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News Headlines for the month of
SEPTEMBER 2011

Sixteen companies working on oil, gas exploration in FATA

Sixteen oil and gas exploration companies have initiated exploration work in Khyber, Orakzai, North Waziristan and South Waziristan agencies as well as in Frontier Regions (FRs) Peshawar, Kohat, Bannu, Tank and D.I. Khan. This was told to Governor Khyber-Pakhtunkhwa, Barrister Masood Kausar, in a presentation on Source Rock Mapping and Investigation of Hydrocarbon Potential (SRMIHP) here at Governor's House. The Governor directed removal of the impediments in the implementation process of Source Rock Mapping and Investigation of Hydrocarbon Potential (SRMIHP) in FATA to accelerate practical work on the oil and gas exploration in the FATA and adjoining areas. Speaking on the occasion, the governor said that they want to see a productive and meaningful headway under the project as being vital for the economic development of the country and FATA. Project Co-ordinator Fazali Rabbi Khan in his presentation held here at Governor's House expressed that initiated in 2008 under an agreement between the FDA and National Centre of Excellence in Geology Peshawar University after formal approval the project costs Rs 39.852 million and it is to be completed by June 2012. The project's objectives include identifying hydrocarbon generating rocks and its spatial distribution in the region; preparing a Geo-database regarding hydrocarbon potential and generating a systematic data and attract oil and gas companies for exploration in the area. He said that the basic objectives of the project has been achieved by preparing Geo-database, identifying target areas and attracting oil and gas companies to come in for exploration. The Governor emphasised the need to ascertain the main reasons to know as to why the work could not be started despite the interest shown by different companies. "We must identify the areas where efforts are needed to ensure the work is initiated", the Governor stressed and said that the difficulties would be sorted out in consultation with the respective companies. He said although the security is the main concern yet it could be managed keeping in view the significance and importance of the project. He said that oil and gas exploration in FATA would not only help overcome the energy crises but also give a big boost to our efforts for the socio-economic development of FATA and its people. The Governor appreciated the achievements under the project and stressed that the end result should be meaningful and encouraging. The presentation was attended among others by the Chief Executive FDA Zubair Asghar Qureshi, Mazhar Ali Khan GM Minerals FATA, Additional Secretary to Governor Daud Khan and Geologists and Research Fellows of the Project.

Copyright Business Recorder, 2011

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PPL to partner with Iran for E&P activities

Pakistan Petroleum Ltd (PPL) is interested in entering into oil and gas exploration and production activities in Iran. In response to the query of Karachi Stock Exchange (KSE), PPL said that it has evaluated a number of opportunities for investment in oil and gas sector in Iran and is pursuing for government's assistance in acquiring working interests in prospective blocks of Iran on government to government basis on mutually agreed terms.

Copyright Associated Press of Pakistan, 2011

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SSGC meeting may decide to enter LPG market

The outcome of a Sui-Southern Gas Company (SSGC) meeting scheduled on Tuesday is expected to allow it to enter the liquefied petroleum gas (LPG) market to cope with the demand and supply imbalance, officials told this correspondent. Sources said here on Monday that in line with the directions of Dr Asim Hussain, Federal Minister for Petroleum and Natural Resources, the company, which operates in Sindh and Balochistan provinces, would soon start LPG operations. The company is supplying natural gas to 23 million consumers including domestic, commercial and industrial sectors. In the LPG market, the company would face no non-recovery and gas theft issues, as it would sell LPG directly to consumers on cash payment. According to officials, SSGC has offered Rs 1.6 billion to acquire Progas's LPG terminal at Port Qasim, but the local shareholders have filed a case in the Sindh High Court. "All avenues are being explored to overcome the energy crisis, and the government is looking for increasing use of LPG in the energy mix. In 2011 LPG policy the government made it compulsory for all LPG marketing companies to import 20 percent of their gas quota to protect consumers from overcharging and creation of artificial LPG shortage" they said. "There are vast untapped areas which could become potential LPG markets, and SSGC initiative to enter the LPG market would gradually decrease our total dependence on natural gas, which with each passing day is declining in the country," the officials said. However, despite severe shortage of natural gas and even petroleum fuel, LPG consumption has been limited in the country and it is mainly consumed as domestic fuel in areas where natural gas is not available. Pakistan's daily LPG consumption is about 5,000 tons, but local production dropped from 1,600-1,700 tons per day in 2004-05 to 1,100 tons. An SSGC official told Business Recorder that after acquiring Progas LPG terminal, the subsidiary companies of SNGPL and SSGC would be importing LPG in bulk quantities. He said that these companies would sell LPG in remote and underdeveloped areas of the country, especially where private sector is reluctant to enter. He said that LPG use in automobiles is widely consumed across the world and even in Pakistan around 250,000 rickshaws and taxis in big cities like Lahore, Rawalpindi, Faisalabad, Gujranwala are using LPG as fuel. The LPG Association has expressed serious reservations over the decision of the government to enter the LPG market, saying that the government-run companies operate mainly on subsidies.

