Ministry of Water and Power after the World Bank-backed team, led by Deputy Chairman of Planning Commission Dr Nadeem-ul-Haq, failed to implement critical reforms, sources told Business Recorder. USAID has allocated millions of dollars to improve Pakistan's power sector with the objective of minimising losses. Pakistan's electric power distribution companies cost the government and consumers billions of rupees a year in lost energy. USAID is working closely with all the companies to bring their performance to their optimal level. Key activities include audit of distribution companies and the development of performance improvement action plan for each company. Pervez Ashraf, former minister for water and power and his close associates had replaced Tahir Basharat Cheema with Rasool Khan Mehsud as Managing Director of Pakistan Electric Power Company (Pepco) ostensibly due to his failure to implement reforms. However, former minister's critics had ascribed more personal reasons for the ouster. Ehsan Akhtar, Additional Secretary, Ministry of Water and Power, who is also official spokesman, remains unaware of the power sector reforms process. "I am not aware of power sector reforms, and you should contact Shahid Sattar, Energy Advisor to the Ministry," he told this correspondent. Sources said that USAID engaged 6-7 US experts to reform the outdated power sector. These experts have been provided offices in the Ministry of Water and Power by shifting administration wing from A-Block of Pak Secretariat to Shaheed-i-Milat Secretariat. According to USAID, the government of Pakistan (GoP) recently embarked on a dynamic program to address weaknesses in the power sector. USAID is supporting this effort in a number ways including analysing the feasibility of converting oil fuel generating facilities to coal, auditing the capacity and heat rates of thermal power plants, developing business plans and conducting a study of economical use of natural gas. Recently, new Water and Power Secretary Javed Iqbal chaired a meeting on transition and dissolution of Pepco. In the meeting, steps taken so far, time delays, time line for remaining actions and Pepco's own understanding of the transition/dissolution process was deliberated upon in detail. International Monetary Fund, World Bank and Asian Development (ADB) are also urging GoP to reform its power sector. However, progress so far is negligible, excepting the dissolution of Pepco, on paper.

Top

Jinnah Hydropower Project: Completion of work by August directed

LAHORE (February 22, 2011) : Chairman Water and Power Development Authority (Wapda), Shakil Durrani has directed the Chinese contractor Messers Dongfang Electric Corporation to speed up work on Jinnah Hydropower Project, so that it could start generating electricity by August this year. He expressed these views during his visit to Jinnah Hydropower Project. The project is part of least-cost energy generation plan, being executed by Wapda on priority basis to harness indigenous hydropower resource of the country with a view to improve the ratio of hydel electricity in national grid. The chairman Wapda said that it had become more important to complete under construction Jinnah Hydropower Project as early as possible, because the country direly needed electricity to cope with its increasing demand. Besides gearing up construction activities on the other components of the project, the first unit shall be completed by mid August. However, quality of work and safety of the engineers and workers serving on the project be properly taken care of, he directed the contractor. The chairman Wapda assured that Wapda would provide all possible support to the contractor in completing the remaining works of the project. Jinnah Hydropower is being constructed as a run-of-the-river project on the River Indus at Jinnah Barrage in Mianwali district. On its completion, the project will contribute 688 million units (Gwh) of low-cost electricity annually to national grid. Annual benefits of the project are estimated at about Rs 3 billion.

Top

Wind energy project: Qaim says land to be provided in 10 days

KARACHI (February 20, 2011) : Chief Minister Sindh Syed Qaim Ali Shah on Saturday presided a meeting at Chief Minister House regarding installation of 150 megawatts wind power project to be set up by USAID in Thatta district. Sindh Minister for Environment and Alternate Energy Shaikh Muhammad Afzal, Advisor to CM Sindh for Planning and Development Qaisar Bengali, Advisor to CM Sindh for Investment Zubair Motiwala, Senior Energy Planning Advisor, office of Energy Chris Hauson and others attended the meeting. Chief Minister Sindh assured that required land will be provided for the project within ten days. He said the people in coastal areas were facing problems including shortage of electricity and it was the utmost priority of present government to provide basic facilities to them. Qaim Ali Shah said that the coastal belt of Thatta district was rich in wind waves. He assured full support from Government of Sindh as far as allotment of land for the project is concerned. The meeting was informed that the federal government has signed the stand of intentions with USAID whereby wind power plant of 150 megawatt will be established with public private partnership whereas 51 percent share of private investment firm while 49 percent share will be of Government of Pakistan. The project is being implemented with the collaboration of USAID. Sindh government has committed to provide land for the project for which 4 to 5 localities in Jhimpir and Jati talukas of District Thatta have been identified. It was informed that site selection will be completed within ten days while the land will be allotted under a package. The meeting was informed that the financial close will be achieved within 18 months and work on ground will be started within six to nine months.

Top

Indigenous wind energy resources' potential at 350,000 megawatts

ISLAMABAD (February 19, 2011) : Pakistan can generate over 350,000 MW electricity through only wind energy against the country's total demand of about 21,000 MW peak summer, necessitating solid steps to explore the potential. Official sources in Alternative Energy Development Board (AEDB) told APP that the country's has numerous resources to get energy and over 50,000 MW energy could be generated only in Gharo-Keti Bandar corridor where average wind speed is more than seven meter per second. They said the corridor has potential twice of India and other sites in Balochistan, Punjab, and Northern Area which are being identified for power generation. The sources said Pakistan has amongst the world highest and fastest rising urbanisation and electricity is available to only 57 per cent of the population while natural gas to 21 percent. Only 45 percent of rural population have access to grid electricity and there is extreme shortage of electricity and gas leading to load shedding.

