14TH INTERNATIONAL EXHIBITION FOR THE ENERGY INDUSTRY

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

News Headlines for the month of
JANUARY 2012

EAD, NJHPC sign accord to make $40 million Kuwaiti loan effective

The Economic Affairs Division (EAD) and Neelum Jhelum Hydropower Project Company (NJHPC), on Monday signed Subsidiary Loan Agreement that was a legal requirement to make the loan agreement between Kuwait and Pakistan effective. A loan agreement amounting to dollars 40 million was signed between Pakistan and Kuwait Fund for Arab Economic Development (KFAED) on 25 November 2010 for the purpose of construction of Neelum Jhelum Hydropower Project. "Signing a subsequently Subsidiary Loan Agreement between EAD on behalf of the government of Pakistan and NJHPC, a subsidiary of Water and Power Development Authority (Wapda), was a legal requirement to make the loan agreement effective," EAD Secretary Abdul Wajid Rana said. The agreement was signed by EAD Secretary Abdul Wajid Rana and NJHPC Chief Executive Officer (CEO) Lieutenant General Muhammad Zubair (Retd). The Neelum Jhelum Hydropower Project is located at Muzaffarabad district of Azad Jammu and Kashmir and upon its completion it will generate approximately 1,000 MW of electricity. KFAED is one of the donors of this project, the other donors are Exim Bank China, UAE and Saudi Fund for Development. The project is aimed at developing the National Power Generation System to meet the increasing electricity demand in the country and indigenous renewable energy resources ie the hydro resources. Speaking on the occasion, EAD Secretary said that negotiation with China were also going on for the funding of the project and expressed the hope that with the release of dollars 40 million, the cash flow issue would be resolved to a great extent. On the occasion, the NJHPC's CEO said that 36 percent of the work on the project had been completed. He said the Tunnel Boring Machine (TBN) had also reached Pakistan which would reach the cite project within 20 days. He said that after completion of NJHPP, the machine would be utilised in other projects. He said the cost of the project had been increased up to dollars 330 billion due to depreciation in rupee value against dollar and several other market issues. He said that when completed, the project would generate Rs 45 billion. Speaking on the occasion, Water and Power Secretary Imtiaz Qazi said that government was focusing on development of hydel and coal power projects. He said that owing to high energy cost and shortage of gas, the thermal electricity was getting out of reach and that was why the government was paying heed towards developing hydel and coal projects. He said that with the inclusion of additional power in the national grid system, the power shortage crisis would be overcome within three years. He said Pakistan was also engaged in negations with central Asian countries to import electricity, adding that a Pakistani delegation was in Almaty at present to discuss the import of power from the Central Asian countries. Copyright Associated Press of Pakistan, 2012

Copyright Associated Press of Pakistan, 2012

Top

Neelum Jhelum Hydropower Project: agreement for $40 million Subsidiary Loan signed

An agreement for Subsidiary Loan of $40.00 million was signed on Monday between EAD and Neelum Jhelum Hydropower Project Company. Abdul Wajid Rana, Secretary EAD represented Government of Pakistan, while Lieutenant General Muhammad Zubair (Retd), Chief Executive Officer represented NJHPC. A Loan Agreement amounting to $40.00 million was signed between Government of Pakistan and Kuwait Fund for Arab Economic Development (KFAED) on November 25, 2010 for purpose of construction of NJHP. Signing a subsequently Subsidiary Loan Agreement between Economic Affairs Division on behalf of the Government of Pakistan and the NJHPC a subsidiary of Water & Power Development Authority was a legal requirement to make the loan agreement effective. The Neelum Jhelum Hydropower Project is located at Muzaffarabad district of AJK. Upon completion it will generate approximately 1,000MW of electricity. KFAED is one of the donors of the project the other donors being Exim Bank China, UAE and Saudi Fund for Development. The project aims at developing national power generation system to meet the increasing electricity demand in the country and indigenous renewable energy resources namely the hydro resources.

Copyright Business Recorder, 2012

Top

Rural Electrification Programme: 49 villages in Sindh energised through solar power

Around 3000 homes in 49 villages of Sindh Province have been energised so far through use of solar energy under Rural Electrification Programme. A PC-I for electrification of 300 villages of Balochistan have been approved and will be executed on availability of funds under the programme launched Alternate Energy Development Board (AEDB) for remote areas in the country. An official source on Sunday said the Board, mandated to facilitate private sector to develop Alternative and Renewable Energy (ARE) including wind, solar, waste to energy, hydro etc., had also initiated Parliamentarians Sponsored Village Electrification Program (PSVEP) funded from the development budget of the legislators. Under this Programme, the official said two schemes have been implemented with the cost of Rs 48 million while proposals (after completing the feasibility studies) for 23 schemes, costing Rs 1.655 billion have been submitted for approval and release of funds. He said feasibility is being conducted for another 10 schemes, are at various stages of development. Enumerating details of other projects, the official said with the main objective to reduce the demand and dependence on national grid through solar energy, AEDB has undertaken a programme with the assistance of World Bank for Efficiency Improvement of Existing Tube-wells and Introduction of Renewable Energy for Ground water Pumping for Multiple Uses in Pakistan. In order to promote wind energy, the Board issued 38 LOIs with an average capacity of 50MW each (5MW to 250MW). These projects are at various stages of development and implementation. He said on ground work on 3 x 50MW wind farms has started, and 400MW is expected to achieve financial close in 2012 under the policy and added fast track policy and feed-in-tariff have also been announced which are expected to yield another 1000MW. In solar area, eight LOIs for Solar PV parks have been issued to different IPPs while in Biomas/Waste to Energy area, three LOIs issued to private investors for one project in Punjab and two in Sindh. Moreover, he said 103 micro hydel projects (15MW) initiated in Chitral (Khyber Pakhtunkhwa) and Gilgit-Baltistan area with UNDP-GEF collaboration while 8 Hydro Power Projects have been initiated under the Renewable Energy Development Sector Investment Programme (REDSIP) with the support of ADB.

Copyright Associated Press of Pakistan, 2012

Top

BQATI, KESC to set up 5-year energy plan for Bin Qasim

Bin Qasim Association of Trade and Industry (BQATI) held a luncheon meeting at a local hotel recently in honor of Tabish Gauhar, Chief Executive Officer, Karachi Electric Supply Company (KESC). The event was marked with the purpose of strengthening the existing cordial relations between KESC and BQATI. The occasion was the first official, interactive event between the executives of both the organizations, paving way for similar fruitful forums in the future. On the occasion, the guest of honor, Tabish Gauhar and host, BQATI, Patron in Chief, Mian Muhammad Ahmed agreed to collaborate on a five year comprehensive energy plan for the industrial area. The KESC CEO, also announced that a ‘KESC Help Desk’ would be established at the BQATI office, the aim of which would be to provide BQATI members priority resolution to their power related complaints and establishing a window for issuance of new connections. Amongst other matters of mutual interest, discussion on the prospect of establishing of a new grid station at Bin Qasim was also discussed.Speaking at the meeting, the guest of honor thanked the hosts and appreciated their positive approach towards understanding the ground realities and extraneous factors leading to limitations on both ends, the respect of which can lead towards finding amicable solutions. He termed the trade and industry sector as KESC’s best customers and said, that the power utility has approximately a 99 percent recovery ratio on current bills from the industrial sector, while line losses were also low compared to sectors. In order to promote an air of understanding and mutual respect, the CEO, described the challenges in details, being faced by the power utility and highlighted those aspects where the support of the industrial consumers would go a long way towards reaching a solution to the current problems. He also spoke on the realities, oft clouded by various myths, especially on the subject of power generation, fuel mix used by the utility (gas vs furnace oil), and other factors on which KESC is unduly criticized by various elements of the society, while overlooking the facts. Also sharing on the occasion, he pointed out the resistance faced by KESC in recovery of power dues from domestic, commercial and public consumers, leading to massive cash flow issues for the utility, on top of the ever increasing burden of circular debt.

Copyright Frontier Post, 2012

Top

Thar coal project to provide relief to common man: Dr Samar

Member of the Science and Technology Planning Commission, Dr Samar Mubarakmand said on Tuesday that Thar coal project will be beneficial for common people and free from all defects. Talking to PTV, he said the Prime Minister Gilani had directed to expedite Thar-Coal project which would become operational from December 2013. Dr Mubarak said the success of the Thar coal project would lead to investment from the leading international companies. With the completion of coal-fired power generation project, the nation would get cheap and sufficient power supply which would resolve the current energy crisis, he said. He said that gas shortage would end within a year through coal reserves. He said the country had enough coal reserves through which it could daily produce 50-60 million cubic feet gasifier which would end gas shortage from the country. Dr Samar said it was for the first time in the country that the coal gasification was being launched on commercial basis and abundant and cheap electricity would be available.