Copyright Business Recorder, 2011

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India again shows interest in IP gas line project

The Indian government has once again shown interest in the Iran-Pakistan (IP) gas pipeline project, while in 2009 it was reluctant to be part of the project due to American pressure, officials told Business Recorder on Friday. Sources in the Ministry of Petroleum and Natural Resources said that India once again is willing to take part in the Iranian gas pipeline project. They said that Indian economy is registering a high growth and attracting huge foreign investment, while the country is facing energy shortage to meet the increasing demand. Hence, the Indian government is seriously considering to become partner in the project. Iranian Foreign Minister Dr Ali Akbar Salehi on Thursday, while addressing a joint press conference with Dr Abdul Hafeez Sheikh, said that the Iranian part of the Iran-Pakistan gas pipeline will be completed by the middle of next year. Sources said that India had never completely left the project, and added that India has strong relations with Iran, and it kept on talking on the project with Iran. India is an energy-deficient country and to sustain high growth rate and ensure energy security, it needs energy from every possible source and is seriously considering of importing gas from Iran, they added. When BR contacted an official of Indian Embassy in Islamabad, he said that he was unable to comment on the issue, adding that he did not know anything in this regard at the moment. "As far as Pakistan is concerned, we are committed to complete the project by the end of 2014 as we are facing severe energy shortage and our main industry textile has started shifting to other countries due to energy crisis. The gas imported from Iran would be used for power generation to enable our industry to sustain and grow," a top official working on the project said. Pakistani team working on the project would submit all the data and reports collected during the reconnaissance survey of the project to the Ministry of Petroleum and Natural Resources in the first week of October, officials said. According to officials at Ministry of Petroleum, National Engineering Services Pakistan (NESPAK) has completed the reconnaissance survey of the Pakistani side, while Iran has almost completed work on the pipeline on Iranian side. 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 province. Pakistan currently is facing severe gas and power shortage, while the government is managing the crises through gas and power load management plans as well as increasing the prices of utilities. Currently government has declared two and half day per week suspension in supply of Compressed Natural Gas (CNG) in Punjab and two days in Sindh. All the data would be compiled and report to the Ministry shall be submitted in October, showing the final route corridor, said an expert working on IP. He said that the NESPAK team has returned after completing the reconnaissance survey of the pipeline on Pakistani side. "Nespak team of experts has arrived back to Lahore after successfully completing the reconnaissance survey of 800 Km pipeline route. The team has demarcated the possible corridor in which the detailed topographic survey would commence in October this year. In addition to this, Geotechnical investigations for soil and rock would also commence parallely, the official added.

Copyright Business Recorder, 2011

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United Energy plans $750 million-$1 billion acquisition

Hong Kong-listed United Energy Group Ltd is looking to acquire assets valued at about $750 million to $1 billion from established oil companies, as it seeks to expand its global footprint after securing BP Plc's portfolio of Pakistan oil and gas assets. Executive Director Leo Kirby told reporters that the company was targeting deals equal to or bigger than its recent deal with London-listed BP, and was seeking acquisitions in Africa, the Americas and Asia. Armed with a $5 billion project financing loan from China Development Bank Corp, Kirby and Chief Financial Officer Thomas Pang, said the company was focused on large acquisitions likely to complement China's oil majors such as oil giant PetroChina Co Ltd. "We can easily see a way of at least growing the company fivefold in the next five years by deploying that capital and accreting some value in a 4-5 year timeframe to see our way becoming a $10 billion enterprise," Kirby said. Russia, Europe and sanctioned countries including Iran, Sudan and North Korea would not be areas of focus, he added. United Energy, with a market capitalisation of about $1 billion, bought oil giant BP's upstream oil and gas assets in Pakistan for $775 million in cash last December. While Pakistan is a higher risk environment, Kirby said he saw little disruption to operations as the company supplied a sixth of gas in Pakistan and had good government relations and local support. "We quite like the model of large oil companies exiting countries where we take over their operations, take over their people," Kirby said. The executives said United Energy was hoping to complete an acquisition by next year but could not be more specific.