Top

Gilani seeks KIA, Kuwait Fund's support to overcome energy crisis

KUWAIT (February 16, 2011) : Prime Minister Yousuf Raza Gilani on Tuesday urged the two Kuwaiti financial giants to help Pakistan overcome it's energy shortage and development of infrastructure through investments in Thar Coal and building of Gwadar Port's facilities. "We have one of the world's largest coal reserves-175 billion tons in Thar. The Kuwait Investment Authority (KIA) should consider investing in mining of that coal and generation of electricity with it," he stressed. The Prime Minister pleaded this during his separate meetings with Acting Director General Kuwait Fund for Arab Economic Development (KFAED) Hesham Ibrahim Al-Waqayan and Acting Managing Director KIA Othman Ibrahim Al-Isa here on the second day of his two-day official visit to the oil-rich Arab state. Gilani who met the Amir of Kuwait Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, also held wide-ranging talks with his Kuwaiti counterpart Sheikh Nasser Al-Mohammad Al-Ahmed Al-Jaber Al-Sabah on Monday to bolster bilateral ties. The Prime Minister offered the top executives of KFAED and KIA to take advantage of the liberal investment regime as well as the investment-friendly incentives in Pakistan. Minister of State for Foreign Affairs Hina Rabbani Khar, Chairman Board of Investment Salim Mandviwala, senior PPP leader Raja Pervaiz Ashraf, Pakistan's Ambassador in Kuwait Iftikhar Aziz and senior officials were also present in the meetings. During his meeting with Chairman KIA, the Prime Minister said, Pakistan is willing to offer Kuwait a portion of land of its strategically located Gwadar port for setting up a terminal for the storage of its strategic oil reserves. "We would also welcome KIA's investment for the development of Gwadar Port facilities and its related infrastructure projects", he added. Gilani also sought the KIA's investment for establishment of cold chain and food grain storage facilities, setting up of agro based industries in horticulture commodities and investment in livestock, dairy and poultry sectors in Pakistan.

Top

Chinese firm to convert 2 KESC units to coal

KARACHI: The Karachi Electric Supply Company (KESC) and the Global Mining Company Limited of China on Friday signed a memorandum of understanding for fuel replacement initiative through conversion of two of the six generation units of Bin Qasim Power Station from furnace oil to coal. According to the KESC, the initiative was aimed at addressing the prevailing fuel crisis. The GMC is part of the China MCC Group, primarily engaged in natural resource development, equipment fabrication, real estate development and provision of related services. The Metallurgical Corporation of China, a 64.2pc subsidiary of the MCC, is publicly listed in Hong Kong and Shanghai. KESC’s owned generation fleet is largely dependent upon provision of gas from the Sui Southern Gas Company Limited which has shown a declining trend over the past few years. The remainder of KESC’s generation fleet is furnace oil fueled which is impacted by increasing fuel prices and dues pertaining to the federal government which puts considerable constraint upon the purchasing power of the KESC. The Karachi Electric Supply Company and the GMC intend to undertake a conversion project of two of the six power generation units of KESC’s Bin Qasim Power Station, each such unit having a capacity of 210 MW, which will result in conversion of these units from furnace oil fueled generation to coal fueled generation through a retrofit or installation of new boilers. The conversion project aims to diversify KESC’s fuel basket and consequently reduce reliance on furnace oil and to increase dependability on coal to generate power, as at present the delivered cost of coal is about $5.5 to 6 per mmbtu as compared to furnace oil which is approximately $13.5 to 14 per mmbtu. The GMC will also undertake the responsibility of providing funding for the project. The KESC and the GMC intend to finalise their negotiations regarding joint development of the conversion project, conducting required studies and obtaining financing of the project in an expeditious manner and shall approach the National Electric Power Regulatory Authority (Nepra) for an appropriate adjustment in KESC tariff structure and to permit a saving sharing mechanism to adequately provide incentive for conversion project for welfare and benefit of KESC consumers. The salient points of this project would be lower capital cost and reduced completion time as compared to those of a green-field coal project. Upon successful completion, this model would be replicated across the remaining oil-based generation of KESC and could prove to be a viable solution for the whole country to address the prevailing energy crisis.