Copyright Associated Press of Pakistan, 2012

Top

'Integrated Energy Model' workshop held

Keeping in view the ongoing energy crisis being faced by Pakistan, a workshop on 'Pakistan Integrated Energy Model' was held here at Planning Commission Auditorium on Tuesday. The workshop was chaired by Dr Nadeemul Haque, Deputy Chairman Planning Commission attended by the key players of energy sector" both from public and private sector. It was highlighted in the workshop that due to lack of co-ordination between two energy ministries ie Ministry of Water and Power (MoWP) and Ministry of Petroleum and Natural Resources (MPNR), is contributing more to energy crisis. To overcome the energy crisis, an energy think tank Pakistan Energy Research and Information Centre "PERIC" was proposed in the workshop. While supporting the concept, Dr Nadeemul Haque remarked, "I fully support the vision to set up PERIC as a reputable centre of excellence for energy, which is self-financed and financially sustainable. PERIC will create enabling environment for development and dissemination of integrated energy sector analysis and studies for sustainable solutions, and development of Pakistani expertise and intellectual skills in specialised areas and promotion of international best practices."-PR

Copyright Business Recorder, 2012

Top

New economic strategy needed based on energy sector reforms

Renowned economists and finical experts have said that a new economic strategy based on energy sector reforms, infrastructure improvement and encouragement of foreign investment is necessary for economic revival of the country. They said the required economic strategy should also include increase in exports, special focus on agriculture and Small and Medium Enterprises (SMEs), austerity measures and technical training of youth human resource. Former finance minister Senator Ishaq Dar, former State Bank governor Shahid Kardar, Lahore University of Management Sciences Vice Chancellor Prof Adil Najam and others made these recommendations while addressing the ‘International Conference on Testing Times: Reflections on Present and Future’ organized by the Institute of Chartered Accountants of Pakistan (ICAP) in connection with its two-day Golden Jubilee celebrations, which concluded here at a local hotel. Senator Dar said that socio-economic problems of the country were getting from bad to worse, as 73 percent people of Pakistan were living below poverty line because they are earning less than $2 a day. He said that government borrowing from central bank must be stopped in order to avoid further devaluation of the rupee in the market. “The government is borrowing a huge sum of money for their ‘merriment’.” He said the government was printing new currency notes at 15 percent for their ‘merriment’ and hence it was not possible for a governor state bank like Kardar to continue working smoothly under such circumstances. The senator said that there was a dire need of implementation of the decisions of Supreme Court to establish rule of law and get the country out of political and economical crisis. He said in 1993 tax-to-gross domestic product (GDP) ratio was 14 percent, which has now dropped to 8.58 percent, which was quite low considering the population growth rate of around 2.3 percent. He said it was very necessary to increase tax-to-GDP ratio at least up to 14 percent for economic revival. About energy he said, although it was a very serious crisis but getting out of it was really possible. “I can count around 2,000 megawatts (MW) production potential, which is not tapped due to lack of political will.” He said for the 420 MW project of Nandipur the equipment was not provided and the project is rotting in Karachi. The government has also lacked any will to help start another 500 MW project with the help of a Chinese company at Chicho Ki Malyan and the Neelam-Jhelum project is another example. Former governor SBP Shahid Kardar presenting his research paper on ‘Economic Turmoil: Paradigm Shift in Global Economic Order’ said, following the serious global economics crisis, many countries were now focusing on reducing external debts and selling products and services to other countries in order to support their economy. He said Pakistan tried to help cope with the trade deficit by printing new currency notes, which was not at all the solution to the problem. He said that tax-to-GDP ratio was falling to 8.58 percent and it was amazing that during last fiscal year only 550,000 people filed tax returns. He said unfortunately we remained looking towards foreign aid like Kerry-Lugar Bill and could not focus on our internal issues. He said power sector was causing a loss of Rs 1.2 billion per day while railways was causing Rs 200,000 per day and the PIA around Rs 70 million a day. He said we needed to attract foreign investment and focus on remittance besides giving a special emphasis on the training of our 100 million youth aged between 15-25 years, which was the real hope for the country. LUMS Vice Chancellor Prof Adil Najam urged that Pakistan needed to focus on energy, life sciences, knowledge economy and its population strength. He said that this was the age of ideas and innovations as there was tremendous potential in Pakistan in this regard. He said that China and India have made their population’s weakness their strength focusing on the principles of consumerism.

Copyright Pakistan Observer, 2012

Top

PAEC plans to set up nuclear power plants in Sindh: SA told

Pakistan Atomic Energy Commission (PAEC) has planned to set up new nuclear power plants in Sindh - one having a capacity of 1000 MW in Karachi near Kanupp, Sindh Electric Power Minister Shazia Marri told Sindh Assembly on Friday. She said that work on the project was expected to start in 2012-13 and it would complete within seven years. Replying to members' questions, she said that PAEC was also searching for a plot to install a nuclear power plant in Sukkur. She further said that the PAEC was planning to set up a total of 8800 MW of power projects across the country by 2030. However, she declined to answer whether the PAEC's nuclear power plants after completion would be handed over to Sindh or not, saying the question was premature to be replied at this moment. Regarding KESC's excess billings, she showed ignorance whether it was unlawful or not, saying there was a prescribed procedure which ultimately leaded to court hearing of such cases and the judiciary had to decide its legal aspects. She said KESC did not provide the government's department the information about the board members, but she informed the house that there were three federal officials on the private company's board. To a question, she said Wapda had four power projects on River Indus including Jinnah Hydropower Project, Chashma Hydropower Project, Taunsa Hydropower Project and Guddu Hydropower Project. She said work on Jinnah Hydropower Project was in progress and it would become operational by December 2012 and Chashma Hydropower Project was operational since 2003. She added the Wapda had completed feasibility study of Taunsa Hydropower Project, which had been handed over to the Punjab Government. "It is located on Taunsa Barrage," she said, adding that Wapda had conducted feasibility study of Guddu Hydropower Project in 1990 but not handed over it to the Sindh Government. Marri said the Sindh government had singed a document of intent with China's Three Gorges Project Corporation (CTGPC) for development of hydropower projects in the province. She said a team of Andrits Hydropower, Austria had visited Sukkur to explore the possibility of setting up a power project at Sukkur Barrage. "They have submitted a preliminary report containing the Commercial Draft Proposal and the Technical Proposal for setting up Small Hydropower Projects at Rohri Canal. This is under examination," she told the house.

Copyright Business Recorder, 2012

Top

Hydel generation likely to begin soon

Hydel generation is likely to resume in a day or so, as the Pepco sources said indent has been released for hydel generation that would improve power situation in the country. It may be noted that power supply was short in the country due to canal closure since the last week of December. It was resulting into forced closures, particularly in the industrial sectors in a situation when gas supply on the SNGPL has come down to zero level. Meanwhile, thermal generation has again come down to below 8000MW with short supply of fuel, said sources. However, they added in the same breath that funds have been released by the federal government for purchase of furnace oil and situation is likely to improve ahead.

Copyright Business Recorder, 2012

Top

Power system, barrage: ADB to provide $513 million loan

The Asian Development Bank (ADB) will provide a $513 million loan to Pakistan of which $270 million will be for building Khanki Barrage at a new location on River Chenab and the remaining $243 million for improving the country''s power transmission infrastructure. This was announced by Werner Liepach, ADB''s Country Director during a signing ceremony held here on Wednesday. Wajid Ali Rana, Secretary of Economic Affairs Division (EAD) was also present on the occasion. "The new barrage will reduce water leakage and lessen flood risks in an irrigated agricultural area of about 1.2 million hectares, which will in turn help ensure prosperity of a large number of farming families," Werner Liepach disclosed. "Similarly, the power projects to be completed by June 2016 will augment the network and improve performance of the transmission system, which is critical for increasing the overall energy efficiency and bridging the widening energy gap in Pakistan," he added. The new Khanki Barrage on River Chenab in central Punjab will replace the existing headwork built in 1892. The repayments to this concessional loan being given for improvement of irrigation systems would be due within a period of 25 years with a 5-year grace period and the rate of return would be 1.2 percent. The condition of this vital headwork has deteriorated over the years, threatening the water supply to a large area of irrigated plains in Punjab considered to be the country''s breadbasket. Current estimates suggest about 447 million cubic metres of water are losing each year due to the existing barrage''s shutter gates. The new barrage will connect the Lower Chenab Canal with a new head regulator through a lead channel, ensuring a reliable flow of water to the Canal and increasing the flood-bearing capacity of the structure. The new barrage is expected to benefit two million people directly or indirectly, boosting economic activities of more than 568,000 farming families depending on the Lower Chenab Canal, where the average farm size is 2.65 ha (6.5 acres). The Khanki Barrage Project is the second tranche of a $900 million multi-tranche finance facility for the Punjab Irrigated Agriculture Improvement Programme and is funded through the Asian Development Fund. The third tranche of the Power Transmission Enhancement Investment Programme includes expanding of grid stations and laying new inter-provincial transmission lines to upgrade the national grid system. The MFF was approved in 2006 to invest $800 million in priority areas to improve transmission systems and help Pakistan meet its pressing energy needs. Funds for the power sector project come from the ADB''s Ordinary Capital Resource loans.