Copyright Reuters, 2011

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Pakistan, Iran gas pipeline ‘almost at border’

Pakistan and Iran on Thursday said a multi-billion-dollar gas pipeline between the two countries was pressing ahead on schedule despite US objections to the project. The two signed an export deal last year for Iran to supply natural gas to its eastern neighbour from 2014, with sales to reach 750 million cubic feet (21 million cubic metres) to one billion cubic feet per day by mid-2015. The 7.5 billion-dollar gas pipeline project has been trumpeted in Pakistan, which produces just 80 percent of the electricity it needs, as a partial answer to a crippling energy crisis which has led to debilitating blackouts and suffocated industry. But Washington had warned Islamabad against signing the agreement with Tehran, saying the US was preparing laws that could affect the project. “To the best of my knowledge, the project will be ready in 2014,” Ali Akbar Salehi, Iran’s foreign minister, told reporters after a two-day meeting of a joint Pakistani-Iranian economic commission in Islamabad. “The project has almost reached the borders of Pakistan,” he added. Pakistani finance minister Abdul Hafeez Shaikh said that “the project is underway and Pakistan is committed to the pipeline”. The 900-kilometre (560-mile) pipeline is being built between Asalooyeh in southern Iran and Iranshahr near the border with Pakistan, and will carry gas from Iran’s South Pars field. The project, when initially mooted in 1994, proposed to carry gas from Iran to Pakistan and through the country to India, but the latter withdrew over repeated disputes on prices and transit fees. Salehi said Pakistan’s Prime Minister Yousuf Raza Gilani will visit Iran next Monday to meet Iranian President Mahmoud Ahmadinejad and other leaders.

AFP

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OGDCL, PPL seek joint ventures with Iranian oil companies

Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) are keen to collaborate with Iranian oil companies in oil 7 gas exploration and production and proposals to this effect will be discussed on Thursday, September 8 by Pak-Iran Joint Economic Commission (JEC), it is learnt. Sources told Business Recorder that both sides had agreed during the last meeting to pursue co-operation in the field of oil and gas and it was decided in the co-ordinators' meeting that detailed proposals from both sides would be taken up and finalised in the current JEC meeting. They said the two public sector exploration and production companies - OGDCL & PPL - are keenly interested in collaborating with Iranian national oil companies to embark upon exploration & production activities in both countries. These companies are also keen to visit Iran for further negotiations to explore the possibility of joint ventures with Iranian oil companies for selected offshore and onshore blocks. The two sides can collaborate in the development of small oil and gas fields which can be expanded to secondary recovery and development of dormant fields. The OGDCL may extend its collaboration in petroleum production and exploration with national oil companies of Iran like National Iranian Gas Company (NIGC), National Iranian Oil Company (NIOC) and National Iranian Petroleum Company (NIPC). The OGDCL is interested in joint venture exploration partnership with NIPC of Iran and may offer its local exploration assets to it. The OGDCL and NIOC may jointly participate in any future bidding round in Iran and OGDCL may be allowed, on government-to-government basis, to acquire and operate an exploration block in Iran as well as to work on an enhanced recovery project. The OGDCL could also benefit from the vast experience of oil companies of Iran in the fields of exploration, production and management. The ministry of petroleum has also proposed that Pakistan would like to import LPG, fuel oil, diesel, jet fuel and petrochemicals from Iran if better terms and conditions were offered compared to other suppliers, Pakistan also wanted to set up a joint oil refinery with Iran at Gwadar port. Sources said Iranian National Petrochemicals Company (NPC) has expressed willingness to cooperate with reputable and experienced Pakistani companies to deal with the export of Iran's petrochemical products to Pakistan. Pakistan is ready to import more petrochemical products from Iran and proposals have been prepared by ministry of petroleum & natural resources and would also be shared with Iranian during the meeting. Pakistani side is keen to explore the possibility of setting up a joint venture petrochemical complex in Pakistan, with the participation of Iranian side, but is still waiting response from Iranian side.