Top

Second wind energy pilot project made operational

ISLAMABAD (February 13, 2011) : The second wind energy pilot project has been made operational by installing indigenized turbine at Daman-i-Koh, the highest point of the Capital in a simple ceremony attended by selected gathering consisting of CEO, Engineering Development Board (EDB), Aitzaz A. Niazi, other senior officials of the Board, team of private TV channel and management of AGECO Firm, says a press release issues by EDB here on Saturday. AGECO has earlier installed successfully first wind energy turbine at F-7 crossing for generating energy by flow of traffic and supply it to traffic signals. The landmark achievement of AGECO was appreciated by CEO, EDB. He pleaded to the government to grant special concessions to pioneer of the wind energy projects in the country. The second wind turbine will generate 2 kw energy and its life is 20 years. Therefore, it is financially viable as it covers its cost in first year of operation. The firm planned to generate enough wind energy for supply of electricity to street lights and traffic signals of the Capital. EDB has taken up their case with the CDA Chairman for meeting their demand of suitable sites. The Firm has also a plan to cover Lahore Rawalpindi motorway for similar projects. A wind energy vertical turbine has been designed by the AGECO Firm which operates at availability of wind in range of 2.1 meters to 7 meters per second against the maximum required range of 3.5 meters per second to generate 1.5 to 2 kw of energy in 24 hours. The locally designed wind energy turbine will cost Rs 200,000 per kw as compared to imported turbine costing Rs 1 million per kw. Aitzaz A Niazi added that EDB has carried out an assessment of existing capabilities of local manufacturers for manufacturing wind turbine component and the potential for future expansion in capacity through transfer of technology. Federal Minister for Industries and Production Mir Hazar Khan Bijarani has lauded the efforts of the management of AGECO Firm for manufacturing indigenized wind energy projects which would help in overcoming energy crisis in the country. The Minister also appreciated the assistance and co-operation of the EDB extended to AGECO Firm in this regard.-PR

Top

TESCO to keep an eye on new industrial connections

PESHAWAR (February 10, 2011) : Chief Executive Officer, Tribal Electricity Supply Company (TESCO), Pervez Khankhel Swati has directed Deputy Manager Operation of the company to keep an eye on sanctioning of new industrial connections in FATA. Addressing a high level meeting of TESCO officers at WAPDA House, Peshawar, he said that all new industrial connections and extension of load must be sanctioned according to the laid down procedures and standing instructions. He directed that proper registers should be maintained at each Operation Division, Manager Operation and CEO office for keeping record of all kinds of applications for extension in load as well as new industrial connections. He said that billing procedure for industrial consumers needed to be streamlined and bring it at par with the billing standards. Pervez Khankhel Swati has directed the Operation Division heads to expedite recovery and achieve the targets set by the Ministry of Water & Power and MD PEPCO. He said that all out efforts were required for the company in order to improve its financial health, which provides financial support to our families despite of its meager financial resources. All managers, deputy managers and assistant managers of the company attended the meeting.

Top

Turkmenistan could help Pakistan overcome energy crisis: envoy

ISLAMABAD (February 09, 2011) : Ambassador of Republic Turkmenistan to Pakistan Sapar Berdiniyazov on Tuesday said his country wants enhanced economic and cultural ties with Pakistan, which is one of the best investment destinations in the region. He said that Turkmenistan could help Pakistan overcome energy crisis, which is hampering growth in the brotherly country. TAPI gas pipeline will be another significant development in the relations between the two countries, he said. "Apart from surplus gas; we also have excess electricity that can be marketed in Pakistan for mutual benefit," he said. Speaking at Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Capital Office Islamabad, Sapar Berdiniyazov said the two countries enjoy cordial, brotherly ties based on the common culture and history. He said we want to expand the co-operation between the two countries in various fields including oil, gas, energy, agriculture, science, technology, infrastructure and education. For the purpose, officials of the Embassy of Turkmenistan plan to visit all important business chambers for interaction with business community, he said. He informed that they would soon be organising series of lectures in Pakistani educational institutions to boost awareness and relations. Raza Khan, Chairman Co-ordination at FPCCI Capital Office said that government and business community of Pakistan attaches great importance to its relations with Turkmenistan and want to further strengthen it, adding that local exporters can explore opportunities in Turkmenistan in the sectors of detergents, leather garments, cloth and pharmaceuticals. FPCCI will try its best to cement economic co-operation and people to people contact, he added. Underlying the need to the pace of economic development and progress, Raza Khan proposed a Joint Business Council with its offices in capital cities of both the countries. He offered the services of FPCCI to Berdiniyazov for interaction with business community of Pakistan. Raza said that the pipeline project should be materialised without further delay to meet growing energy shortages.-PR

Top

AEDB, ADB launch Renewable Energy Guarantee Facility

ISLAMABAD (February 04, 2011) : Alternative Energy Development Board (AEDB) and the Asian Development Bank (ADB) jointly launched a Renewable Energy Guarantee Facility for Pakistan. The facility will provide in aggregate up to $200 million equivalent in guarantees to help mobilise commercial debt from domestic and international lenders needed to finance wind and other Renewable Energy (RE) power plants (Projects) in Pakistan. Such finance would otherwise be too costly or simply not available due to current market concern about 'off-take' risks associated with the power sector in Pakistan. The Facility will speed up the pace of development of RE sector in Pakistan. The Renewable Energy Guarantee Facility will support the Government's Renewable Energy Development Sector Investment Programme being implemented by the AEDB. The Facility will support 'shovel ready' wind and other renewable energy projects operated by independent power producers (IPPs), which should have a cumulative generating capacity of 150MW to 250MW by the end of 2015. Guarantees issued by ADB will help international and local banks make loans to the IPPs for amounts of between $15m and $120m equivalent with tenors of up to 15 years that are denominated in PKR or USD. Each guarantee, however, will be carefully targeted so that it only covers the risk of non-payment by an IPP of scheduled principal and interest under the loan as a result of non-payment by CPPA of amounts due under energy purchase agreements (EPAs) for energy delivered or energy that could have been delivered but was not taken. AEDB will accept Preliminary Applications from RE Project sponsors (or their authorised agents) that have a valid Letter of Intent (LOI) from AEDB, have an IPP site allocation endorsed by AEDB and are expected to meet the eligibility criteria applied by AEDB and ADB. These will be accepted until 30 April 2011.-PR

Top

Improvement in hydel generation

LAHORE (February 03, 2011) : A considerable improvement in hydel generation with the end of canal desilting has reversed the gap between demand and supply of electricity back to 1500MW from 2000MW last week. The hydel generation improved to 3600MW against below 3000MW throughout the canal desilting campaign in the country. According to the Pepco sources, power generation stood at 10913MW against a demand of 12383MW, brining shortfall to 1470MW. Hydel generation remained 3598MW, followed by 1971MW of thermal, 5282MW through IPPs and 62MW through RPPs during last 24 hours. Supply to the KESC remained 720MW.

