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News Headlines for the month of
AUGUST 2011

Zardari assures Chinese investors of government''s full support

President Asif Ali Zardari has said that Pakistan was facing difficulties in meeting its energy requirements and the government was focused on building mega hydropower projects to meet energy requirements of the country. The President also directed that procedural formalities concerning Guddu and Uch transmission line projects should be completed in time so that agreement in this regard could be signed in September this year. President Zardari was talking to the delegation of a Chinese leading company dealing in power transmission projects at the Aiwan-e-Sadr on Wednesday. The delegation was headed by Ye Jun, the head of the company, TBEA. He was accompanied by Country representative of TBEA in Pakistan, Zhou Liliang and Chen Qinliang. The Pakistan side included Syed Naveed Qamar, Federal Minister for Water and Power, Secretary General M Salman Faruqui, Secretaries Finance and Economic Affairs divisions, Chairman Wapda Shakeel Durrani, and other senior officials. President Zardari appreciated TBEA's $3.5 billion agreement with Pakistan's National Transmission and Despatch Company and China Development Bank to supply transmission equipment to Pakistan. He also welcomed the company's interest in acquiring Heavy Electrical Complex saying that the greater business ventures of the company in the country would contribute to further strengthening of Pak-China relationship. The President said that the energy sector was one of the most important sectors where Pakistan needed assistance and co-operation of Chinese friends. "We need to revamp existing transmission lines and build new ones for efficient transmission on one hand and to reduce line losses on the other," Zardari said adding that the contribution of TBEA in this regard would be significant. President Zardari reiterated the government's full support and facilitation to the intending investors and businessmen, especially the Chinese investors. He assured that the government would ensure complete security to them. Ye Jun thanked President Zardari for the meeting and assured that TBEA would continue to make its contributions in assisting Pakistan in the energy sector.

Copyright Business Recorder, 2011

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1.5 megawatts power project approved for Gilgit Baltistan

A power project of 1.5 Mega Watt has been approved for upper region of Pareshing Mushke village, Gilgit Baltistan (GB) to meet the increasing energy requirements of the area. Executive Engineer Water & Power Fayyaz Alam while talking to newsmen on Tuesday said the location of Mushke village had been approved by the Planning and Development department and the project would be started by an open tender soon. He said the estimated cost of this project was Rs 20 million and it would take three to four years to complete. Fayyaz Alam said that Assistant Chief Planning & Development department Israr Ahmed had approved the location and asked the competent authorities to further proceed.

Copyright Associated Press of Pakistan, 2011

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4th Tarbela extension project to add 1,410MW power to the grid

The total generating capacity of the Tarbela Hydropower Station will touch 4,888 megawatt mark with the addition of 1,410MW as a result of 4th extension project. Official sources told APP on Sunday that the detailed engineering design, tender documents and PC-1 of the Tarbela 4th Extension Project are in active progress and would be completed by next month and would cost $5.5 million provided by the World Bank. M/S Mott MacDonald (UK) is hired for the detailed engineering design of the project. The sources said that the project would take four years after award of the contract. They said the project would not only generate additional 1,410MW cheap hydropower but also save foreign exchange of $900 million spent on import of one million tons of furnace oil annually for equivalent generation of electricity from thermal resources. The World Bank has also shown interest in financing civil works and generating units of the project during the construction, they said. It is pertinent to mention that Tarbela`s 4th Extension Project is a part of least-cost energy generation plan, being implemented by WAPDA (Water and Power Development Authority) on priority to harness indigenous hydropower resources of the country with a view to improving the ratio of hydro electricity in the national grid.

Copyright Associated Press of Pakistan, 2011

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Power sector: Iranian gas to be supplied to SNGPL and SSGC