Copyright Business Recorder, 2011

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Thar Coal Gasification Project: First Test Burn Expected Next Month

The first test burn at the underground coal gasification project at Tharparkar in Sindh province is expected to be conducted next month. 100 megawatt electricity is planned to be generated by the project by December 2013. Official sources said the first gasification and civil works of the project have been completed at the cost of over $9 million. Meanwhile two Chinese and Australian companies have expressed interest in huge coal deposits at Thar. Block-one in Thar Coal has been allocated to Chinese company Global Mining‚ which plans to develop five million tons of coal field annually to produce 900MW which would be gradually increased to 2000MW. Australian Continental Energy has also submitted a proposal for mining six million tons of coal annually and increasing it to 18 million tons. The company intends to produce about 1000MW electricity.

Copyright Pakistan Press International, 2011

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Industrial areas: BoI chief suggests Chinese company to invest in power plants

A six-member delegation from People's Republic of China headed by Zhu Yuanchao, Vice President M/s Dongfang Electric Corporation (DEC), China called on Minister of State/Chairman Board of Investment Saleem H. Mandviwalla, says a press release issued, here on Wednesday. MOS/Chairman BoI suggested Zhu to invest in the power plants for industrial areas with the capacity of 100 or 200 MW. He said that the investment in these industrial units would solve the energy crisis of the industries in the cities of Karachi, Lahore, Faisalabad and Sialkot. He further informed that such power plants could be operated/installed without the prior approval of the government and tariffs could also be charged in accordance with the production cost and profit margins. In this way, the issue of delay in clearance of the payments from the government would also be solved. Zhu informed that DEC after 19 years presence in Pakistan now also intends to invest in various power sectors of Pakistan such as Hydel Thermal, Alternate and Nuclear. He said that their company had already been working on five hydro and thermal projects in the country, including 425 MW Nandipur thermal and 525 MW Chichokimalian project. DEC not only achieved the annual production of power generating equipment for more than 30,000MW consisting of hydro, thermal, nuclear, wind, combine-cycle generating unit, presently enjoys one-third domestic market share in thermal power and two-fifths in hydro power, but also has been diversifying its manufacturing industries to various fields such as desulphurization and denitrification, heavy-duty machinery, power transmission, hi-voltage large power frequency converter, solar grade silicon, industrial control devices, chemical and maritime equipment. DEC has taken the lead in China particularly in contracting international power stations and a wide variety of large engineering projects, and exports complete plants and equipment to over 30 countries.-PR

Copyright Business Recorder, 2011

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CDWP likely to approve 'coal gas conversion to liquid fuel' project worth Rs 898 million

The Central Development Working Party (CDWP) is likely to approve the 'Design, manufacturing and commission of pilot plant for conversion of coal gas into diesel/liquid fuel' project, at an estimated cost of Rs 898.382 million, it is learnt. The project would be funded totally by Annual Development Plan (ADP) program of federal government. The project is to be financed out of block allocation to the Ministry of Science and Technology. According to documents available with Business Recorder, the objectives of this project are: (i) method development for underground coal gasification, (ii) purification of syngas, (iii) method development for the conversion of syngas into liquid petroleum at lab scale, (iv) fabrication of pilot plants for syngas production, its purification and its liquefaction, and (v) refining of liquid petroleum produced from syngas. The three-year project would be launched in Tharparker District where there are huge coal deposits of 175.5 billion tons spread over an area of 10000 sq km. Sources said that preliminary studies show that extraction of coal via classical mining methods is not economical as its moisture content is extremely high--40-50 percent. The government is initiating clean coal technologies, especially the underground coal gasification (UCG). The UCG is the in-situ conversion of coal into combustible gases. It is a complex process involving chemical reactions, heat and mass transfer and complex flow dynamics. UCG utilises injection and production wells, drilled from the surface and linked together in the coal seam. Once linked, air and/or oxygen are injected. The coal is then ignited in a controlled manner to produce hot, combustible syngases [a mixture of CH4(methane), CO (carbon monoxide), CO2 (carbon dioxide) and H2(hydrogen)] which are captured by the production wells. The syngas is brought to the surface and cleaned for power generation and liquid hydrocarbon fuel. In the current national energy scenario, coal provides the best alternative to overcome the energy crisis for supporting economic development. After the conversion of coal to syngas, there are two possibilities. One is the utilisation of syngas as alternative of natural gas after purification; and second is conversion of syngas to diesel fuel through gas to liquid route. The aim of this project is to utilise huge reserves of Thar coal to overcome the energy crises in Pakistan by converting gas into liquid fuel in an effective manner.