Top

Renewable energy technologies: one-time exemption of taxes approved by ECC

ISLAMABAD (February 02, 2011) : The Economic Co-ordination Committee (ECC) of the Cabinet which met here on Tuesday with Finance Minister Dr Abdul Hafeez Shaikh in chair approved one-time exemption of taxes on renewable energy technologies. The ECC on a summary of the Ministry of Environment allowed one-time exemption of taxes on renewable energy technologies with a view to making this environment-friendly as well as affordable for general public and commercial purposes. This included withdrawal of 5 percent customs duty, 16 percent sales tax, 2 percent commercial tax, 1 percent regulatory duty and 4 percent income tax on solar PV panels/modules LVD induction lamps. The ECC also approved one-time exemption of customs duty granted under SRO 812(1)/99. An official said that a proposal by the Ministry of Commerce sought permission for import of 40-seater buses. To attract new investment in the auto manufacturing, the Ministry of Industries had proposed reduction in the existing import duty of 32.5 percent on the Complete-Knocked-Down (CKD) kits for the new investors to 5 percent in first year, 10 percent for second year and 20 percent for third year. The request stated that this incentive would help attract new investors - Chinese, Korean and Europeans - to assemble up to 100,000 units per annum in the country. However, the Ministry of Commerce proposed that the components and CKD kits not manufactured locally should be taxed 50 percent of the existing rate of 32.5 percent of ad-valorem custom duty and for those manufactured locally at 50 percent of the prevailing rate of 50 percent of ad val custom duty. The Ministry of Commerce summary related to depreciation was not taken up. According to a statement, the meeting discussed the agenda in detail and decided: direct tendering for urea import of .225million tons and the Chairman Trading Corporation informed the committee that they are going to tender for the supply of 1 lakh tons from the open market on March 7. The ECC was also informed that at the same time the Economic Affairs Division is engaged in talks with Saudi Arabian Basic Industrial Corporation (Sabic) for the timely supply of urea. A high-level delegation would leave for Saudi Arabia in a day or two to take up the matter with them. Earlier, Federal Minister for Food and Agriculture, Nazar Mohammad Gondal informed the committee about the urgent requirement of urea for the Rabi crop. He said the prices of urea are escalating in the open market due to its shortage and if the demand-supply issue was not resolved before the sowing of the crop, it will have negative impact on the overall Rabi crop and the economy. The committee asked the Federal Ministers for Industries and Production, Food and Agriculture, Finance Secretary and Commerce Secretary to jointly monitor the timely arrival of the consignment to Pakistani ports and onwards distribution to farmers and utilisation of the 48,000 tons of urea stocked with TCP for the coming crops. The committee also approved allocation of 7-10 mmcfd gas to Quetta Thermal Power Station, which was requested by the Ministry of Water and Power. The ministry of industries and production has requested the ECC of the Cabinet to issue explicit directives to the Federal Board of Revenue for allowing Swede Bus Company Limited (SBPL) to sell the subject buses without surrendering the exemption from customs duty granted under SRO 812 (1)/99 dated 01.7.1999, to facilitate release/sale of the buses parked at SBPL depot since 2005. It may be recalled that SBPL had imported 32 Scania buses with Euro-II engines in 2003 for plying in Karachi under the Prime Minister's Urban Transport Strategy Plan, 1999 under SRO 812(1)/99 dated 01-7-1999, which provided exemption from custom duty.

Top

Second Turkish power ship: minister directs Pepco to complete connectivity in two weeks

ISLAMABAD (February 02, 2011) : The Ministry of Water and Power has directed Pakistan Electric Power Company (Pepco) to complete the procedural connectivity requirements for power generation from Turkish power ship within two weeks. This was stated by the Minister for Water and Power, Pervez Ashraf, during his meeting with a Turkish delegation of Karkey Karadeniz power ship along with Turkish Ambassador. Ashraf, who has been severely criticised for failing to reduce load shedding for third year running, said that the power ship would not only provide stable power supply to Karachi but would also save fuel transport cost, and eliminate transmission losses. He assured the Turkish investors that the government would facilitate the investors in all respects and would protect their investment. The Turkish Ambassador said that the Turkish President, the government and its people are eagerly waiting for supply of electricity from the ship to the people of Karachi. Earlier, the Director of Karkey Karadeniz power ship, Nuray ATACIK briefed the Minister on the project and current status and said that the additional capacity would be instrumental to meet the needs of industrial sector and manufacturing units of Karachi in case of any shortfall in the coming summer. The first power ship of 220 MW had arrived in Karachi on November 17, 2010, and the second power ship, Alican Bey, of 110 MW has also reached Karachi that would ensure additional capacity to the project, under 'Power of Friendship, Power of Brotherhood' project and in demonstration of solidarity of Turkish investors with their brethren in Pakistan. Karkey has dedicated an impressive installed capacity of 330 MW to Pakistan out of its world-wide fleet of power ships. The interconnection between Karkey and Karachi has been commissioned while the Alican Bey is being connected. Karkey has completed its test-generation. Karkey power ship rental project is expected to allow the government of Pakistan to save up to Rs 6 billion a year (saving on fuel transport cost and elimination of transmission losses) as providing additional secure generation capacity to Karachi and subsequently to the rest of the country.