Copyright Business Recorder, 2012

Top

Renewable energy projects: SBP enhancing scope of financing

In order to curtail the ongoing energy crisis, the State Bank of Pakistan on Wednesday announced that it will enhance the scope of financing facility for setting up of new power projects using renewable energy with a view to promoting the use of renewable energy and meeting the growing electricity demand of the country. It has now been decided that banks/DFIs can also consider financing requests of the sponsors for setting up power projects up to a maximum capacity of 20 MW in cases where only biomass/biogas is used as renewable energy source, keeping in view the terms and conditions of the scheme for financing power plants using renewable energy, according to an IH&SMEFD Circular Letter No.01 of January 18, 2012. Earlier, under the scheme, which was announced by SBP vide its SMEFD Circular No. 19 of December 1, 2009, the financing facility was allowed for setting up of new power projects using renewable energy with a capacity of upto 10 MW.

Copyright Business Recorder, 2012

Top

US promoting investment in energy sector: CG

US Consul General in Karachi, William Martin on Wednesday said the American government is active in promoting US investment, particularly in the energy sector in Pakistan. Speaking during his visit to Karachi Stock Exchange (KSE) here, Martin said the American and Pakistani partner companies have proposals pending with the government of Pakistan to build infrastructure to import liquefied natural gas. "I am sure there are many more opportunities for us to work together," he added. He said Karachi Stock Exchange, is an important symbol of Karachi's role as Pakistan's economic and commercial capital. "It is an honour to ring the bell to start today's trading at this great institution," he said. He said the United States is committed to a strong bilateral relationship and to continuing to strengthen economic opportunities between the two countries. "We applaud the Karachi Stock Exchange Board of Directors for taking the initiative to promote dialogue with regional stock exchanges," he said, adding that this is an important step in assuring that 'Pakistan plays a more significant role in the global economy. "The United States looks forward to exchanging ideas on how we can work together to the benefit of the people of Pakistan through trade and economic growth," he said. "We believe that for trade to grow, it must be as broad-based as possible and not limited to any one sector," he said. There is so much talent in Pakistan, so much economic potential in this great country. Every opportunity to build on that talent must be explored. And Karachi is the place to do it. As the hub of economic and commercial activity, with renowned universities, it is clear that the tremendous potential of Pakistan has barely been tapped, he mentioned. "I am an optimist about Pakistan and its future", he said. It is a country of exceptionally talented people. "Things will improve, and business will lead the way," he said. Business will provide the investments and ideas to help Pakistan realise its unlimited potential, he added. Speaking on the occasion, KSE Chairman Munir Kamal welcoming the guest at the exchange, said the US investors had been very active at the local bourse. "We have seen deep rooted investment of US investors here," he said. He pointed out that the US investors had 80 percent share in the total foreign investment at the bourses. "Now the total foreign investment at the local equity market is around $2 billion," he mentioned. He said that trading activities affected at the local bourse due to economic, political and geo political situation. However, he said things are improving gradually and expressed the hope that the trade will also increase at KSE. Managing Director KSE, Nadeem Naqvi welcomed the guests and briefed them about the overall performance of the Pakistan's premier stock exchange. Earlier, the US Consul General rang the traditional opening bell at the main trading hall of the KSE. The trading session began on the ringing of the bell. Later, the US Consul General had a meeting with the KSE board of directors and discussed issued related to economy.

Copyright Business Recorder, 2012

Top

Naveed Qamar discuses electricity import from Central Asian countries

Federal Minister for Water & Power, Syed Naveed Qamar, held a meeting with Dr. Hazrat Omar Zakhailwal, Minister for Finance of Afghanistan Tuesday to discuss cooperation between the two countries on electricity import by Pakistan from Central Asian countries via Afghanistan. Afghanistan, the KyrgyzRepublic, Pakistan and Tajikistan have been pursuing the development of electricity trade through the establishment of a Central Asia-South Asia Regional Electricity market (CASAREM), says a press release. A cross border transmission line project has been proposed for the construction of dedicated link essential aimed at supplying 3300 MW of surplus hydro power available during summer months from the KyrgyzRepublic and Tajikistan to Pakistan via Afghanistan. This transmission line project is termed as CASA-1000 project. The four countries have signed an Inter-Governmental Agreement (IGA) on August 4, 2008 at Islamabad for the development of CASAREM and CASA-1000 project. The project is expected to be completed at a total cost of US$ 873 million and is expected to be commissioned in 2016. An inter-Governmental Council (IGC) with membership at the level of Deputy Ministry or higher has been established with its Secretariat in Kabul. The main objective of the IGC is to facilitate the implementation of the project and to oversee compliance with project activities and agreements. After remaining dormant for three years, the project was revitalized this year when Afghanistan, KyrgyzRepublic and Tajikistan signed an MOU at the IGC meeting at Bishkek, Kyrgyzstan on September 20, 2011. However, Pakistan only initialled the MOU but has since been approved by the Federal Cabinet on November 16, 2011. Under the Bishkek MOU, each country is required to establish a national Working Group dedicated to implement CASA-1000 project. Pakistan has established its most active national Working Group. The four national Working Groups are engaged jointly since the last two months to streamline the project management infrastructure, securing funding of the preparatory activities, designing project implementation structure, preparing implementation schedule, consideration of necessary draft agreements, technical details including standards and specifications, definitions of custody transfer point, seller(s)-buyers(s) relationship, review of the feasibility study done by SNC Lavalin in 2010, etc. Two meetings of the Working Groups of the four countries have been held on 15-16 November at Dushanbe, Tajikistan and 28 December by Video Conference. The next meeting is scheduled in the held at Almaty, Kazakhstan on 30 January to 2 February 2012. During the preparatory phase which is expected to last 12 to 18 months, the World Bank, IFC, Islamic Development Bank & USAID are providing financial and technical assistance. The two Ministers agreed tot he preparatory activities of CASA-1000 project and to remove problems if any.

Copyright APP (Associated Press of Pakistan), 2012

Top

Consortium claims $10b interest in Thar coal

A group of firms based in the United States claims to have formed a consortium that will look to raise up to $10 billion to invest in coal mining, electricity generation, and fertiliser manufacturing in the Thar desert in Sindh. Representatives of the TharPak Consortium met with government officials at the Pakistani Embassy in Washington DC on January 5 to introduce their consortium and announce their intention to explore and invest in the coalfields in Thar. The consortium’s plans for Thar sound ambitious. TharPak wants to set up a “mega energy complex” in Sindh that would mine about 100 million tons of coal per day to feed a Direct Coal-to-Liquids plant that could replace up to 80,000 barrels per day of oil imports. In addition, the complex would include power generation capacity of up to 6,000 megawatts as well as a fertiliser manufacturing facility that would have an as yet unspecified capacity to produce urea. The consortium claims that these industrial processes will be supported by a carbon capture and storage program, and a liquefied carbon dioxide production and transportation system for sale to enhanced oil recovery projects. “With Pakistan’s energy deficit in mind, we believe that with the combination of our deep mining and engineering expertise and the use of commercially proven clean coal combustion technologies, TharPak will deliver a solution to what is holding Pakistan back from competing on a level playing field in the global economy; dependable, abundant and affordable energy,” said Steve Carpenter, business development director for the consortium. TharPak officials seem aware of the scale of their proposal. “When fully built out, the cumulative capital investment for the lignite mining operations alone will likely exceed $10 billion,” said Hans Naumann, TharPak’s chief engineer. Addressing some of the scepticism about the willingness of foreign investors to put up that much money in Pakistan, an official close to the development of the consortium – who asked not to be identified – said that TharPak had the credentials to make the investment.

Copyright Express Tribune, 2012

Top

Four billion additional units of electric power generated in fiscal year 2010-11: Wapda hydropower annual accounts approved

Pakistan Water and Power Development Authority (Wapda) approved the annual accounts of Wapda Power Wing (Hydroelectric) for the fiscal year 2010-11 in a meeting held here at Wapda House. The meeting presided over by Wapda Chairman Shakil Durrani, was attended by Member (Water) Syed Raghib Abbas Shah, Member (Power) Muhammad Qasim Khan, Member (Finance) Syed Nazakat Ali Shah, Secretary Wapda Muhammad Imtiaz Tajwar and senior officers concerned. General Manager (Finance) Power Anwar-ul-Haq, briefing the Authority, said that Wapda generated about 31.5 billion units of hydel electricity during the fiscal year 2010-11, registering an increase about 4 billion units as compared to 2009-10. This increased hydel generation was made possible due to efficient operation and management of hydropower stations and availability of more water in the reservoirs. It was further briefed that the additional contribution of low-cost hydel electricity by Wapda to the national grid saved about Rs 40 billion to the national exchequer, which otherwise would have been incurred on generating the equivalent quantum of electricity from thermal resources. Wapda hydroelectric also managed to achieve average plant availability factor of 90% because of the timely periodic preventive maintenance of its power stations as well as special maintenance works carried out at Tarbela, Mangla and Warsak power stations. Wile elaborating the details pertaining to income statement, the authority was briefed that the additional revenue earned during the fiscal year was injected to the on-going Wapda power expansion plan including Khan, Allai and Duber Khwars, Jinnah, Jabban and Golen Gol hydropower projects. This will help complete the projects with an accelerated pace and provide relief to the nation in terms of electricity supply at affordable rate. The performance of Wapda Hydel Power relating to operation, maintenance, expansion and finances was also reviewed in the meeting. The Authority, expressing satisfaction over the performance, appreciated Wapda employees concerned for their commendable performance during the year. It is pertinent to mention that Wapda is operating 13 hydel power stations in the cumulative generation capacity of 6,500 megawatt-about one third of the total installed capacity of power system. With a view to improve the ratio of hydel electricity in the national grid, Wapda is executing a least-cost energy generation plan on priority basis. Wapda will add 1,500MW to this capacity through its under construction projects. Besides, Wapda is also executing a number of mega hydropower projects with a cumulative capacity of more than 20,000MW including 4,500-MW Diamer Basha Dam, 1350MW Tarbela 4th Extension, 7,100MW Bunji, 4,320MW Dasu and 740MW Munda hydropower projects etc.