Copyright Business Recorder, 2011

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'Thar coal reserves to generate 1,000MW electricity for 30 years'

Member of the Science and Technology Planning Commission Dr Samar Mubarakmand on Monday said that at least 1,000 megawatts could be generated out of Thar Coal reserves. Talking to a private news channel, he said that at least, dollars 115 billion were required to materialise this project. He added that Thar contained 175 billion ton reserves of coal, out of which 1,000 MW electric power might be gennerated for the next 30 years To a question, he said Thar coal project would become operational in December 2013 and bring prosperity in the country. "Pakistan has enough coal reserves that can provide electricity to the country for more than 500 years," he said. He said that development work was in progress and the first 50 MW gasified project had almost been completed. He said the project was to cost Rs 8.898 billion with a foreign exchange component of Rs 5.847 billion that was approved by the Executive Committee of the National Economic Council last year. To another question, Dr Mubarakmand said the success of the Thar coal project would lead to investment from leading international companies.

Copyright Associated Press of Pakistan, 2011

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Sindh power generation policy: President for inviting bids for short-term projects

Presiding over a briefing moot on the Sindh power generation policy Thursday at Bilawal House here, President Asif Ali Zardari called for inviting bids for short-term energy projects, open competitive bidding, involving private sector experts for evaluation and adoption of public-private partnership model by the provincial government, contributing land to become partner in the project. The briefing was attended by Sindh Governor Dr Ishrat-ul-Ibad Khan, Chief Minister Syed Qaim Ali Shah, Federal Minister for Power Syed Naveed Qamar, Federal Minister for Petroleum Dr Asim Hussain, provincial ministers, Secretary General to the President Salman Farooqui and senior officials of the federal and provincial governments. Briefing the media persons Spokesperson Farhatullah Babar said that the President directed that the power projects identified under the short-term measures of the provincial power policy should be implemented without delay so as to provide some immediate relief to the energy starved people of the province. He said that Sindh power policy comprised three phases namely short-term, medium term and long-term. The short-term projects will be completed in 12 to 18 months. These projects encompass wind, solar and biomass power projects, solar water heating, captive power projects within industrial zones, power projects on dormant and abandoned gas fields, he said. The meeting was informed that in collaboration with China the provincial government had already identified two potential small hydro projects downstream of Sukkur Barrage under its short-term measures, which will generate about 10MW at two different locations. The projects will cost dollars $20 million. The President said that bids should be invited for the projects identified under the short-term measures by placing advertisements in leading newspapers and the request for proposals (RFPs) for each project be finalised and offered to investors. The medium-term energy projects in Sindh would be implemented during the four-year period 2013-2017, he said. These included power projects on new found gas fields in the province as well as power projects based on Thar, Lakhra and Sonda coalmines. It also envisages acquisition of PEPCO power plants located in the province through privatisation and long-term lease besides development of wind, solar and biomass power projects, he said. The long-term power policy envisages projects which will be implemented in the years beyond 2018, he said. President's Spokesperson Farhatullah Babar said that the President directed that the implementation mechanism should be based on open competitive bidding and standardised terms of reference. The evaluation criteria should be clearly laid down and communicated to the bidders and the evaluation team should comprise experts from the private sector as well. The President also advised the provincial government to consider adopting the public-private partnership for development of its energy projects by contributing land for the projects, he said.

Copyright Associated Press of Pakistan, 2011

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Romanian firms invited to invest in Thar Coal Blocks