Top

1,150 megawatts additional power generation likely by summer

LAHORE (February 02, 2011) : Pakistan Electric Power Company (Pepco) Director General (Energy Management and Conservation) Engineer Muhammad Khalid said Tuesday that 1,150MW electricity would be added to the national grid with the commissioning of the five new power plants by summer. He was giving a weekly briefing to media at the Wapda House. The Pepco DG said that three power plants of 225MW each including Liberty Tech, Hubb at Narowal and Helmor at Bhikkhi, and Foundation of 175MW and Chashma Nuclear Power Plant-II of 300MW would be generating electricity by summer this year. According to him, the hydel power generation was improving as outflow and water indents at Tarbela and Mangla Dams have increased with the re-opening of canals after de-silting. However, the two canals, which were to be opened on January 31, would now be opened on February 5, he said. DG Pepco further said that the electric supply was being suspended for three to five hours to urban centres, while rural areas had to face an eight-hour loadshedding during the last 24 hours. The Pepco, he explained, was facing a shortfall of 575MW due to suspension of gas supply for three months (December to February). During the last six months (July to December 2010), he said, the Pepco provided 328,063 connections including 291,203 domestic, 26,180 commercial, 4,058 industrial, 6,484 tube-well and 138 miscellaneous. He said total power generation during the last 24 hours was 11,102MW against the demand of 12,582MW, showing a shortfall of 1,480MW, while the Pepco supplied 690MW to Karachi Electric Supply Company (KESC). The hydel components contributed 3,877MW, thermal 1,906MW, IPPs 5,257MW and RPPs 62MW, he maintained.

Top

Netherlands delegation visits KSE

KARACHI (February 02, 2011) : A delegation from the Embassy of Kingdom of Netherlands in Pakistan met the senior management of Karachi Stock Exchange. The delegation, led by Deputy Head of Mission, David Kuijper, was accompanied by Peter A Felix, Commercial Officer. On the occasion, Haroon Askari, Acting Managing/ Director KSE presented a brief overview of Pakistan's economy and highlighted the efforts made by KSE management for the development of capital market and seeking new listing at KSE. Kuijper appreciated efforts of KSE management and applauded Haroon Askari's specific contribution for the development of capital market and its positive effect on the economy of Pakistan. He agreed to enhance co-operation between the KSE and Amsterdam stock exchange for taking the relationship to the next level.-PR

Top

Two power transformers installed at Shahpur, Piplan grid stations

FAISALABAD (February 01, 2011) : Grid Station Construction (GSC) directorate of Fesco has installed and commissioned two power transformers of double capacity at 132-KV Shahpur and Piplan grid stations. Sheikh Akhtar Hussain Manager (GSC) said that a power transformer of 10/13 MVA installed at Shahpur Sadar was overloaded. It has been replaced with 20/26 MVA power transformer. Similarly, another power transformer of 10/13 MVA installed at Piplan grid station has also been replaced and commissioned successfully. He said that both of these transformers have been replaced by Fesco staff through its own resource. He said that this replacement would help in ensuring smooth power supply to the concerned consumers in addition to helping administration to issue new domestic, agriculture and industrial connections. Meanwhile, Tariq Mehmood Chattha Chief Executive Officer Fesco has also congratulated the concerned staff of GSC and urged it to work hard to achieve the set targets.

Top

Import of LNG: PBIT holds meeting to overcome gas shortage

LAHORE (February 24, 2011) : With a view to overcome the growing gas shortages, Punjab Board of Investment and Trade (PBIT) has been making full efforts to import Liquefied Natural Gas (LNG) for large industrial consumers. A meeting was held under the chairmanship of Chief Executive Officer PBIT, Saadat Muzzaffar. Business leaders and professionals, delegates of LNG supply companies were also present at the meeting. An overview of the project was presented to the audience and indepth technical issues were also discussed. The meeting created the momentum and optimism among the stakeholders to work together on all the issues to make this initiative a success.