Copyright Business Recorder, 2012

Top

Sindh wants Chinese investment in energy sector: Zubair Motiwala

The Chinese Consul General, Yak Jianming,called on Chairman Sindh Board of Investment (SBI),Muhammad Zubair Motiwala, to offer the services with regards to project in pipeline. A statement issued here on Sunday said that a detail present ationwith regards to MoUs and agreements signed during the visit of high power Pakistani delegation which included Energy Giants M/s China Three Gorges and United Energy Group (Orient Group) were signed. It said that these MoUs were related to establishment of Coal Power Projects in Province of Sindh by China's Three Gorges Corporation (4,000 MW from Thar Coal and 300MW at Sondha District Thatta), Development of 1,000 MW Wind Power Projects in Province of Sindh by China Three Gorges Corporation, Development of Wind Turbine Generators (WTGs) Manufacturing facilities in Province of Sindh by China Three Gorges Corporation and Development of 150-500 MW Wind Power and other investment projects in the Province of Sindh by United Energy Pakistan Limited. The statement said that it was also requested to the Chinese Consul General to look into Shovel ready projects and a list of 15projects which are completed in all manner of documentation where theimmediate investment of Chinese can come. Availing the opportunity, Chairman SBI Muhammad Zubair Motiwala briefed Yak Jianming about the Shovel Ready projects offered by government of Sindh under Public Private Partnership mode which include infrastructure development, development of recreational resorts at Gorakh hill and Keenjhar Lake, mass transit and Solar energy street light projects in Karachi. Development of Special Economic Zone for Chinese Companies was also discussed, where Chinese firms will be allocated a dedicated zone with their own bylaws, rules and regulations. In the end the Consul General of China discussed the problems faced by Chinese investors in Karachi. Zubair Motiwala assured Chinese Consul General for all possible assistance to resolve the problems of Chinese investors working in Sindh.

Copyright APP (Associated Press of Pakistan), 2012

Top

Country's first SNG-powered gas turbine introduced

Dynamic Engineering and Automation have installed country's first SNG (LPG-air mix) system for power generation at Soorty Enterprises in Karachi. The LPG-fuelled system will operate a 5.2 MW gas turbine thus offsetting the shutdown of natural gas. "This is a big diversification in terms of SNG applications as a supplement to Natural Gas", said Owais Mir - CEO of Dynamic. With the current gas scenario Dynamic Engineering & Automation is focusing to address the vision through strategic approach of SNG which is a blend of LPG - as a base fuel and air, and introduced a permanent solution to cater to the natural gas seasonal shutdowns in industries. "SNG provides the Natural Gas user with an alternative in the event of a shut down. It helps to keep the industries and factories running. SNG has today become a reality for industries that find themselves disconnected from Natural Gas", said Owais.-PR

Copyright Business Recorder, 2012

Top

Neelum Jhelum Project: Wapda deploying two TBMs at cost of Rs eight billion

Pakistan Water and Power Development Authority (WAPDA) is deploying two state-of-the-art tunnel boring machines (TBMs) at a cost of Rs 8 billion on the strategically important 969 MW-Neelum Jhelum Hydro-power Project. This will reduce construction period of the project by about 18 months, resulting in an estimated benefit of Rs 60 billion. The two German-manufactured TBMs, being imported by the contractor, are expected to reach Pakistan by the end of this month. Chairman WAPDA Shakil Durrani stated this while briefing the Azad Jammu & Kashmir (AJK) Prime Minister Chaudhry Abdul Majeed and Planning Commission Deputy Chairman Dr Nadeem-ul-Haq during their visit to various components of Neelum Jhelum Hydro-power Project including underground powerhouse, weir site, diversion tunnel, de-sander and main tunnels, etc. Federal Secretary Planning Asif Bajwa, AJK Chief Secretary Muhammad Shahzad Arbab, Planning Commission Member Energy Shahid Sattar, WAPDA Member (Water) Syed Raghib Abbas Shah, Member (Power) Muhammad Qasim Khan and senior officers concerned were also present during the visit. WAPDA Chairman said that Neelum Jhelum Hydro-power Project, scheduled to be completed in 2016, will provide about 5.15 billion units of electricity annually to the National Grid. The annual benefits of the project have been estimated at Rs 45 billion, adding that the project will pay back its cost in about 7 years, he added. Earlier, during the briefing Neelum Jhelum Hydro-power Project Chief Executive Officer Lieutenant General Muhammad Zubair (Retd) said that overall progress on the project stands at 30%. Some 18.5-kilometer long tunnels and adits have so far been excavated, while the crucial diversion tunnel to divert the river Neelum were also completed in October last year in record time of two years. He said that construction work on all the three sites is in full swing. Work on powerhouse is heading as per schedule, while work on transformer hall is ahead of schedule. He also explained the reasons behind cost escalation of the project.

Copyright Business Recorder, 2012

Top

Wind projects in Gharo, Jhimpir: 400 megawatts power to be added by year-end: AEDB

At-least 400 megawatts electricity from two wind projects in Gharo and Jhimpir will be added to the national grid by end of current year. This was stated by Chief Executive Officer of Alternate Energy Development Board, Arif Alauddin while talking to media persons at a reception organised by Energy Update and National Forum for Environment and Health, here on Friday. Observing 2012 as the year for wind energy, Allauddin said, investment commitments of $500 million have been made for energy projects and four wind projects are at advanced stage. Highlighting some ongoing projects, he said that 12 projects have completed their financial close, which includes Zorlu of Turkey, CWE of China, Three Gorges, Fauji Fertilisers, Fauji Foundation, Arif Habib and Lucky Cement. He said that 1,200 MW will be added to the national grid every year from 2013. Replying to a question, Alauddin said that Zorlu will sign a power purchase agreement with National Transmission and Despatch Company this week. He informed that AEDB has a large number of applications from potential investors for windmills to generate 1,600 MW electricity. They have also submitted the surety amount of $300,000, he added. To a question about circular debt, Alauddin said this is not an issue with wind energy projects. He said AEDB has arranged a counter guarantee worth $200 million from Asian Development Bank for the private sector wind projects. ADB has offered $500 million loan for the development of alternate energy projects in Pakistan, which it converted into a counter guarantee for alternative energy projects from private sector at the request of AEDB, and allocated $200 million as an initial step. He added that currently, seven projects are under consideration for this counter guarantee. CEO AEDB said that financing is no more an issue for windmills after this facility. Most of the wind projects are being financed by Habib Bank Ltd, he added. He, however, said that acquisition of land is still an issue, which the AEDB is trying to resolve with the help of Sindh Government. Responding to a question about tariff for wind energy, he said up-front tariff is fixed at 14.66 cents per kilowatt. President NFEH, M. Naeem Qureshi, Dr Qazi Kamal, Chairman Utility Services of Site Association and others were also present on the occasion.

Copyright Associated Press of Pakistan, 2012

Top

'Pakistan can import electricity from Azerbaijan'

Ambassador of Azerbaijan Dashgin Shikarov has said that Pakistan could import electricity from his country to meet its growing power needs. Speaking at a meeting of Karachi Chamber of Commerce and Industry (KCCI), he said that Pakistan could also import oil, gas and lubricants from Azerbaijan. Shikarov emphasised the need of strengthening trade and economic relations between the two countries and establishing units under joint ventures. He said that Pakistan-Azerbaijan Business Council was likely to be established during the expected visit of President Asif Ali Zardari to Azerbaijan. Referring to his country's visa policy, the ambassador informed that Azerbaijan was following strict visa policy for all counties except Pakistan and Turkey. Shikarov said that Azerbaijan was interested in boosting trade with Pakistan and it also wanted Pakistani businessmen to visit his country to explore trade opportunities. He invited President KCCI Mian Abrar Ahmed to send a delegation to Azerbaijan to see the existing opportunities and develop person-to-person contacts. He pointed out that Pakistan could export kinno, sports goods, surgical items, mango and other products to Azerbaijan.

Copyright Business Recorder, 2012

Top

Munda dam to generate 740 megawatts power

The Munda dam will store 1.29 million acre feet of water to irrigate more than 15,000 acres land and contribute 740MW cheap electricity to the national grid. An official of Water and Power Ministry told newsmen on Tuesday that the reservoir would play a vital role in protecting Nowshera and Charsadda from flood by storing the water of River Swat during peak season. He said the dam having 2,500 feet length and 700 feet height would be built on River Swat on priority basis and would help avert the future flood related hazards in Nowshera and Charsadda districts. The official claimed it would be the biggest multi-purpose hydropower plan after 969MW Neelum-Jhelum project and the 4,500MW Diamer-Bhasha dam. To a question, he said the feasibility study was conducted about 10 years ago.