The federal government has invited the Romanian mining companies to invest in Thar Coal Blocks, during a meeting held between a business delegation of Romania and Chairman Board of Investment (BOI) Saleem H. Mandviwalla, here on Thursday. An official of the BOI said that as per government's policy, China has been granted one Thar Coal Block for coal mining out of total 10 Blocks. Four Blocks have been reserved for local mining companies and rest of the five Blocks are being offered to foreign investors. Titus Corlatean, President of the Foreign Policy Committee-Senate of Romania along with a business delegation called on Saleem H. Mandviwalla Minister of State/Chairman, BOI on Thursday. Mandviwalla said that Romania could avail attractive investment opportunities in the coal mining sector in Pakistan. Pakistan's coal potential estimated at 185 billion tons and current consumption of coal is 11.0 million tonnes per annum against annual production of 5.0 million tons, while the supply & demand gap of about 6.0 million tons of coal is being met through imported coal. He further informed that at Thar Coal Blocks are available for investment. Talking about the pharmaceutical sector, he informed, Pakistan is a developing pharmaceutical market with an export vision of $500 million by 2013. About 400 pharmaceutical manufacturing units including 25 multinationals are meeting around 70 percent of the country's demand of finished medicine and they wanted to boost the exports. Senator Titus Corlatean informed the chairman that European Union desires to reduce trade barriers and increase investment co-operation with Pakistan. He added that there is a great need to harness the investment potential in favour of both Pakistan and Romania. He also invited Pakistani investors to explore opportunities of mutual interests in Romania. Carol Ambrus, member of the chamber of commerce and industry Brasov County/ Governor of Brasov said that Romania is interested to invest in the coal and mining sector of Pakistan and there is also a need to identify and explore opportunities in the field of sunflower seeds, copper cathodes, organic chemicals and dyes, textile and textile goods, agriculture products, leather goods, IT, etc.

Copyright Business Recorder, 2011

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Transformers, grid station equipment: EC and Iranian companies' cooperation under study

Pakistan and Iran are considering a proposal of co-operation between Heavy Electrical Complex (HEC) and Iranian companies for manufacturing of high module power transformers and grid station equipment to meet the future needs of power sector, it is learnt. Sources said the technical groups of two countries have recently discussed the objectives to enhance the capabilities for manufacturing & designing of high rating and capacity power transformers and grid station equipment to become competitive technically as well as commercially not only to meet the domestic demand but also exploit opportunities in global export market. The locations of the manufacturing would be HEC, Industrial Estate Hattar Dist, Haripur. The government of Iran would recommend Iranian JV as partners. The government of Pakistan is planning to establish new power stations to meet the shortfall of electricity in the country. Joint venture between HEC and Iranian companies would result in increased demand of high module power transformers and other equipment for grid stations. According to the proposal, considering emerging market, it is essential to acquire technological assistance to upgrade capabilities in the areas of Designing and Manufacturing of Power TIFs of 40 MVA - 132/11.5 kV, 160 MVA - 220 kV & 160 to 200 MVA - 500 kV as well as to manufacture the grid station equipment such as Metal-oxide surge arrestors, isolators, circuit breakers, capacitor bank, current transformers, voltage transformers. The implementation of the project will help train HEC professionals in the areas of designing, manufacturing, testing, quality control, etc. The overall benefit of co-operation between the two countries in the field of manufacturing of high power transformers would lead to acquisition and assimilation of advance technology for manufacturing of heavy electrical equipment to develop high technology base. This joint venture would ensure smooth implementation of Wapda and Pepco programme for expansion and augmentation of electricity transmission and distribution network. This would help in enhancing the capabilities for manufacturing and designing of power transformers and grid station equipment at the HEC. The HEC is manufacturing power transformers to meet requirements of Pepco & KESC.

Copyright Business Recorder, 2011

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Coal mining, power generation project: MoU signed with Chinese company

Sindh Chief Minister Qaim Ali Shah said on Monday that the government has assigned top priority to develop coal mining, coal-based power generation and other uses of coal by offering most attractive fiscal incentives. Speaking at the signing ceremony of a Memorandum of Understanding (MoU) for coal mining and power generation project, he said that production of coal would start within three years, and power generation of 900 MW is expected by 2014. The MoU was signed for mining and power generation in Block-1 of Thar coal field with a known Chinese firm, Global Mining Company. The Chief Minister said that maximum consideration has also been extended towards protection and guarantees to the investors in te coal sector. "These projects are seen as vital for Pakistan's energy security besides having the potential to turn the economy of the country around," he added. Qaim said that Sindh has huge reserves of coal, out of which 175 billion tons are located in the Thar coal fields. He appreciated the planned investment in the mega project and said that the government would provide all possible help and facilitation to the Chinese company for coal mining and power generation project. Chairman of Sindh Board of Investment (SBI) Zubair Motiwala, giving details of the MoU as well as the project, said that the provincial government had initiated the process of international competitive bidding for allocation of various blocks of Thar coal field in December, 2010. It was after detailed deliberations and due diligence, that the 'Thar Coal and Energy Board' had allocated Block-1 of Thar coal fields, having area of 122 sq km, to the Global Mining Company (GMC) of China, he added. He said the GMC intends to develop coal mine of 5 million tonnes/annum initially, and power generation of 900 MW to be scaled up to 2100 MW with an initial investment of amount $3.0 billion. The Chinese firm is also willing to invest $1.5 billion in key infrastructure projects. Liyang Liu, CEO of Sino-Sindh Resources, a local subsidiary of Global Mining Company, thanked the government of Sindh for allocation of Block-1 of Thar coal field. He assured that the Global Mining Company would complete the feasibility study within six months, and ground-breaking ceremony of mine construction would be held in the first week of April, 2012.