The government has decided to supply Iranian gas to Sui Northern Gas Pipelines (SNGPL) and Sui Southern Gas Company (SSGC) with the ratio of 65: 35 respectively, which will be specifically dedicated for the power sector, sources close to Minister for Water and Power told Business Recorder. The Iran-Pakistan (IP) gas pipeline project aims at bringing natural gas from Iran to Pakistan by December 31, 2014. For this purpose, Inter State Gas System Limited (ISGS) signed a 'Gas Sale Purchase Agreement' (GSPA) with National Iranian Oil Company (NIOC) in June, 2009. The GSPA became effective on June 13, 2010 and is binding on the GSPA parties. The ECC, in its meeting on January 8, 2008, decided that ISGC may enter into back to back agreements with SNGPL and SSGC for resale of imported gas from Iran on terms similar to those contained in the Iranian GSPA. In pursuance of this decision, ISGC and SSGC/SNGPL are deliberating to sign respective GSPA. Similarly, the government has also decided that imported gas will be dedicated for power sector. ISGC has given following details of gas to be imported from Iran and requested for allocation of gas to SSGC and SNGPL; (i) gas volume to be imported - 750 mmcfd (25 mmcfd for compressors use);(ii) delivery point- Nawabshah;(iii) delivery pressure-1200 psig, (iv) first gas date - December 31, 2014. First year gas availability will be 35 percent of total volume- second year 65 percent of total volume and third year 100 percent. To evaluate gas requirement of SNGPL and SSGC, a gas demand supply study has been conducted in consultation with both gas utility companies. The constrained average day gas demand -supply excluding imports is projected as follows: On SNGPL system in 2011-12 supply is 2, 110 mmcfd, against demand of 3,326 mmcfd, showing a shortfall of 1,216 mmcfd. In 2012-13- supply will be 2,180 mmcfd, against demand of 3,492 mmcfd, indicating a shortfall of 1,312. In the year 2013-14- supply is expected to be 2,193 mmcfd, against demand of 3,638 mmcfd, depicting shortfall of 1,445 mmcfd. In 2014-15- supply will be around 1,886 mmcfd as compared to demand of 3,558 mmcfd, showing a gap of 1,872 mmcfd. In 2015-16, shortfall will be 2,092 mmcfd as supply will stand at 1,796 mmcfd against demand of 3,888 mmcfd. In 2016-17, supply will be 1,499 mmcfd against demand of 4,015, showing a shortfall of 2,516 mmcfd and supply in 2017-08 will be 1,337 mmcfd against a demand 2,811 mmcfd. On SSGC system in 2011-12, supply-1131 mmcfd-demand- 1411 mmcfd- shortfall- 280 mmcfd. In 2012-13, supply 1,285 mmcfd-demand- 1,485 mmcfd- shortfall-200 mmcfd. In 2013-14, gas supply-1,211 mmcfd-demand-1,536 mmcfd and shortfall- 325 mmcfd. In 2014-15, supply 1,071 mmcfd- demand -1,584 mmcfd- shortfall- 513 mmcfd. In 2015-16, supply will be 897 mmcfd against demand of 1634 mmcfd which implies shortfall will be 737 mmcfd. In 2016-17, supply will stand at 776 mmcfd against demand of 1691 mmcfd depicting shortage of 915 mmcfd. In 2007-08- supply will be 674 mmcfd against demand of 1,753 mmcfd showing a shortfall of 1,079 mmcfd. These projections indicate that in 2014-15, SNGPL system will be facing a shortfall of 1872 mmcfd while SSGC will be facing a shortfall of 513 mmcfd. Even at present, un-met gas demand of the power plants connected with SSGC and SNGPL is more than 700 mmcfd. According to sources, in view of current ratio of gas volume being marketed by SNGPL and SSGC and projected demand on their system, Petroleum Ministry has proposed that Iranian gas should be shared between SNGPL and SSGC with the ratio of 65:35. This implies that 471 mmcfd of gas will be allocated to SNGPL and 254 mmcfd to SSGC system. Sources said that SNGPL and SSGC will supply imported gas only to efficient power plants, to be identified by Ministry of Water and Power after entering into back to back GSPA with the plants management.

Copyright Business Recorder, 2011

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Cooperation in energy sector: Punjab to sign agreements with Chinese company

Punjab government and Chinese State Company-Sinotec-have decided to cooperate in livestock and energy sectors and agreements in this regard will soon be given a final shape. This was decided in a meeting between Punjab Chief Minister Muhammad Shahbaz Sharif and Chinese delegation led by President of Sinotec at a meeting here on Monday. Talking to the delegation, the Chief Minister welcomed the Chinese co-operation in livestock and energy sectors and said that it will add a new chapter to Pak-China friendship. He said that transparency in the execution of development projects is the hallmark of Punjab government and the projects to be executed with the collaboration of the Chinese company in energy and livestock sectors will also be completed expeditiously and in a transparent manner. He said that energy, livestock and dairy farming sectors are of vital importance in the provincial economy and the government is implementing a comprehensive strategy for the uplift of these sectors. He said that co-operation of Chinese company will bring about further improvement in these sectors and Punjab will benefit from Chinese technology and expertise. He said that there are vast opportunities of launching of hydro-power projects in Punjab and sites have been identified at a number of places for this purpose. He said that it is a matter of pleasure that Chinese Company Sinotec has decided to work on hydro-power project at two places and Punjab government will welcome joint ventures in this regard. He said that there is also a vast scope of investment in livestock and dairy farming sectors in the province and Punjab and China can also launch joint ventures in these sectors. He said that Punjab government is promoting public-private partnership for the development of various sectors and the decision of Sinotec to cooperate in livestock and dairy farming sectors is a matter of satisfaction. He said that China is a trusted friend of Pakistan and has played a commendable role in its progress. He said that Pak-China friendship is unswerving and China is such a sincere friend of Pakistan that it will be a matter of honour for Punjab government to launch joint ventures with China. He said that an agreement has been reached with the Chinese company for generation of power from Taunsa Barrage while another agreement has been signed with China's international company NORINCO for mass transit project. He said that an agreement had been signed with Sinotec during his visit to China regarding investment in agriculture, livestock and other sectors which is being given a practical shape with the arrival of Sinotec delegation in Punjab. He said that joint ventures in livestock and energy sectors will be executed expeditiously and he will personally supervise these projects. He said that he will always cherish the hospitality extended to him and his delegation during his visit to China. He said that the progress made by China is a worthy example for Pakistan and Punjab government is interested in benefiting from Chinese expertise in various sectors. He said that working with Chinese companies is resulting in strengthening of bilateral relations between China and Pakistan as well as promotion of bilateral co-operation. He also issued instructions for appointing Chairman Punjab Investment Board Rizwan Ullah Khan as the focal person for giving a final shape to the agreements with Sinotec at the earliest. President of Sinotec, Jin Guang Ming said that Sinotec has decided to cooperate in energy sectors due to transparent policies of Punjab government and the favourable atmosphere for investment in the province and this co-operation is not on commercial basis but a symbol of Pak-China friendship. He said that the company will utilise the profit earned from these projects on further promoting bilateral co-operation with Punjab in various sectors. He said that Pakistan is an agrarian country and has vast fertile lands and there is a wide scope of investment in energy, livestock, agriculture and other sectors. He said that the company will fully benefit from investment opportunities in the province. He said that the company has held fruitful discussions with the concerned authorities regarding investment in hydro-power projects and livestock sectors in the province in the light of which joint ventures will be launched. He said that Lahore is a historical city and the delegation is pleased to see the greenery of the city. Provincial Minister for Education Mian Mujtaba Shuja-ur-Rehman, Chairman Lahore Transport Company Kh. Ahmed Hasaan, Vice-Chairman Punjab Investment Board, Chairman Planning and Development, Secretaries of Finance, Agriculture, Transport, Livestock and Energy departments and concerned officers were present on the occasion. The Chinese delegation also included Project Manager Chen Ji Xuan and Song Shuang Ping.