Copyright Associated Press of Pakistan, 2012

Top

Jinnah power project begins test run

In yet another significant move towards implementation of the project, the first unit of Jinnah Hydropower Project has been put on trial commission this week. The test-run would continue for 15 days. The 96-MW Jinnah Hydropower Project - a run-of-the-river scheme - is located on the River Indus adjacent to the Jinnah Barrage in Mianwali district. The overall completion of the project is expected by the mid of this year. On completion, the project will generate about 688 million units electricity annually, thus, yielding an estimated benefit of Rs 6 billion per annum. Jinnah Hydropower Project is a component of least-cost energy generation plan being implemented by Wapda on priority. The objective of the plan is to improve the ratio of low-cost hydel electricity in the National Grid, so as to stabilise the overall tariff in the system. It is pertinent to mention that the share of hydel energy in overall energy mix is almost 32 per cent. It is also worth mentioning that average tariff for hydel electricity is Rs 1.54 per unit against the overall average tariff of about Rs 9 per unit. Wapda is implementing several projects to harness the vital resource of hydropower in the country. As many as seven projects with cumulative capacity of about 1500 MW are under construction, out of those five projects of 400 MW will be completed in 2012. In addition, the work on 4500 MW-Diamer Basha Dam and the 84 MW-Kurram Tangi Dam have also been initiated. Besides, the 1410 MW-Tarbela 4th Extension and the 7100 MW-Bunji Hydropower Project will soon be available for construction, as detailed engineering designs of the two projects are almost completed. Detailed engineering design of the 4320 MW-Dasu Hydropower Project is also in progress, while the consultancy contract for yet another important project ie the 740 MW-Munda Dam will be awarded next month.

Copyright Business Recorder, 2012

Top

Beating energy crisis: waste management company introduces RDF-based gasification plant

A Lahore based waste management company 'Waste Busters' has introduced their Refuse Derived Fuel based gasification plant in the Pakistan market to combat the current energy crisis faced by the industry. RDF is the main fuel that is being used to run these gasification units to produce thermal energy at very high temperatures which can then be used to operate gas generators to produce electricity. The company in collaboration with Alternate Energy Services Providers has developed five models of different capacities to suit the needs of their customers. The gasification units are capable of producing gas starting from 2,000 cft/hr to 26,000 cft/hr, using different types of waste materials such plastic bags, wrappers and other high calorific materials. The units are also capable of running on all types of bio-mass including coal, rice husk, sugar cane bagasse and industrial waste materials. "We have tried to cater to the demand of small industrial units which need to operate their dryers, furnaces, kilns, ovens, heat exchangers and steam irons. This is the segment which is suffering the most as they have to operate daily to earn their livelihood and they are unable to meet their daily expenses because of the non availability of the gas", said Asif Farooqi, Chief Executive of Waste Busters in a statement issued here Tuesday. Although these units cannot cater for the entire shortage of the current gas requirement in the country but it's a positive step in the right direction. The best part is that the entire unit is made 100 per cent in Pakistan with local fabrication. Not only does this technology provide a solution to the energy crisis, but would also help in providing another scientific means of waste disposal.

Copyright Business Recorder, 2012

Top

Power sector entities: USAID starts capacity building programme

The USAID has initiated a training programme comprising a "beginners level" course for newly recruited/junior engineers and a three week "advanced level" course for experienced/senior engineers to build the capacity of power sector entities. Inaugurating the training programme here on Monday, Manager Director National Transmission & Despatch Co Ltd (NTDC), Rasul Khan Mahsud said that the participants on the completion of the training would have a deeper insight of the power system analysis and understanding to resolve the system problems of the present and future transmission network. In order to overcome the energy crisis, it was necessary to enhance the capacity of existing set-up and to bridge the gap between power supply and demand by launching new power projects, he said. "The scope of training extends to develop the capacity of the trainees to analyse along with solutions to remove the bottlenecks in the system - such as overloading of transmission lines & transformers, low voltage profile, as well as reduction in system losses by utilising state of the art Power System Analysis (PSS/E) software - an internationally renowned tool of power system analysis, he added. A USAID spokesperson said that the Energy Policy Project (EPP) of US Agency for International Development's (USAID) had launched a training program on Power System Analysis (PSS/E) software for the engineers of power transmission companies - NTDC and NESPAK, and various power sector distribution companies (DISCOs). He said that USAID's energy sector projects including EPP in Pakistan are a part of the US government's commitment to support the Government of Pakistan in increasing power generation, improved energy efficiency and transmission, fuel supply infrastructure and policy reform efforts.

Copyright Business Recorder, 2012

Top

BoI invites Korea to invest in coal and wind sectors

Muhammad Zubair Motiwala, Chairman Sindh Board of Investments (SBoI) has invited Korean investors to invest in Pakistan especially in Coal and Wind sectors. He further instilled the good office of Embassy of Pakistan to spread word about available investment opportunities in coal and wind sectors of Sindh. This he said while Shaukat Mukaddam, Ambassador of Pakistan for Korea called on him at his office. While discussing about Lotte issue of PTA, Chairman SBI told that even with current tariff structure of three percent, Lotte is making huge profits and any further increase would put burden on Textile Industry. As a consequence, Government would be compelled to offset this burden which wouldn't be advisable under current circumstances. Lotte interest in Cold Chain and Tourism sector were also discussed. Muhammad Zubair Motiwala asked Ambassador to use his good offices for proper follow-up on the subject. Ambassador briefed that initially it was proposed to sign with Seoul or Busan which did not get materialised therefore signing of sister city MoU with Incheon is proposed. He further briefed that the MoU was planned to be signed during planned visit of Honourable President of Pakistan to Korea in December 2011. He enquired about the latest update on the matter and proposal about 3-member delegation's visit to Korea for the purpose of signing this MoU.-PR

Copyright Business Recorder, 2012

Top

More incentives for investors: power policy 2002 to be amended

Private Power Infrastructure Board (PPIB) has decided to offer additional incentives to power sector investors for which Power Policy 2002 will be amended. The decision was taken at the 90th meeting of the PPIB, Board, presided over by the Minister for Water and Power, Syed Naveed Qamar here on Friday. These amendments will be submitted to the Council of Common Interests (CCI) before these are incorporated in the policy. Naveed Qamar said the government is taking various steps to attract investment in the power sector and the amendments are being suggested in this regard. He said the government as per the policy intends to change the energy mix and focus on hydel, coal and alternative energy projects to generate cheaper electricity for consumers. The Board was informed that a committee under the Secretary Water and Power with members from the Planning Commission, the Ministry of Petroleum, Pepco, PPIB and Chief Secretaries of the provinces and AJ&K is working to review the Power Policy 2002 and formulate and recommend amendments. The recommendations of the committee were circulated to the potential investors and lenders for comments and after incorporating their suggestions the amendments were put up to the Board of PPIB for approval and thereafter submission to the CCI. The Board also reviewed progress of all the private power projects. PPIB Managing Director N A Zuberi gave a briefing on various ongoing activities/initiatives being undertaken by PPIB. According to him as per policy of the government to improve the thermal/hydel mix and to achieve this objective, PPIB has been actively working on development of hydropower projects in the private sector. PPIB has recently issued Letters of Support to three hydropower projects ie 840 MW Suki Kinari, 100 MW Kotli and 100 MW Gulpur Hydropower projects. 150 MW Patrind Hydropower Project has signed financing documents with ADB, IDB, and Korean Exim bank and has started construction activities on site. For Suki Kinari Hydropower Project, implementation, power purchase and water use agreements have been finalised. The meeting was attended by senior government officials from the Ministry of Finance, the Federal Board of Revenue, Planning Commission, the Ministry of Petroleum and Natural Resources, Chairman Wapda, Managing Director PPIB, private sector member, provincial representatives from Punjab, Sindh, Khyber Pakhtunkhawa, Balochistan and Azad Jammu & Kashmir besides Directors of PPIB.