Copyright Associated Press of Pakistan, 2011

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Electricity import project: Iran requested to expedite acceptance of Nespak report

Pakistan has reportedly requested Iran to expedite the process for acceptance of economic and financial report prepared by Nespak with respect to 1000MW electricity import project, costing $655 million. Sources said that the matter was discussed during the two days meeting of Pak-Iran Joint Economic Commission here last week and the Ministry of Water and Power requested the Iranian side to expedite their acceptance as design memorandum will be finalised by M/s Nespak of Pakistan on receipt of the acceptance from TAVANIR of Iran. A report on economic and financial analysis was sent by Nespak to TAVANIR in January 2011 and M/s TAVANIR requested for incorporating comments particularly linking fuel prices with gas price formula. Nespak reviewed and "Revised Supplementary Report on Economic and Financial Analyses" was sent to TAVANIR on 30-05-2011 for acceptance. The objective of the feasibility study was to investigate and determine the technical and economical viability of proposed electrical interconnections between NTDC of Pakistan and TAVANIR of Iran and accordingly identify alternative schemes to interconnect their electrical networks considering the existing and future planned interconnections and to achieve an import capacity of 1000 MW via an AC or DC link between both networks. The next step would be to activate functions of project steering committee/monitoring committee, engagement of financing, tariff negotiations and hiring of project consultants. The total cost of the project is US $655, 588, 000 of which Iranian side portion is US $250,456,000 including Converter Station and Switching Station at Zahedan US $212,351,000 and Lot-I Zahedan-Mirjaveh (Pak-Iran Border) 500kV Bi-Polar D/C T/Line 93-km US $38,105,000. The cost of Pakistan side portion is $412, 160,000 including Converter Station and Switching Station at Quetta US $212,351,000 and Taftan (Pak-Iran border)-Quetta Section 500kV Bi-Polar D/C T/Line 585-km US $199,809,000. The Minister for Water & Power and the Minister of Energy of Iran signed Memorandum of Understanding (MoU) on April 18, 2007 at Tehran. The agreement was signed by M/s Nespak, Pakistan and M/s Moshnir, Iran on April 13, 2009 to carry out the feasibility study of the project.

Copyright Business Recorder, 2011

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South Asian countries to promote power links

South Asian nations agreed on Thursday to work to promote closer energy links for electricity grids and power generation, a senior energy official said. Energy ministers from the South Asian Association for Regional Co-operation (SAARC) - bringing together Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka - finished their meeting on Thursday. "To implement the decision a framework will be finalised by October this year," said Mohammad Abul Kalam Azad, Bangladesh secretary for power division. Bangladesh's Prime Minister Sheikh Hasina told the meeting that SAARC members were politically committed to solve electricity shortages. She said that in this spirit Bangladesh was working on the SAARC grid interconnection between Bangladesh and India. "As this interconnection is established, it would be easier to establish connectivity with other SAARC member countries," she said. She added that Bangladesh planned to produce 20,000 megawatts of electricity by the year of 2021. Mohammad Mejbahuddin, secretary of the energy and mineral resources division, said that Bangladesh is working on power links with India and Myanmar. "If we can utilise hydro power potential in Bhutan, Nepal and Myanmar we could be self reliant on clean energy," he said. "The politico-economic developments in the world have placed energy security under the global spotlight," Mejbahuddin said. He said that energy price peaks had wreaked havoc with Bangladesh's economic stability. Azad confirmed that Bangladesh would be able to import electricity from India by the early of 2013. He told reporters after the fourth SAARC energy ministers meeting that in the region "we have natural gas, hydro power, coal and the expertise to generate renewable energy and if we can explore those potentials and can share effectively then will be able to reduce poverty, the ultimate goal of the nations."