Top

OGDCL to develop five more oil, gas fields: Naeem Malik

ISLAMABAD (February 22, 2011) : There is a considerable increase in oil and gas production, share value, profit of Oil and Gas Development Company Limited and it would further increase with new projects in hand which have been started. OGDCL has increased gas production from its fields to 953 MMCFD in February 2011 from 790 MMCFD in August 2010. The oil production has also been hiked from 33,128 barrels per day to 38,373 barrels per day and LPG from 118 tons per day to 124 metric tons per day after Muhammad Naeem Malik assumed the charge of MD/CEO of the company. OGDCL is pledged to develop five oil and gas fields in a bid to produce about 400 mmcfd natural gas and 500 metric tons of LPG per day to overcome energy shortage and would be able to produce 8000 to 9000 barrels per day oil from these new fields. The company has also started remarkable work on Zin Field which development was being delayed for the last two decades. Zin field had potential of trillion cubic feet gas reserves and the development work on Zin Field will also help to initiate work on four other blocks. OGDCL have completed construction of 35 kilometers road and access to water has also been ensured. The rig is ready to start work on Zin Field. Necessary measures have been taken to start work on those fields which development was delayed due to power full mafia. OGDCL has taken initiatives to develop five fields including Kunnar, Pasakhi Deep (KPD), Sanjaro, Jhal Magsi, Dakhni Expansion And Uch-II Projects. A Gas Sales Agreement (GSA) has also been signed with power producer from Uch-II Gas Field that will produce 160 MMCFD gas per day. OGDCL would produce 280 MMCFD gas and 350 metric tons per day of LPG from KPD and Tando Allahyar Fields. OGDCL would shift its plant of Dhodhak Gas Field to Sanjaro Field and the work will be completed in two phase. In first phase Dehydration Plant and LPG Plant would be installed and Compressors would be set up in next phase for full production. The company has adopted a transparent formula being applied for many decades to award contracts of KPD and Uch-II. Earlier, 20 percent marks were applicable for price bid and 80 percent for technical proposal which were amended to make it more balanced formula by raising price bid mark to 30 percent and reducing technical proposal mark to 70 percent. Many multinational companies including Asian Development Bank (ADB) and World Bank were following this formula in award of contracts. This formula is even approved also by Public Procurement Regulatory Authority (PPRA), there is no possibility to extend any favour to any party through this formula. OGDCL has received more than 12 bids for Uch-II and KPD Projects.-PR

Top

20 percent production boost: German firm offers latest technology to OGDCL, PPL

ISLAMABAD (February 20, 2011) : Germany has offered new technology to Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL) and other exploration companies to enhance minimum 20 percent production of oil and gas from the reservoirs on 50 percent production sharing formula. "German company is ready to give guarantee of minimum 20 percent increase in production from oil and gas reserves," Mehr Muhammad Yousuf Chand Honorary Investment Counsellor Germany and former advisor Prime Minister of Pakistan told Business Recorder. He said OGDCL had recently closed Dhodhak field due to depletion. "Germany has the technology that can still recover oil and gas from Dhodhak field," he said, adding that exploration companies would save 10 million dollars per field by using new technology. He said "German company would provide technology on 50 percent production sharing formula and will seek guarantee from Pakistan not to transfer the technology to any other country. He said companies that implemented the German technology include; Wintershall AG, Germany, Verbundnetz Gas AG, Germany, ESSO Norway, NODECO a/s Norway, SAGA Petolrum a/s, Norway, Philips Petroleum a/s Norway, Repsol Spain; Santos Indonesia and Shell Petroleum Co Brunei. The presentation given to former Petroleum Minister Syed Naveed Qamar reveals that there will be more efficient and profitable recovery of reservoirs as; (i) earlier production start due to reduced construction time (appr. 14 days); (ii) significant higher production rate from the first day on (plus 10-50 percent compared to standard screens); (iii) constantly high production rates, no reduction caused by plugging or erosion and; (iv) raise of the volume that can be profitably recovered from the reservoir (plus 10-30 percent compared to standard screens). The economic advantage will be as; (i) cost reduction during construction period and production process; (ii) reduction of cost during drilling process due to the reduced construction time; (iii) saving of cementation and tubing in the open hold; (iv) significantly reduced maintenance cost if any (during the production period; (v) increased lifetime of the screen due to reduction of erosion and pressure loss and; (vi) reduced necessity of additive usage due to laminar flow. According to presentation, technical advantages stand at; (i) low hydraulic barrier (screen surface instead of perforated cement/tube construction) and reduced turbulence (laminar flow) improve the permeability; (ii) The laminar flow prevents erosion and corrosion and herewith safeguards the functionality and permeability in the long term; (iii) sand production is efficiently prevented by grain arches which are built up around the screen slots; (iv) the reduced friction loss causes a reduced pressure drop which has to be tolerated by the screen construction and; (v) the laminar flow may be combined with auxiliar means (steam, pressure, chemicals) to allow also heavy oil to pass the filter.

Top

OGDCL enhances drilling Programme

ISLAMABAD (February 18, 2011) : Oil & Gas Development Company Limited (OGDCL) marked forty wells on ground and twenty six wells including thirteen exploratory, two appraisal and eleven development wells were spudded during the last financial year. Following the new approach and concepts in prospect generation sustained and aggressive efforts along with the interpreter's high level of expertise and experience, the company managed to drill more than one third of the total wells drilled in the country. OGDCL was joint venture partner in sixteen wells drilled by other operators. OGDCL is also committed to acquire more exploration acreage and to extend its exploration activities overseas wherever a technically and commercially viable potential is identified. OGDCL has its own eight- (8) rigs fleet; rigs are maintained in a professional manner. OGDCL has a full department of up keeping and maintenance of these rigs. There is no frequent break down and technical fault resulting in delays in exploration and development plan. OGDCL maintains a sufficient inventory of equipment and spare parts to take care of the requirement of maintenance of rigs. The main components of rotary rigs are power system, hoisting system, fluid circulating system, rotary system, and wells control system and well monitoring system. All the parts in the above systems are replaced as per requirement; therefore the rigs run efficiently without any impact of age of their rig, many contractors working in Pakistan have the rigs as olds as OGDCL's rigs. OGDCL also hires contract rigs to meet the enhanced targets of exploration and development wells. It is pointed out that many E&P companies in Pakistan have their own rigs and hire contract rigs as per their requirements. The contract rigs are de-hired with out any liability of keeping manpower. OGDCL deployed its own rigs in Mela and Nashpa fields. So far OGDCL has completed two wells in Mela and one well in Nashpa. The drilling activities on two wells are in progress in these two fields. There is significant oil and gas production from these two fields. The production from these fields could be achieved by deploying OGDCL own rigs as contractor rigs refused to work in that area. The subsurface complications in these fields are tremendous due to depth, geological uncertainties and creeping salt formations. These subsurface problems also vary from well to well. The increase in well drilling time is due to subsurface geological complications and drilling about 5000 Meters.-PR