Copyright Business Recorder, 2012

Top

Plan devised to generate 10,000 megawatts from Thar coal by 2020: Ibad

Sindh Governor Dr Ishratul Ibad Khan said the government had devised a plan to generate 10,000 megawatts of electricity from Thar coal by the year 2020. The federal government had been approached for laying a transmission line to take electricity from Thar field to national grid, he said while presiding over a meeting on Thar coal at Governor House here on Thursday. He said installation of transmission network was the integral part of the plan, which should be ready by the time. Governor pointed out that Thar coal would be utilised to make Pakistan self-sufficient in power generation to strengthen economy and make this area as the hub of petrochemical industry. He was of the opinion that approval of transmission network by the federal government was vital for the successful progress of Thar coal project. Earlier, Provincial Secretary Coal and Energy Development Younus Dagha while briefing the Governor on the progress of Thar coal project, said that at least 2,400 MW of power would be generated under the project in next three years. About 25,000 MW would be generated from Thar coal in next 17 years, he added. He said that laying of transmission line was planned to be completed in two phases by June 2014, at a cost of Rs 21 billion. He said Thar coal field was the seventh largest coal reserves in the world with nearly 175 billion tons of black gold equivalent to 50 billion of crude oil (TOEs). This is larger than the oil reserves of Saudi Arabia and Iran and equal to 2,000 trillion cubic feet (TCF) of gas reserves. He said Sindh had a total of 186 billion tons of coal, Punjab 235 billion tons, Balochistan 217 billion tons, Khyber Pukhtoonkhwa 90 billion tons and Azad Jammu Kashmir nine billion tons of coal reserves. Dagha said Thar coal field had been declared as special economic zone where the rate of return on investment was 20 percent in dollar terms. In addition, the import of machinery, equipment and vehicles for the coal site was duty free while withholding tax, excise duty and other levies were exempted for initial 30 years, he added. He informed the Governor that three road network schemes costing Rs 9.6 billion would be completed in the area by the end of 2012. These included a 200-kilometer road connecting Thar coal field to Karachi via Thatta and Badin. Similarly, effluent disposal system will be completed by December 2012 at a cost of Rs 3.7 billion to flush out water from Thar coal field. Three reverse osmosis plants for producing clean drinking water and rescue station had already been completed at the site, he opined.

Copyright Associated Press of Pakistan, 2012

Top

AEDB to launch one wind power project every month

As part of an ambitious strategy of the government to bridge gap between demand and supply of electricity, the Alternative Energy Development Board (AEDB) would launch one wind power project every month. "The 2012 will be remembered as the year of wind power in Pakistan as we are planning to inaugurate one project every month in the current year," an AEDB official told newsmen. Last week, Federal Minister for Water and Power Syed Naveed Qamar and Chinese Ambassador to Pakistan Liu Jian jointly performed the groundbreaking of 50 megawatt wind power project, which would be set up in Jhimpir area of Sindh. The official said that Pakistan had vast potential to generate electricity through alternative energy sources, which was reflective from the fact that alone the Thattha district had the capacity of producing 15,000 MW wind power. Sources in the board said the project was being executed in collaboration with a Chinese company -Three Gorges - which had been mandated to set up total 20 wind-farms of 50 MW each during next five years. "This is the company's first project in Pakistan, while in total, it is third wind power project initiated in the country," the sources added. They said AEDB had set a target to generate 1500 MW wind power by 2013, which seemed achievable because of the serious and accelerated efforts of the government. The government has introduced an 'effective and attractive' renewable energy policy, which is bringing foreign investment in the power sector, the sources said, adding "It is an achievement that renewable and wind energy sectors are attracting the highest amount of private investment as compared to any other sector of the economy." Special attention is being paid on other resources to produce electricity like hydro, hydel and wind, which are cheapest modes of generating power. Besides, the focus was being given on the Thar coal reserves to use in power production, they added. The Thar coal reserves worth dollars 25 trillion have potential to generate 5,000MW electricity for at least 800 years to meet growing energy demand of the country. While, the power generated from coal gasification is the cheapest than other sources like furnace oil, natural gas and hydel. According to a report, a single reserve in Thar has about 850 trillion cubic feet coal.

Copyright Associated Press of Pakistan, 2012

Top

Waste to Energy Project: ADB to provide Rs 4.5 billion soft loan

Asian Development Bank will provide Rs 4.5 billion as soft loan for "Waste to Energy Project" of Capital Development Authority. Total project cost is estimated at Rs. 6 billion. During a press conference, Chairman CDA Engr. Farkhand Iqbal said that ADB will provide 75 percent financing to this project, while CDA will generate the 25 percent by cutting its non-development budget. He said that PC-1 of this project has been sent to the Cabinet for approval and soon after receiving green signal from the Cabinet ADB would start disbursing the amount pledged for this project. He said that CDA will return the ADB loan by cutting its expenses through reducing its non-development expenditures. He said that with the installation of this project the waste of the capital city will be managed on modern lines and additionally will generate 15 to 18 Megawatt (MW). He said that the monthly electricity bill for streets lighting of about Rs 120 million has become a major financial issue for CDA which is why CDA is replacing LED street lights with traditional street lights to solve this financial issue on a long term basis. He said that with the installation of LED lights CDA can save on electricity. Maintenance staff of the traditional street lights will be reduced by 25 percent after the installation of LED lights in Islamabad, he claimed and added that India has already successfully installed LED lights which are more durable and more reliable than the traditional street lights. Engr. Farkhand Iqbal said that Blue Area will be extended to Sector F-10 due to its importance for the business community. He said that State of Art building and Shopping Malls will be built in blue area to make it more attractive for the local and international business community. He said that CDA will take serious notice of encroachment in markets and is developing a complete and long term plan to reduce the encroachments in the markets and for this purpose negotiations with the Markets Associations and Islamabad Camber of Commerce are underway. While commenting on the non-availability of water to Sector G-10 and I-10 the chairman said that CDA is planning to link a main pipeline with Tarbela Dam. He said that CDA is also planning repair the damaged water supply network through which the problem of leakage in the old water supply network will be solved. He said that the authority will computerise all land and other records in order to minimise corruption and revealed that CDA has allotted land to traders of Aabara for car parking as parking is a serious problem in Aabara. He said that CDA will start development project in Park Enclave by the start of this month, while on the other hand the development work in Sectors of E-12, D-12, D-14, D-15 and D-16 will start as soon as possible.

Copyright Business Recorder, 2012

Top

IP gas pipeline work to be started in one go

Despite US pressure, the worsening energy crisis has compelled Pakistan to start work on multi-billion dollars Iran-Pakistan (IP) gas pipeline project in one go, instead of three segments, it is learnt. Sources told Business Recorder that previously the 800 km pipeline construction was split in three segments as follows: (i) Iran-Pakistan border to Gwadar; (ii) Gawadar to Nawabshah; and (iii) Indus River crossing. However, the Steering Committee of the ECC, on the proposal of the Foreign Minister, agreed after deliberation to implement the IP project in one segment. The meeting directed the Ministry of Finance to complete the process of government of Pakistan guarantee duly covering all associated risks of the project and Ministry of Petroleum is to issue policy guidelines to the Oil and Gas Regulatory Authority (Ogra) for tariff. The bids for construction of the pipeline from Engineering, Procurement and Construction (EPC) contractor would be invited after completion of the feasibility study and detailed route survey report in March 2012. The meeting was informed that Front End Engineering and Design (FEED), feasibility and Detailed Route (DR) survey of the project, currently in process, is scheduled to be completed in March 2012. The meeting also decided that provincial governments would continue to provide full support and facilitation in the provision of security in view of local participation and ownership of the project. As per Engineering and Project Management (E&PM) contract, the Inter State Gas System (ISGS) is providing security to the personnel of E&PM consultants and sub-contractors with the co-operation of the respective district governments. The meeting was informed that the salient features of the Financial Advisory Services Agreement with the Financial Advisor (FA) would include (i) the scope of assignment be based on debt equity mix of 70:30 in the project, FA will arrange debt portion, and private equity; (ii) the FA shall arrange firm underwriting commitment for debt and equity on such terms as may be agreed between FA and ISGS; and (iii) advisory fee to be paid to FA shall be 0.431 percent of project cost, which would be $ 5.36 million, based on estimated $ 1.2 billion cost of the project. The Minister for Petroleum and Natural Resources, who chaired Steering Committee of the ECC, was quoted as saying that starting pipeline construction would give a positive signal to the potential investors and Iranian side. The Foreign Affairs Minister, Hina Rabbani Khar, said that Pakistan is committed to the implementation of the project. Sources said that the issue of equity commitment by public sector enterprises (PSE), namely National Bank of Pakistan (NBP), Oil and Gas Development Company (OGDC), Pak Arab Refinery (Parco), Employees Oldage Benefit Institution (EOBI), and Pakistan Petroleum (PPL) was also discussed during the meeting. The NBP and OGDC expressed concern with respect to their equity participation in the project (given US, UN and EU sanctions on Iran) hurting their other operations in view of their international presence --NBP international operations and OGDC listing on international stock exchange. The Chairman of EOBI stated that as per SOP, the institution has to solicit approval from Ministry of Finance before making any investment, whereas officials of Parco stated that they are interested in the project and, other than the circular debt issue, they have no concerns. However, being a joint venture company, they will have to consult their BoD. The Managing Director (MD) uf ISGS stated that as per his discussions with PPL, the matter is being taken up with PPL BoD. MD of ISGS further stated that in view of the given financing timelines as required by FA, the matter of PSEs' participation is critical and needs to be resolved soonest possible. Secretary, Finance, stated that in case the PSEs are not able to invest, the government can arrange the investment through other means or investors.