Copyright Reuters, 2011

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Warsak power station rehabilitation: Wapda awards Rs 317 million feasibility contract

The Water and Power Development Authority (Wapda) has awarded a contract to a joint venture comprising RSWI of Canada and DCE of Pakistan to carry out feasibility study for 'Rehabilitation, Upgradation and Modernisation' of 243 MW Warsak Hydroelectric Power Station. The contract also includes preparation of detailed design, tender documents and PC-I of the project. Total cost of the consultancy services agreement is about Rs 317 million, including foreign exchange component of the Canadian dollars 3.343 million. The assignment is scheduled to be completed in one year. The agreement signing ceremony was held here at Wapda House. Wapda General Manger (Hydel) Development Muhammad Javed Akhtar, RSWI Asia Vice President Claudio Vissa and DCE Managing Director Mujeeb Ahmad signed the agreement on behalf of their organisations. The ceremony was also witnessed by Trade Commissioner, High Commission of Canada, Islamabad, Ahsan-ul-Haq, Wapda Member (Water) Raghib Abbas Shah, Member (Power) Muhammad Qasim Khan, Member (Finance) Nazakat Ali Shah, Wapda Secretary Muhammad Imtiaz Tajwar and other Wapda officers concerned. As part of its least-cost energy generation programme, Wapda plans to carry out rehabilitation, upgradation and modernisation of electrical and mechanical equipment of Warsak Hydroelectric Power Station to ensure its reliable and sustainable operation at the total installed capacity of 243 MW. The electrical and mechanical equipment of the existing units having spent 50 years (Units 1-4) and 30 years (Units 5-6) of their useful life, have deteriorated due to aging effects resulting in reduction of reliability and dependability. As a first step, feasibility study will be carried out to determine viable solutions and required works for rehabilitation, upgradation and modernisation of old electrical & mechanical equipment, recommend remedial measures to overcome the defects in civil structures and conduct sedimentation management studies. Preparation of detailed design, tender documents and PC-I of Warsak Rehabilitation Project will also be a part of the consultancy services. It is pertinent to mention that Warsak Hydel Power Station is located on River Kabul at about 30 kilometres in north-west of Peshawar. The project, financed by the Canadian Government, was completed under Colombo Plan in two phases. The first phase, completed in 1960, consisted of construction of dam, irrigation tunnels and installation of four power generating units, each of 40 MW capacity with 132 KV transmission system. Two additional generating units each of 41.48 MW capacity were added in 1980-81 in the second phase. The total installed capacity of the power station thus became nearly 243 MW.

Copyright Business Recorder, 2011

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Pakistan keen to import 2,000 megawatts power from Iran: bilateral trade to be enhanced to $5 billion

Pakistan on Wednesday expressed desire to import 2000 MW electricity from Iran to meet the growing requirement of electricity as both sides wanted to enhance annual bilateral trade to $5 billion from the current $1.5 billion, through co-operation in various fields. Finance Minister Dr Abdul Hafeez Shaikh and Iranian Foreign Minister Dr Ali Akbar Saleh on Wednesday inaugurated 18th Session of the Pakistan-Iran Joint Economic Commission (JEC). Both sides would discuss the ways and means to enhance co-operation and decision taken during the JEC at a news conference on Thursday. Hafeez said that Pakistan would discuss the modalities for import of 2000MW electricity from Iran during the meeting. He said that Pakistan is working on a fast track basis to build infrastructure for import of gas from Iran. He said that JEC Session would comprehensively review bilateral trade, expansion in the scope of PTA, expansion in trade relation in the area of goods and services, diversification of exports and trade routes, Quetta-Taftan rail link completion, early completion of gas import infrastructure and import of 2000 MW power from Iran. The Minister said that private sectors of the two countries would be instrumental in expansion of trade, investment and economic relations and this meeting is progress in this regard. The Finance minister also invited Iranian investors to take advantage of investment opportunities being offered by Pakistan in the field of infrastructure, ports development, joint shipping line, mining and other sectors of the economy as Pakistan has best investment incentive regime in the region. Dr Ali Akbar Saleh said that both Pakistan and Iran share long economic border and his country could help Pakistan in energy sector and enhancing co-operation in every sector with Pakistan was the desire of Iran. He said that vast potential of economic co-operation between the two countries could only materialise through joint efforts and creating conducive environment. Iranian Foreign Minister said that through continued efforts both countries could build better future and bring about prosperity for their people. He said that both Iran and Pakistan are major victims of terrorism, which could be addressed by tackling its root causes.

Copyright Business Recorder, 2011

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