Copyright Business Recorder, 2011

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Pakistan-China JEWG discuss 12 new hydro power projects

Water and Power Development Authority (Wapda) Chairman Shakeel Durrani says twelve new hydro power projects were discussed in Pakistan-China Joint Energy Group (JEWG) meeting here on August 1-2, 2011. Durrani who was member of Pakistan delegation led by Water and Power Minister Syed Naveed Qamar, said of these projects Wapda has six, three from private sector and three additional in which Chinese can invest or also work as contractors for civil, electrical, mechanical works. "At JEWG meeting we also discussed alternate energy and coal fired projects. Pakistan has largest coal reserves in Thar, Sindh. Sindh government and Engro wish to develop 1,200MW coal based power project at Thar. We discussed thermal power and laying transmission line projects. There is vast scope for Chinese companies to work in Pakistan and its investors to make investment in energy projects," he stated. Durrani said Exim Bank and China Development Bank provided Pakistan loans to finance projects including in energy sector in the past. "We are also discussing terms of financing, interest rate and repayment of loans. China will continue to do so in future. Interest rates differ from project to project."

Copyright Pakistan Press International, 2011

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South Korean companies to invest in power sector: Ambassador

South Korean Ambassador in Pakistan Choongjoo Choi has said that Korean companies are all set to make investment in Pakistan's power sector. While speaking at the Lahore Chamber of Commerce and Industry (LCCI) here on Wednesday, the Ambassador said that more and more Korean companies are showing their interest for investment in energy sector to help Pakistan overcome the acute energy shortage. He said that Korea's trade with India stands at $16 billion, which will be doubled in a few years; it is $1 billion a day with China while bilateral trade with Pakistan is mere $1.1 billion. He, however, expressed the optimism that the volume of trade between Pakistan and South Korea was bound to increase as both the governments and the private sector, are taking measures to get the desired results. He said that the non-availability of required trade-related information was the biggest hurdle in the way of South Korean investment in Pakistan. The diplomat while identifying a number of areas for mutual co-operation said that there was a need for expertise-sharing as both the countries have a lot to learn from each other. He said that there is a big potential in SME sector, therefore Pakistani business community could avail opportunities in this particular area. While calling for measures to jack-up bilateral trade and increase in Korean investment in Pakistan, the LCCI President Shahzad Ali Malik said that Pakistan is a large market, its strategic location as principal gateway to the Central Asian States and other regional countries offer lot of opportunities for relocation of Korean Industries in Pakistan. "We take pride in the fact that Korea has been an important trading country for Pakistan in Eastern Asian region followed by Japan in terms of size of bilateral trade. We are glad to have Korea as a Friend of Democratic Pakistan too", he added. Malik said that both the countries have decades-old economic relations and experienced good results of joint ventures in various fields like telecommunication, electronics chemical industry and automobiles industry. Korean companies are also actively participating in infrastructure projects like highway construction and power generation. It is really great to achieve a landmark by expanding the two way trade to over one billion dollars in 2010, which was precisely recorded to the tune of $1,018.5 million. It showed great improvement from $865.2 million in the corresponding year. Trade balance has traditionally not been in favour of Pakistan and currently it stands at $459.7 million. But the good thing is that Pakistan's exports to Korea are showing continuous upturn from the last few years like it grew from $208 million to $279 million from 2008 to 2010, he said. It is the high time that we should shift our emphasis to attract Foreign Direct Investment from European to Asian countries. At present, Korean companies are well settled in Pakistan and provide good grounds to other Korean investors to venture in Pakistan. The LCCI President suggested that to create a win-win situation for both the countries, Koreans need to increase their imports of cotton, raw hides & skins, fish, medical apparatus, toys & games, leather products, articles of apparels and textile from Pakistan. LCCI former Presidents Shahzada Alam Monoo, Iftikhar Ali Malik and LCCI Executive Committee members were also present on the occasion.