Copyright Business Recorder, 2012

Top

Potential exists to double local production of LPG

Pakistan can enhance local production of LPG from existing 1,000 tons per day to 2,200 tons daily, which would save valuable foreign exchange on the LPG import besides resulting in reduction of commodities' prices. An analysis of the current local LPG production and existing reservoirs in the country shows that Pakistan could meet its local demand through indigenous resources if serious steps are taken for making few gas fields operational. According to official data, local LPG production during the past five years has declined from 1,800 tons per day to 1,000 due to negligence of the relevant authorities. In 2006, Pakistan's total LPG import was 24,779 tons, which was 4.3 percent of the total (582,850 tons) LPG used in the country and in 2011 the country imported 60,143 tons of LPG ie 13 percent of the total LPG demand. During the last five years, LPG usage in the country has declined to 474,143 tons due to high prices and inconsistent policies of the government. Local LPG production cost is estimated at Rs 75,000 per ton, while imported LPG costs Rs 123,000 per ton. In the market, domestic cylinder (12 kg) costs Rs 1,550, which indicates that dealers and marketing companies are selling gas to the consumers at imported rates. A LPG local dealer, when asked as to why they were selling the gas at imported prices instead of an average price, he replied that there was no pricing mechanism operational in the country. He added that the Petroleum Ministry and other relevant departments had to take serious steps in this direction. LPG price is at an all time high in the country at Rs 160-175 per kg partly due to heavy taxation, which includes 16 percent General Sales Tax (GST) and Gas Infrastructure Development Surcharge (GIDS). In 2006, average LPG consumer price was Rs 51,500 per ton, which at present has reached Rs 112,700, showing two-fold increase. Local producers including Oil and Gas Development Company (OGDCL), Pak Arab Refinery (PARCO), Pakistan Petroleum Limited and Pakistan Refinery Limited (PRL) are producing 643 tons of LPG per day at Rs 69,340 per ton. While private producers including Jamshoro Joint Venture Limited (JJVL), Attock Group and Byco are producing 360 ton of LPG daily. JJVL was leading LPG producer up to 2010-11 with 480 tons per day production, which currently has declined to 150 tons per day. Public sector LPG producers at present are producing over 60 percent of the total LPG. Another factor which played a leading role in declining local LPG production, is circular debt, which paralysed all the refineries and delayed payments by the Pakistan State Oil (PSO) to refineries has forced oil refineries to operate below capacity. If oil refineries start operating at full capacity it could produce sufficient LPG to meet the local demand. Federal Minister for Petroleum and Natural Resources Dr Asim Hussain recently announced the injection of 8,00 million cubic feet per day (MMCFD) gas into the system. As per plan of the Ministry, following gas fields with a combined capacity of over 1,000 ton of LPG daily would be made operational within next few moths: Kunnar-Pasaki, Uch gas field, Sinjhoro, Rehman gas field, Mehr gas field, Makori, Jhal Magsi, Sajawal, Kandkot, Qadirpur, Koh Safid gas field and others. Only Kunnar-Pasaki and Sinjero gas fields' projected LPG output is over 620 tons per day of which Kunnar-Pasaki is estimated to produce 400 tons per day and Sinjero 224 tons per day. According to Ministry officials, through PL on LPG the government would generate an estimated amount of Rs 3.5 billion per annum but at the same time public sector LPG producers would lose nearly Rs 2.3 billion for selling their produce below market price. The country can have additional 100 tons of LPG if the government settles price dispute with Dewan Petroleum and Austrian company OMV.

Copyright Business Recorder, 2012

Top

MoP plans to inject 800 mmcfd gas into system in six months

The Ministry of Petroleum and Natural Resources has planned to bring up to 800 million cubic feet per day (mmcfd) gas into the system within the next six months, which would be sufficient to overcome the current energy crisis. Official sources in the Petroleum Ministry told this correspondent that had the government developed these discovered gas reservoirs in a timely fashion, the economy of the country could be protected from huge losses. Pakistan's current gas production is 4.2 billion cubic feet per day (BCFD), against total demand of around 6 bcfd. The government during past three years did not take any serious step to access these gas reservoirs which accounts for many local manufacturers relocating to other countries, including Bangladesh. The important projects from where the government is planning to bring 800 mmcfd gas into the system are as follows: 186 mmcfd from Kunnar Pasaki, 160 mmcfd from Uch gas field, 30 mmcfd from Sinjhoro, 30 mmcfd gas from Rehman gas field, 30 mmcfd from Mehr, 30 mmcfd from Makori, 10 mmcfd from Nur-Bagla, 6 mmcfd from Jhakro, 15 mmcfd from Jhal Magsi, 10 mmcfd from Sajawal, 20 mmcfd from Kandkot and 120 mmcfd from Sara west. The officials added that nearly 200 mmcfd gas would come from tight gas and shale gas, which would be dedicated to power sector or CNG sector. Moreover, from above-mentioned gas fields the country could have over 1,000 tons of liquefied petroleum gas (LPG) daily, which would help reduce LPG shortage as well as bring down commodity prices. Pakistan currently is producing some 1,200 tons LPG, and last month it imported 17,000 tons of LPG. LPG price is at an all time high in the country at Rs 160-175 per kg due to heavy taxation which includes 16 percent general sales tax (GST) and 11,486 per ton Gas Infrastructure Development Surcharge (GIDS). The official stated that the country has sufficient discovered gas reservoirs to deal with the current energy/gas crisis but materialisation of these projects has, time and again, been delayed due to petty issues that, sources allege, are related to commissions and extension of contracts. The government is trying to deal with current gas shortage through the Gas Load Management Program, which according to Petroleum Ministry officials had been prepared after consultations with all stakeholders. Furthermore, if Sui Northern Gas Pipelines (SNGPL) and Sui Southern Gas Company (SSGC) bring down the unaccounted-for-gas (UFG) to standard level of 4 percent, the country would have 250 mmcfd additional gas. Qadirpur compression project has an expected production of 100 mmscfd gas, Bahu field located 75 km north-east of Multan, Punjab, has an expected production of 24 mmscfd (due to commence production in 2010, however delayed reportedly till June 2012), while Dhakhni expansion project is expected to inject 12 mmscfd gas to the national utilities. Sinjhoro development project is located in the Sanghar district, Sindh province, and is a joint venture with OGDC (76 percent), OPI (19 percent) and GHPL (5 percent), with OGDC serving as the operator. The projected additional production at this facility upon completion is 2,940 bbls per day of oil, 25 mmcfd per day of gas and 224 tons per day of LPG.

Copyright Business Recorder, 2012

Top

Pakistan nearing deal with India on Tapi

India and Pakistan said Wednesday they were closer to an agreement on a pipeline to import gas from Turkmenistan that would signal a further warming of economic ties between the traditional rivals. Turkmenistan has the world's fourth-largest gas reserves and energy-hungry India and Pakistan are both eager to tap this source through the pipeline that would run through the Central Asian nation's eastern neighbour, Afghanistan. "There has been considerable progress in our talks," said Indian oil minister S. Jaipal Reddy after a meeting in New Delhi with his Pakistani counterpart, Asim Hussain, on energy co-operation. The 1,700-kilometre (1,050-mile) TAPI pipeline, aims to transport over 30 billion cubic metres of gas annually from the Dauletabad gas fields in south-east Turkmenistan. "The issue of transit fees is being discussed with Afghanistan. A joint strategy is being evolved between India and Pakistan," Hussain said. "Whatever deal we reach will apply to both countries," Reddy added. Reddy said Pakistan would also consider a proposal to import Indian petroleum products and cited the savings in freight costs for Pakistan as several Indian refineries are located near the border. Deepening economic engagement between the nuclear-armed neighbours, which have fought three wars since independence from Britain in 1947, is seen as crucial to lasting peace in the troubled South Asian region. The Asian Development Bank estimated the cost of the TAPI pipeline in 2008 when the four countries signed a framework agreement at $7.6 billion. Reddy said conflict-racked Afghanistan, which also desperately requires gas, was "very keen on the project" and had pledged security for the pipeline. But energy experts have said instability in the region could yet scuttle the plan. "We consider it a pipeline of peace," Reddy added. "Everyone needs gas." The minister indicated that an earlier plan for a pipeline to carry gas from Iran to Pakistan and then India was now on the backburner. "We do what is more easily possible," Reddy said, referring to the Turkmenistan project. Washington, which has spearheaded sanctions against Iran over its nuclear programme, favours the TAPI pipeline and has pressured both India and Pakistan to hold off on a pipeline deal with Tehran. Reddy said New Delhi was continuing to import oil from Iran and was not bound by new sanctions imposed by the European Union on the Islamic Republic earlier this week. "We, as a member of the UN, are obliged to follow UN sanctions. Other sanctions imposed by big blocs of countries - we can have some freedom there," Reddy said. Iran is India's second-largest oil supplier after Saudi Arabia.

Copyright Agence France-Presse, 2012

Top

Thar coal project to provide relief to common man: Dr Samar

Member of the Science and Technology Planning Commission, Dr Samar Mubarakmand said on Tuesday that Thar coal project will be beneficial for common people and free from all defects. Talking to PTV, he said the Prime Minister Gilani had directed to expedite Thar-Coal project which would become operational from December 2013. Dr Mubarak said the success of the Thar coal project would lead to investment from the leading international companies. With the completion of coal-fired power generation project, the nation would get cheap and sufficient power supply which would resolve the current energy crisis, he said. He said that gas shortage would end within a year through coal reserves. He said the country had enough coal reserves through which it could daily produce 50-60 million cubic feet gasifier which would end gas shortage from the country. Dr Samar said it was for the first time in the country that the coal gasification was being launched on commercial basis and abundant and cheap electricity would be available.