Top

'Government plans to substitute gas for liquid hydrocarbon fuels'

ISLAMABAD (February 18, 2011) : Pakistan spends around $10-12 billion a year on import of crude oil and deficit petroleum products to meet its energy requirements. However, it is working on policies to substitute liquid hydrocarbon fuels with natural gas in a bid a cut down its import bill and to improve the environment. This was stated by Federal Secretary for Environment Khawaja Mohammad Naeem while dressing a workshop on "Globally accepted practices for the promotion of energy conservation and safety standards in different CNG applications" here on Thursday. "Pakistan's energy mix is highly dependent on oil and gas. Government's petroleum policy encourages use of compressed natural gas (CNG) as transport fuel to replace petrol as well as diesel oil, to provide natural gas to thermal power plants using furnace oil and to increase local production and import of liquefied petroleum gas (LPG) to replace kerosene and fuel wood", secretary added, saying that there is need for adopting appropriate measures to improve this situation. Khawaja Muhammad Naeem said that CNG is a highly environment friendly motor fuel for improving air quality. It is lead-free fuel with negligible sulphur and particulate emissions. Carbon monoxide emissions are only one tenth as compared to petrol. It also has much lower carbon dioxide emissions as compared to petrol and diesel. It helps in keeping environment clean pollution free and also in mitigating global warming caused due to greenhouse gas emissions to carbondioxide, he added. Argentinean Ambassador Rodolfo Martin Saravia addressing on the occasion underlined the need for adopting new technologies in energy sector especially in CNG filling stations to avoid emission of hazardous gasses and untoward incidences. Managing Director Enercon Faridullah Khan said that Pakistan is lucky to have a number of natural gas discoveries in the past 2 to 3 years with an output potential of more than 1 billion cubic feet of gas per day within the next 4 to 5 years. The government is encouraging fast-track development of these discoveries through different incentives to bring the additional gas in the national pipeline network. Faridullah Khan said that Federal Government plans to formulate strict and stringent standards for related emissions to keep cities and roads clean for the sake of future generations. With increasing population of CNG stations in the country, we need to have safety parameters in different applications.

Top

POL discovers 16.3mmcfd of gas in Tolanj X-1 well

KARACHI (February 16, 2011) : Pakistan Oilfields Limited (POL) on Tuesday announced to have discovered 16.3mmcfd of gas in Tolanj X-1 well of TAL Block. According to information sent to Karachi Stock Exchange (KSE), in Tal Block hydrocarbons have been encountered in its exploratory well, Tolanj X-1, which is being drilled in Tal Block located in the Khyber Pakhtunkhwa province. The Tolanj X-1 well was spudded on June 21, 2010. In the Lumshiwal Formation, upper 48 metres of the drilled section produced around 16.3mmcfd gas during Barefoot DST at 32/64 inches fixed choke size at flowing wellhead pressure of 2392 psi. The discovery is made in the upper part of Lumshiwal formation and drilling shall be continued to penetrate and test the deeper prospective horizons. The full extent of discovery will be known once the well reaches the planned Total Depth during next two months. MOL Pakistan is operator of the Tal Block. The pre-commercially working interest of Pakistan Oilfields Limited is 25 percent.