Copyright Business Recorder, 2011

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Thar coal to be fully exploited: Qaim

Sindh Chief Minister Syed Qaim Ali Shah on Saturday said the government is fully committed to the development of Thar coal, which has the potential of turning the country's economy around. The Sindh CM said this while presiding over the 13th meeting of Thar Coal and Energy Board (TCEB), at the CM House here. The Sindh CM welcomed the participants of the meeting and said Thar coal resources can be used for power generation, chemical production and other purposes and have the potential of providing energy security to the country. Secretary Coal and Energy/Managing Director Thar Coal and Energy Board, Muhammad Younus Dhaga briefed the forum about the status of development of various blocks in Thar exploration area and said that dried coal (lignite) from Thar, after briquetting, can be transported and utilised by retrofitted thermal power plants in Pakistan. Thar Block-II coal mining, briquetting and power was discussed in the meeting and focal persons from both sides were nominated for further due diligence of the project. Sindh Board of Investment (SBI) Chairman Zubair Motiwala briefed the Board about the process of international competitive bidding and said that as per TCEB's decision in the 12th meeting, the Block-I of Thar Coalfields was allocated to the renowned Chinese company Global Mining. Further, an Australian Company M/s Australasian Continental Energy submitted proposal of coal mining of six million tonnes per annum initially, to be scaled up to 18 million tonnes/ annum. They intend to initially generate 1100 MW in five years, which in 10 years would reach 2000 MW and around 3000 MW in 15 years. The Evaluation Committee recommended to the Board that in view of apparent track record of fund raising for similar projects by its sponsors, the Australasian Continental Energy Pvt Ltd may be offered Block IV, subject to condition that they would provide following the to GoS within two months: credible Financing Plan for the project including debt/ equity financing, their audited financial statements and other required documents. The Board also approved the recommendation of the evaluation committee. CEO Sindh Engro Coal Mining Company, Khalid Mansoor in his presentation briefed on the progress on Sindh Engro Coal Mining Company. He informed that substantial progress was made for Chinese financing of the project at the joint Energy Working Group's meeting in Beijing on August 1 to 3, 2011. Asad Umar of Engro also attended the meeting and emphasised on early finalisation of infrastructure projects to enable the company to research financial close on project of 6.5 million/ton of mining and 1200 MW of power generation. Chairman Underground Coal Gasification Project, Dr Samar Mubarakmand briefed the TCEB that the project for the generation of 100 MW of electricity through the process of Underground Coal Gasification at Block V in Tharparkar, Sindh was commenced and the first release of funds was on April 28, 2010. To- date $9.22 million have been released and the allocation for the project during PSDP 2011-2012 is $2.4 million. With the availability of $9.22 million, the first gasifier, civil works have been completed. Due to earthquake and tsunami in Japan, M/s Hitachi has delayed supply of compressors by five months till September 2011. The first of the gasifiers has been completed with over 36000 ft of drilling and 18000 ft of steel casing. First test burn is expected in September, 2011. Total gas produced will be connected to the power turbines to generate electricity. The electricity generation of 100 MW will start by December, 2013. Irshad Arain of NTDC informed the Board that NTDC is working for dispersal of 1200 MW from Thar to up country by construction of 500 kV transmission lines from the power plant to Matiari along with an extension at 500 kV Grid Station of Matiari by June 2014. This project is being financed by China Development Bank with an estimated cost of Rs 20 billion. The Sindh Chief Minister assured the Board that the Sindh government is giving high priority to the provision of all infrastructures such as water, roads, transmission network and effluent channel for the Thar Coalfields. The development schemes of these infrastructure projects will be funded as per their requirements to ensure completion within the project timelines. Federal Minister for Water and Power Syed Naveed Qamar assured the support of the federal government for all Thar related projects. The meeting was attended by Federal Minister for Water and Power, Syed Naveed Qamar, Provincial Minister for Irrigation, Jam Saifullah Dharejo, Provincial Minister for Finance, Syed Murad Ali Shah, Sindh Revenue Minister, Jam Mehtab Dehar, Chairman Sindh Board of Investment, Zubair Motiwala and other notables.

Copyright Associated Press of Pakistan, 2011

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25 new power projects approved

The Gilgit-Baltistan government has approved 25 new thermal power projects in different districts, which will boost the power generation capacity thus reducing loadshedding in the region. This was stated by Gilgit-Baltistan Minister for Law Wazir Shakeel, while talking to newsmen on Friday. He said masses of the region would soon hear good news regarding Bunji tunnel as Prime Minister Yousuf Raza Gilani would give approval for the project in a day or two. He said GB had a capacity to generate 30,000 to 40,000 mega watt electricity. The Diamer Basha Dam after completion would generate power. The minister said the government was utilising all available resources for the development of area and maximum relief would be provided to the masses.

Copyright Associated Press of Pakistan, 2011

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Pak-Polish cooperation in oil and gas sector extended

Dr Asim Hussain, Federal Minister for Petroleum and Natural Resources has appreciated the co-operation extended by Polish Government in the Oil and Gas Sector. He was talking to the Polish Economy Minister and Secretary of State of Ministry of Foreign Affairs at Warsaw, Poland, says a press release received here on Friday. Proposals for establishment of a Chair on Geo-sciences in a Pakistani university, exchange of students and establishment of a research institute of hydrocarbon studies in Pakistan were discussed in the meeting. The Polish government promised to favourably consider offering scholarships to Pakistani students in the University of Mining in Krakow, Poland. A team of Pakistani experts will soon visit Poland to further discuss the concrete proposals discussed in order to establish long-term relations in the hydrocarbon sector. Dr Asim Hussain participated in a conference to explore the venues of co-operation in oil and gas sector especially in shale gas. The event which was organised by Polish Oil and Gas Company (PGNIG), was also attended by the officials of the two Ministries besides senior management of Polish Geological Institute. The Minister later paid a visit to the PGNIG's Headquarters in Warsaw where he held a meeting with the senior officials of the company and discussed ways of increasing co-operation in the energy field. The Minister arrived at Warsaw on Wednesday evening on a two-day visit at the invitation of Polish Deputy Prime Minister and Minister for Economy Waldemar Pawlak. He is leading a three-member delegation comprising representatives of prominent oil and gas sector companies in Pakistan. The visit is considered important for furtherance of government's efforts to address the problem of energy shortfall in the country. Pakistan and Poland enjoy strong economic and commercial relations. Last year bilateral trade amounted to US $210 million with a 24 percent surge from the previous year was observed. A number of Pakistani companies have opened their offices in Poland to cater for the regional European market. Poland is considered as the largest shale gas repository and prominent geological surveying and exploration companies have business and investment relations with Pakistan. This visit of the Federal Minister is expected to further open the avenues of long-term co-operation in the traditional and non-conventional sources of energy.-PR

Copyright Business Recorder, 2011

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IP gas pipeline project: ''Government plans to borrow $300 million from local banks''

Pakistan plans to borrow $300 million from local banks to build a pipeline that will carry natural gas from neighbouring Iran, easing its worst energy crisis that is curbing economic growth. State-owned companies will provide about $210 million in equity for $1.3 billion pipeline, said Mobin Saulat, acting managing director of Inter State Gas Systems Ltd, which is responsible for gas pipeline project. Pakistan may approach foreign companies including OAO Gazprom, International Petroleum Investment Co & China National Petroleum Corp for rest of financing, he said. "We''ve done market testing to see appetite among local banks," Saulat told Bloomberg in interview. "The signal we''ve got is that around $300 million can be raised from a local consortium." Domestic funding is crucial because US and international sanctions against Iran, imposed over concerns that the country is trying to build nuclear weapons, are likely to block Western and multilateral funding. Under June 2010 accord, Iran will provide about 21.5 million cubic meters of gas a day to Pakistan for 25 years. It can be extended by five years and volumes may rise to 30 million cubic meters a day. US last year tightened its sanctions, which target Iran''s energy sector, and President Obama supported an alternative gas pipeline project from Turkmenistan to Afghanistan, Pakistan & India, that would bypass Iran. Economic sanctions by UN, EU and US over Iran''s nuclear program have discouraged investment in that country. "So far, sanctions primarily focus on development of fields," Saulat said. "Iran is currently engaged in exporting gas to Turkey through a pipeline. There was never a pipeline-specific sanction." State-owned companies that may collectively buy a majority stake in planned pipeline include Government Holdings Ltd, Sui Southern Gas Company SSGC & Sui Northern Gas Pipeline SNGP, he said. Gazprom, Russian gas-export monopoly, International Petroleum Investment, an arm of Abu Dhabi government and CNPC have shown interest in the venture, Saulat said. Gazprom may fund and help build 780-kilometer pipeline, he said declining to elaborate. Bloomberg says a press officer at Gazprom, who couldn''t be identified in line with company policy, declined to say whether company is interested in the project. Pakistan''s gas shortfall is forecast to reach 2.22 billion cubic feet a day in current fiscal year 2011-12, according to government data. It forced government to ration supplies to cars that run on CNG, while big cities faced load shedding for about 12 hours a day. Last year, 53 percent energy came from natural gas, 30% from oil, rest from coal, nuclear, and hydropower, according to BP Plc data. Pakistan produced 39.5 billion cubic meters of gas in 2010, or 3.8 billion cubic feet a day, BP says. Inter State Gas invited banks last month to help arrange funding and plans to seek bids for construction next month, Saulat said. Pipeline will carry gas from South Pars field via Balochistan to off-take point in Nawabshah, Sindh. "We are doing things in parallel for expeditious completion of this project," he said. "There is a huge shortfall and we need to work on many options to meet that growing demand."

Copyright Pakistan Press International, 2011

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CASA 1000 project to help end energy crisis: Tajik envoy

The CASA 1000 (Central Asia South Asia Regional Energy & Trade) project will help end the prevailing energy crisis being faced by Pakistan. This was stated by Ambassador of Tajikistan, Zubaydullo N Zubaydov while addressing a ceremony in connection with the national day of Tajikistan here at local hotel. The Tajik envoy said that Pakistan would receive electricity at a very economical rate once the project was completed. He said the project would further strengthen bilateral economic ties between Pakistan and Tajikistan. CASA-1000 project will transmit 1000 MW of surplus electricity from Tajikistan and Kyrgyzstan to Pakistan through Afghanistan. The total length of the transmission line is 750 KM while the project has been planned on Public Private Partnership basis with the support of WB, IFC, ADB and IDB. The project cost is estimated to be around $865 million. Zubaydov said that the protocol signed at Dushanbe during the 4th Pak-Tajik JMC provided vast opportunities for bilateral co-operation in various fields including agriculture, education, trade, energy, health, sports, tourism, industry, investment, banking, transport, communications, culture and combating drugs. Expressing satisfaction over the outcome of the recent visit of a 108-member trade delegation led by Chief Executive of TDAP, Tariq Puri from Pakistan to Dushanbe, he said that establishing road and air links between the two countries would give boost to the bilateral trade between the two countries. He announced to provide all necessary assistance to the businessmen. "The Tajik embassy is available to the Pakistani businessmen 24 hours to help and facilitate them," Zubaydov said. Speaking on the occasion, TDAP Chief Executive Tariq Puri hoped that the outcome of the delegation's visit to Tajikistan would be fruitful. He said Pakistan's communication minister's visit to Dushanbe is a step forward to establish road link between Pakistan and Tajikistan via Afghanistan. Honorary Consul General of Tajikistan in Karachi, Irshad A Kassim and other also spoke.