Top

Rs 27 billion Thar coal water carrier scheme approved by CDWP

KARACHI (February 06, 2011) : Considering that the most critical infrastructure project is the supply of fresh water to Thar coal fields, the Central Development Working Party (CDWP) at its meeting held in Islamabad on January 21 approved a scheme for Thar coal water carrier at a cost of Rs 27 billion. A spokesman of Coal & Energy Development Department, Government of Sindh, told Business Recorder that to develop Thar coal deposits on large scale basis and to attract foreign direct investment (FDI), fresh water supply to Thar coal fields is essential and is required to be initiated immediately to meet the timelines of the projects on the ground. Total reserves of coal are estimated at 175 billion tons, which could produced 0.1 million mw daily for 300 years. The approval of this scheme will give great confidence to the investors as the governments of Sindh and Pakistan have shown their resolve and commitment towards Thar coal development as a flagship project. Thar coal mining and power generation projects have initial demand of 100 cusecs fresh canal water. To meet this demand, Irrigation and Power Department of the government of Sindh prepared a project for supply of canal water from Nara Canal system. The project envisages construction of a water carrier. The assured water supply for Thar coal power projects proposed constructing open CC lined channel with gravity flow from Farash regulator ex-lower Nara canal to Nabisar through an old waterway of Dhoro escape. Further, the contours are not favourable due to sandy dunes topography of Thar desert up to 350 feet height. Therefore, water will be delivered through pressure pipeline from Nabisar to Islamkot and ultimately extended to Thar coal fields. In this way, sufficient water will be made available to Nara canal system by re-alignment of Nara canal system. Initially, a project, namely 'construction of Makhi Farash link canal (Eastern canal)' was approved and included in Federal PSDP 2008-09. Later on, a revised PC-1 was prepared including lining of Maki Farash link canal. This scheme was enhanced to include Thar coal power requirements after detailed discussions with international water consultants of Thar coal project, funded by World Bank and consultants of Irrigation and Power Department. Additional work was also recommended in the proposed scheme. The enhancement included provision of two storages--one at Nabisar, and the other at Vajihar--besides some other modifications. Both these items, viz construction of Makhi link canal and delivery of water through pipes for Nabisar, were amalgamated in one project, as directed by Thar Coal Energy Board on November 21, 2009. The project is planned to be completed in two years. Total cost of the project (PC-I) prepared for the construction of phase-I is Rs 27.00 billion, which has been approved by CDWP. Secretary, Coal and Energy Development Department, Ajaz Ali Khan, in the Energy Working Group (EWG) meeting had further requested to include the project of laying of transmission network for evacuation of power from Thar coal fields. He informed the meeting that National Transmission and Dispatch Company (NTDC) of Ministry of Water & Power has assigned the work of preparation of feasibility for laying of transmission line to evacuate water from Thar to Canadian company SNC Lavelin, and PC-I would be completed by next month. He explained that NTDC had also progressed on finding partners in China and an MoU has also been signed between NTDC and TBA-Ruba of China. This project is also in mature stage of project financing and inclusion of this project in Joint Energy Working Group (JEWG) meeting next month will expedite this critical aspect of Thar coal project.

Top

Thar coal: trade bodies' help sought to attract investment

KARACHI (February 03, 2011) : Managing Director, Thar Coal and Energy Board, Ajaz Ali Khan has sought the help of trade bodies to highlight Thar coal in their meetings with foreign delegations in order to attract them to invest in Thar coal sector. Speaking at a meeting of Pubic Sector, Utilities, Power and Gas sub-committee of Karachi Chamber of Commerce and Industry (KCCI) on Wednesday, he said that Pakistan coal resource potential is estimated to be around 186 billion tones. Of these resources about 175 billion tones are located in Sindh province at Thar- one of the largest single coal deposit in the world. Thar coal reserves have an estimated potential of generating 100,000 MW of electricity over a period of more then 100 years. He said that this resource provides wonderful opportunity for large-scale mining and power generation over long period of time. He said that the government of Sindh and Pakistan is committed towards provision of an enabling environment that can ensure availability of safety-valves against investment risk, provision of tenure security and evolving an integrated investment risk link of mining with power generation. He said that coal is the only cost effective and sustainable solution of load shedding for Pakistan. He said that several infrastructure development projects are at various stages of implementation including airport at Islamkot, drinking water project, communication, road network etc. To cater for the future requirement of skilled manpower in the upcoming projects of large-scale surface mining and power generation, up gradation of the existing polytechnic institute is being carried out. Replying to a question, he said that the second meeting of Pak-China working group is scheduled to be held in this month at China. President KCCI, Saeed Shafiq said that Pakistan suffers around Rs 288 billion loses due to power crises annually if this amount is used for industrialisation we can have 144 large scale manifesting units, 57 universities and colleges.

Top

Exploration companies to get 40-50 percent higher price: tight gas policy approved by CCI

ISLAMABAD (February 02, 2011) : The Council of Common Interests (CCI) on Tuesday approved in principle Tight Gas Policy that will offer 40 to 50 percent higher price than that of price announced in Exploration and Production Policy 2009 to attract the exploration companies to invest in tight gas fields. The CCI has been informed that the country had a potential of 40 trillion cubic feet gas from tight fields and the recovery rate will be around 12 trillion cubic feet gas. The CCI that met with Prime Minister Yusuf Raza Gilani also decided that provinces would be taken on board while granting licenses to the Exploration and Production companies to recover gas from tight fields. "Conventionally, lease is granted to exploration companies for 30-year period including extension period but in Tight Gas Policy, lease will be granted for 40-year period that includes 10-year extension," sources said, adding that exploration companies will be given 40 percent higher price over and above wellhead price announced in Exploration and Production Policy 2009. "But companies which succeed in recovering gas from tight fields within two years, will be able to get 50 percent higher price," sources maintained. Provinces said that after 18th Amendment, they had 50 percent exploration rights and therefore they should be taken on board while granting licenses to exploration companies for Tight Gas fields. "The Petroleum Ministry has assured to take provinces into confidence while granting exploration rights for the fields in the respective provinces," sources added. According to a statement issued after the meeting, "The CCI met with Prime Minister Yusuf Raza Gilani approved the Tight Gas Policy in principle while it was decided that details of estimation and pricing will be worked out in consultation with the provinces. The CCI was apprised that Tight Gas exploration is much difficult and the technology required is more expensive. The exploration companies do not opt for exploration until given additional incentives. Six new incentives were proposed to attract companies. It was mentioned that even after giving additional incentives the cost of gas available will be less than the gas imported. It is estimated that cost of tight gas will be US $6.5 BTU compared to imported gas ie US $12.3 BTU. The people of the area will be taken into confidence and the development of the area will be part of the policy, the statement said.

Top

EVENT PARTNER
CONFERENCE SPONSOR