Copyright Business Recorder, 2011

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Rs 789.4 million released for Thar coal gasification projects

A total of Rs 789.4 million has been released so far for the underground coal gasification projects of Thar coal up to June 2011, it is learnt. According to sources in the Planning Commission, balance cost of Rs 195.6 million would be provided during current financial year for completion of two projects which include: (1) Creation of new processing facilities for handling and purification of coal gas production by underground coal gasification; and (2) Creation of new processing facilities for production of coal gas by underground coal gasification. Dr Samar Mubarakmand has initiated these two projects at a cost Rs 985 million. In April 2009, the Central Development Working Party had approved these two projects at a cost of Rs 494.45 million and Rs490.48 million, respectively.

Copyright Business Recorder, 2011

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Huge gas reserves discovered in Sindh: Asim

Huge reserves of over 100tcf of shale gas have been discovered in various parts of Sindh and the government has initially started work on these reserves in Hala, district Matiari. Federal Minister for Petroleum and Natural Resources Dr Asim Hussain talking to media during his visit to Karachi Press Club on Saturday said the first core of shale gas explored near Hala, has been sent for necessary tests. He pointed out that the country's gas reserves are expected to be increased by four times in next 5 to 10 years. He was of the view that the new discoveries of shale and tight gas in Sindh will help meet gas requirements in the province and of the country also. He pointed out that the facts about these shale gas reserves were kept secrete in the past. Replying to a question, he said next year will be very difficult in terms of gas supply for the country. He said the government has planned to import 500 mmcf LNG to meet the situation. On the circular debt issue, the minister said the government would announce a clear roadmap on the permanent solution of circular debt issue in next 10 days. He pointed out that different options and formulas including issuance of convertible bonds, etc, are being discussed at the ministerial levels and the most suitable formulas would be finalised in a few days. To another question, Dr Asim pointed out that people in CNG business are making huge profits as according to him they purchase gas for Rs 23 and sell it for Rs 56. On the royalty issue, the minister said the issue has been discussed on different levels and it has been decided that the provinces have to spend 50 percent of royalty on development works in the gas producing districts to generate employment and economic activities there. On the issue of new provinces, he said the Constitution provides for a framework for creation of new provinces. The demand for creating new provinces is not against the national interests. He said the government has focused on the real issues and the reconciliation policy of President Asif Ali Zardari will help resolve these issues.

Copyright Business Recorder, 2011

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IP gas pipeline project: Russia''s Gazprom submits EoI

The largest Russian gas exploration company, Gazprom, has shown interest in the project of building Iran-Pakistan gas pipeline (IP). It has submitted Expression of Interest in response to Inter-State Gas Company's invitation. According to sources in the Ministry of Petroleum and Natural Resources, Pakistan will import 750 million cubic feet of gas daily for 25 years from Iran, according to the terms of the agreement. The pipeline will facilitate transfer of natural gas from Iran's biggest gas field in South Pars to Pakistan through the south-western Balochistan. Sources said that due to the high cost of Iranian gas it will not be available for domestic consumers. Most of its supply will go to the industrial sector, especially for power generation. The company has also shown interest in developing Pakistan's energy sector and will help build power generation facilities and develop gas fields. Officials added that feasibility report is being prepared and after this process tenders would be invited for short-listing the companies so that the project could be completed in a proper manner. Pakistan on May 28 had given green signal to Nespak to initiate work on the feasibility study of Pakistan's section of the pipeline from the Iranian border to district Nawabshah. Nespak along with ILF Germany currently has mobilised experts to undertake a reconnaissance mission preparatory to laying the Iran-Pakistan (IP) gas pipeline on Pakistan side of the border. Sources said that the team would soon return to Islamabad and submit the reconnaissance report. Sources in the Petroleum Ministry about Gazprom said that it is among the top global natural gas exploration, production, transportation, and marketing companies. It produces about 547 billion cubic metres of natural gas a year, which is 17 percent of the world's production. It operates Russia's domestic gas pipeline network and delivers gas to countries across Central Asia and Europe. Gazprom relies heavily on western exports. Sources added that President Asif Ali Zardari's visit to Russia on May 11-13 this year played an important role in attracting Russian companies to invest in Pakistan. Experts and government officials insist early completion of the project that would effectively deal with the existing energy shortage. The project would help generate around 5,000 megawatts of electricity, which is equivalent to peak load-shedding in Pakistan, according to experts. On the other hand ISGC has also changed the term of condition of initial EoI, and has waived off the non-refundable processing fee of $7,000. It has also extended the closing date for submitting of EoI from August 20 to September 10. Talking about the Interstate Gas System's move to waive off $7,000 fee, the official said that to encourage foreign investors the move is a healthy step, adding so ISGC has received a few EOIs from global companies. China and Russian companies are showing great interest in the project, while German company is already working on the feasibility study of IP along with Nespak team, sources maintained. They said that during Zardari's visit to Russia the two countries also expressed interest in implementing projects pertaining to the creation of a system that would transmit electricity from Tajikistan to Afghanistan and Pakistan (KASA-1000) and build Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. The $7.5 billion TAPI gas project, if completed, would be the backbone for Pakistan's industry and economy, which at present is suffering from acute gas load-shedding and power load shedding.

Copyright Business Recorder, 2011

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Land acquisition for hydropower project begins

The process of land acquisition has been started for Pitrand Hydro Power Project (PHPP), Abbottabad / Azad Kashmir, and all other impediments would also be removed in a smooth manner to pave the way for early initiation of construction work on this project. The Commissioner Hazara Division Khalid Khan Umerzai gave this assurance to the Chief Executive Officer (CEO) of PHPP, General Farrukh Javed (Retd) who called on him at the Commissioner House, Abbottabad on Monday. The District Co-ordination Officer, Abbottabad, Syed Zaheer-ul-Islam, the PHPP General Manager Administration and Land Acquisition, Colonel Ali Shan and officers of the District Revenue Department were also present. Expressing his views about the PHPP the Commissioner said that in view of the prevailing power crises in the country such new projects of electricity generation must not be allowed to suffer due to any issue. He assured that the Divisional and the District Administration would extend every required co-operation and support for early completion of the project adding that all the hindrances in the land acquisition process would be removed on priority basis. He said that the land was already been acquired while the DCO Abbottabad has been directed to play his role for immediately resolving any dispute in this connection. Explaining the prominent features of the project the CEO said that PHPP would be constructed on both sides of the boundary of Abbottabad and Azad Jammu and Kashmir which, on completion, would generate 147 mega watts of electricity. He said only 212 kanals of land at Abbottabad side will fall in this project and an amount of Rs 14.263 million has been allocated for its acquisition. The General revealed that in addition to the power production the project will provide employment opportunities and other long-term benefits for the affected people.

Copyright Business Recorder, 2011

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Iran-Pakistan gas project: Dr Hafiz calls for early implementation

Former Federal Minister for Finance and Economic Affairs Dr Hafiz A Pasha on Sunday said that there should be no delay in Iran-Pakistan (IP) gas pipeline project because Pakistan is facing acute shortage of energy and delay would be more harmful for the country. In a media interview, Dr Hafiz A Pasha said that Pakistan gas reserves have been depleted and "we have already consumed half of our gas reserves'. Federal Minister for Petroleum and Natural Resources Dr Asim Hussain has said that Iran-Pakistan gas pipeline project will be completed by December 2014. Tehran and Islamabad formally signed a multi-billion-dollar gas contract in June 2010, based on which Iran's natural gas will be pumped to Pakistan from the South Pars gas field in the southern province of Bushehr. Iran has already constructed more than 900 kilometres of the pipeline, which is to carry 21.5 million cubic meters of natural gas per day to its eastern neighbour. Pakistan has officially invited Expression of Interest (EoI) for its 1.2 billion dollars Iran-Pakistan gas pipeline project. Pakistan is in the grip of a serious energy crisis that is affecting all sectors of the economy and the various segments of the society. Analysts in Pakistan believe that Iran-Pakistan gas pipeline is the only solution to resolve Pakistan's gas woes as massive rationing and shortages in recent months have indicated Pakistan is fast running out of gas. Dr Hafiz A Pasha said that the Iran-Pakistan gas pipeline line project is of utmost importance for Pakistan. "Actually it should have come much earlier", said the former analyst. He said that the project should be implemented as early as possible. The economist added that the project would also bring economic stability in the region. Hafiz A Pasha was of the view that the project is extremely important for Pakistan and there is no other view to this. "Because gas is the principle source of energy and right now we are facing shortage of power", he said.

Copyright News Network International, 2011

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Energy sector: Naveed woos Chinese investors

Federal Minister for Water and Power Naveed Qamar said here on Tuesday that the growing energy demand in Pakistan is a challenge for the government. Yet it provides immense opportunities for Chinese investors to contribute towards reducing energy shortage in the country while sharing the benefits. Leading Pakistan's delegation in the first China-Pakistan Joint Energy Working Group (JEWG) meeting here, he thanked the Chinese government "for extending every possible support to Pakistan at all times, especially in the hours of need." Qian Zhimin, Deputy Administrator of National Energy Administration (NEA) of the National Development Reform Commission of China, led the Chinese side in the largely attended JEWG meeting. The Minister said that Pakistan has always been proud of having extremely friendly and strong ties with China. He said that the signing of a Memorandum of Understanding (MoU) on 17th December 2010, "pursuant to which we are conducting the 1st China-Pakistan JEWG meeting, is a clear evidence of the brotherly relationship between the two neighbouring countries." Pakistan, the Minister said, is currently faced with energy demand-supply gap, yet the Government is fully committed to resolve the prevalent energy shortages and achieving energy security objectives on sustainable basis with active support of friendly countries, especially China. "As per estimates of Pakistan Electric Power Company (Pepco), there is a deficit of around 5,000 mw in our system, which could further grow in future due to rapidly increasing growth in power demand," the Minister observed. Qamar said the Government of Pakistan has always encouraged and welcomed participation of Chinese entrepreneurs, investors, and manufacturing companies to participate in the development of all sectors of the country's economy especially in the power sector. The Minister pointed out that Pakistan's power sector has never been a new area for Chinese entrepreneurs, investors and power sector companies, as there are already many leading companies actively engaged in various energy projects in Pakistan in different capacities. Pakistan, the Minister said, is endowed with abundant natural resources like hydel, gas, coal, and renewable energy that can be used for power generation purposes. He pointed out that Pakistan has enormous potential for small to medium-sized and large hydro power projects. He told the gathering: "You will be pleased to note that the identified hydropower potential in the country is around 60,000 mw, majority of which is economically exploitable. In contrast, the existing installed hydel capacity is less than 20 percent of the total potential." He said that coal is an equally important local resource of Pakistan. "Our total coal reserves, which are largely at Thar (Sindh), are estimated to be around 185 billion tons. Even if half of these deposits are exploited properly, an additional 100,000 mw would be generated for next 30 years," he added. Pakistan, Qamar said, is blessed with abundant renewable energy resources especially wind and solar energy. "Our government is fully focused to harness these resources and converting them into useable forms of energy," he maintained. Besides, in order to fully encourage and engage private sector in the development of Pakistan's power sector, the Minister said: "Our government has taken various initiatives, which include development of upfront tariffs for multiple fuel/technology based power projects, operation and maintenance of public sector power generation companies (gencos) through private sector, and conversion of existing IPPs to cheaper fuels. The Minister expressed hope that at the platform of JEWG, the energy sector experts of both Pakistan and China would mutually deliberate upon latest energy developments and utilisation practices, exchange views on matters of mutual interest, explore the specific energy projects and appropriate approaches to cooperate with each other in energy related issues. He said during the visit of Chinese Premier Wen Jiabao to Pakistan in December last year, various important decisions were taken to enhance co-operation between the two countries. Premier Wen on the occasion assured full support of the government of China especially with regards to the provision of financing for conventional (hydel, thermal and coal fired), renewable (solar, wind), and civil nuclear energy projects. The Minister lauded the efforts of NEA in enhancing bilateral energy co-operation between the two countries. "I assure them of full co-operation and support on behalf of the government of Pakistan and hope that with our mutual co-operation, the economic ties between the two countries will grow stronger with the passage of time," he added. The Minister said the government is hopeful that through various initiatives being taken, the existing demand-supply gap would be completely eliminated on sustainable basis and the sufferings of the common people will be reduced to a great extent. The meeting deliberated upon possible avenues of Pakistan-China co-operation in following projects: Neelum Jehlum, Khan Khwar, Debai Khwar, Allai Khwar, Jinnah, Satpara, Darawat, Kohala, Gomalzam, Bunji, raising of Mangla Dam, Ghabir, Nai Gaj, Naulong, Diamer-Bhasha, Matiltan, Suki Kinari, Kotli, Madian, Sindh-Engro Coal Mining and Power Project, Sonda Jherruk Coal project, AES import and coal project, Nandipur thermal power and Chichuki Malian thermal project, besides a host of alternate energy projects. On the occasion, Pakistani and Chinese experts gave presentations on various power sector development projects with the possibility of bilateral co-operation in future including Hydropower Development in China, Overview of Pakistan's Power Sector, Power Industry Development in China, Efforts to Harness Indigenous Coal Resources in Pakistan, Opportunities for Chinese Investors to Participate in Power Sector in Pakistan, Renewable Energy Development in China and Pakistan and Oil & Gas Development in Pakistan and China. The Pakistani delegation comprised Ambassador Masood Khan, Chairman Wapda Shakeel Durrani; MD Pepco Rasool Khan Mahsud; CEO Alternative Energy Development Board, Arif Allauddin; MD Thar Coal & Energy Board, Aijaz Ali Khan; DG Geological Survey of Pakistan, Imran Ahmed; MD Private Power Infrastructure Board, N A Zubairi and CEO Sindh-Engro Coal Mining Company, Khalid Mansoor. The participants from Chinese side included Chief Engineer NEA, NEA Deputy Director Generals for New and Renewable Energy, Power, Oil & Gas, International Co-operation along with their division directors. In addition representatives of China Development Bank, Exim Bank, ICBC, Three Gorges Dam Corporation, China Machinery Engineering Corporation, Dongfang Electric Company, Sinohydro Corporation and HydroChina Corporation. Later, while addressing a press conference at the Pakistan Embassy, the Minister for Water and Power said that to remove bottlenecks and for the implementation of energy projects on fast track basis a "Green Channel" would be introduced specifically for the Chinese companies. He said that the 1st JEWG meeting was very successful and it will be held periodically in both the countries. He said if the implementation of any projects faced bottlenecks these would be removed by streamlining official channels. The JEWG meeting discussed all energy generation projects and their financing, he noted. About Indian concerns on various hydro power projects of Pakistan, he said that it is very clear that Pakistani projects are being built on lower riparian. He said if Pakistan or India have any complaint they can use the channel of Indus Water Treaty to which both the countries are signatories. Moreover, Naveed Qamar said, there is also an international arbitration channel for this purpose. He said that around 80 percent energy projects in Pakistan are being implemented with Chinese assistance. Addressing a reception at Pakistan House, also attended among others by Deputy Administrator NEA, Qian Zhimin, Qamar said that China is the only country that can help Pakistan to get rid of power crisis.

Copyright News Network International, 2011

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