Copyright Associated Press of Pakistan, 2012

Top

Afghanistan strategic partner of Pakistan: Dr Asim

Federal Minister for Petroleum & Natural Resources Asim Hussain has said that Afghanistan is an important strategic partner of Pakistan and the bilateral relations between the two countries are needed to be further strengthened. He was talking to Dr Hazrat Omar Zakhilwal, Minister of Finance Islamic Republic of Afghanistan, who called on him here on Tuesday. Mir Ahmad Jawid Sadat Afghan Deputy Minister Mines, Abdul Ghafar Dawi, President Dawi Oil Ltd also accompanied the minister. Secretary Petroleum and Natural Resources, Muhammad Ejaz Chaudhry, and other senior officers of the ministry also attended the meeting. Hussain emphasised that Afghanistan is an important strategic partner and strengthening of bilateral relations are imperative for the development of both the countries. The issue of smuggling of petroleum products across Afghanistan-Pakistan borders was also discussed and it was agreed upon that effective monitoring and preventative regime should be put in place. Both the sides agreed upon the importance of TAPI pipeline project and expressed mutual consent for meeting regional energy demands. The minister expressed Pakistan's interest in export of Petroleum Products to Afghanistan and informed the Afghan delegation regarding intent of establishing Pakistan State Oil (PSO) offices in Afghanistan. Mir Ahmad Jawid Sadat apprised that the Government of Afghanistan was seeking technical collaboration for extraction of Chromite and marble, for which Pakistani companies would be more than welcome. Hussain stated that the Ministry of Petroleum and Natural Resources would play its part in facilitating resumption of supply of jet fuel that was required to meet indigenous commercial demands of Afghanistan. Hazrat Omar Zakhilwal assured that Afghanistan would provide necessary support for TAPI pipeline project that would further strengthen the brotherly relations between the two countries.-PR

Copyright Business Recorder, 2012

Top

Prime Minister inaugurates Kunnar-Pasakhi Gas Pipeline Project

Prime Minister Syed Yousuf Raza Gilani said on Thursday that the government is responsible to provide all basic facilities to the people and the present government is fully committed to do the task and has initiated a number of development projects to facilitate the people at their doorsteps. The Prime Minister said this while speaking as chief guest at the inauguration ceremony of Kunnar-Pasakhi Gas Pipeline Project at the OGDCL field of Deh Shah Bukhari here on Thursday. With the inauguration of the project, initially 100 million cubic feet per day gas has been inducted in the gas distribution network. After installation of gas processing plant in the field, the gas production would not only increase to 280 MMCFD, but the field would also produce 387 tons of Liquefied Petroleum Gas (LPG) and 400 tons of Liquefied Natural Gas (LNG) per day during the current year. Sindh Chief Minister Syed Qaim Ali Shah, Federal Minister for Religious Affairs and Labour Syed Khursheed Ahmed Shah and Federal Minister for Water and Power Syed Naveed Qamar also attended the inauguration ceremony while Federal Minister for Petroleum and Natural Resources Dr Asim Hussain presented the welcome address. The Prime Minister said that at present, the country is experiencing energy crisis and in order to address the issue, the people's government has set priority to develop the natural gas sector of the country. The development of this important sector would help in overcoming the energy crisis, he said. He said that besides gas, the government is also making efforts to provide other facilities to the people at their doorsteps. The government is taking all possible measures in this direction so that all basic needs could be available to the people without any discrimination at their doorsteps. Completion of Kunnar-Pasakhi Gas Pipeline Project proved the fact that the people's government is making sincere efforts to overcome the energy crisis, the Prime Minister said. "We are fortunate that Allah Almighty has bestowed all natural resources to our country and there is only the need to explore these hidden resources so that the people could benefit from it". With the blessings of Allah Almighty and the co-operation of the people, the government would succeed in overcoming all crisis and utilise all possible resources to provide maximum facilities to the countrymen, he said. Despite problems, the government would continue its efforts to take the country at the zenith of progress and prosperity, he added. He said the people were deprived of availing the natural gas facility from the Kunnar-Pasakhi Project due to delays and hurdles of eight years, however, as a result of the efforts of the Federal Minister for Petroleum and Natural Resources, Dr Asim Hussain, the supply of gas from this project has been made possible. Praising the efforts of Federal Ministers Dr Asim Hussain and Syed Naveed Qamar for launching the development project in energy sector, the Prime Minister said under their supervision, the management and employees of Sui Southern Gas Company Limited have completed the Kunnar-Pasakhi project at the shortest time.

Copyright Associated Press of Pakistan, 2012

Top

Beating energy crisis: waste management company introduces RDF-based gasification plant

A Lahore based waste management company 'Waste Busters' has introduced their Refuse Derived Fuel based gasification plant in the Pakistan market to combat the current energy crisis faced by the industry. RDF is the main fuel that is being used to run these gasification units to produce thermal energy at very high temperatures which can then be used to operate gas generators to produce electricity. The company in collaboration with Alternate Energy Services Providers has developed five models of different capacities to suit the needs of their customers. The gasification units are capable of producing gas starting from 2,000 cft/hr to 26,000 cft/hr, using different types of waste materials such plastic bags, wrappers and other high calorific materials. The units are also capable of running on all types of bio-mass including coal, rice husk, sugar cane bagasse and industrial waste materials. "We have tried to cater to the demand of small industrial units which need to operate their dryers, furnaces, kilns, ovens, heat exchangers and steam irons. This is the segment which is suffering the most as they have to operate daily to earn their livelihood and they are unable to meet their daily expenses because of the non availability of the gas", said Asif Farooqi, Chief Executive of Waste Busters in a statement issued here Tuesday. Although these units cannot cater for the entire shortage of the current gas requirement in the country but it's a positive step in the right direction. The best part is that the entire unit is made 100 per cent in Pakistan with local fabrication. Not only does this technology provide a solution to the energy crisis, but would also help in providing another scientific means of waste disposal.

Copyright Business Recorder, 2012

Top

500 mmcfd of LNG to be imported

The government on Tuesday decided to import 500 million cubic feet per day (mmcfd) liquefied natural gas (LNG) from Qatar, and a four-member Petroleum Ministry delegation would visit Qatar to strike a deal on LNG price. This was stated by Minister Petroleum Dr Asim Hussain while talking to media persons after chairing a meeting of the special committee on gas crisis constituted by the Prime Minister. He said that Qatar has refused to provide LNG without sovereign guarantee, and the federal government would provide sovereign guarantee to Qatar for LNG import, as the country is facing serious gas shortage. The Minister said that Pakistan is working on the Iran-Pakistan gas pipeline project and it would be completed as planned. He added that the committee would also hold its meeting on Wednesday as it had not reached any conclusion regarding gas load management plan. The government has planned to bring 1.4 billion cubic feet per day (bcfd) gas in the shape of imported LNG and, in this connection, the Oil and Gas Regulatory Authority (Ogra) has already earmarked capacity allocation to three companies. Oga on October 27 decided capacity allocation to Global Energy Infrastructure Pakistan (GEIP) and two other companies. Under the capacity allocations, GEIP is to import 500 million cubic per day (mmfcd) LNG. Conditional licences have been issued to 'Pakistan Gasport', Engro Corporation, and Global Energy Infrastructure, while provisional licence has been issued to DSME ENR Limited. Pakistan at present is facing acute gas shortage. As per government estimates, it has crossed 2 bcfd mark. The government is hard pressed to meet the rising demand in the power and gas sectors. As per LNG Policy 2011, LNG supply to SSGC and SNGPL, the RLNG price will be an input for determining the weighted average cost of gas in Pakistan, determined by Ogra, for GoP specified consumers and industry. The LNG developer/LNG buyer will have the right to sell RLNG to end users directly based on a negotiated price. The Minister had convened the first meeting of the special committee to formulate practical recommendations for gas load management for winter 2011-12, which was also attended by Defence Minister Ahmad Mukhtar, Naveed Qamar, Minister for Water and Power, Khursheed Ahmed Shah, Minister for Religious Affairs, Manzoor Ahmad Wattoo, Minister for Kashmir Affairs and Gilgit-Baltistan, senior officers of Cabinet Division, Finance Division, Industries Division, Water and Power Division and Petroleum Ministry. Asim briefed the committee regarding existing gas supply/demand situation in the country. Managing Directors of SNGPL and SSGC provided detailed presentations to the committee via video conferencing. The committee was informed that at present there is a shortfall of approximately 1.1 bcfd as the demand of natural gas has increased 3 to 4 times in winters as compared to summers. During the first week of January 2012 SNGPL is facing total shortfall of 735 mmcfd, while as SSGC has a shortfall of 376 mmcfd. Committee members deliberated upon the existing gas load management during the winter 2011-12 including gas supply to various sectors including the domestic, industrial, CNG, fertiliser, textile and the commercial sectors. The committee members unanimously agreed that domestic consumers should be provided natural gas on top priority. The committee members agreed that workable solutions are to be forwarded to the Cabinet so that relief is provided to all stakeholders. The issue of gas shortage should not be politicised and the opposition should provide plausible suggestions to overcome the gas shortfall.

Copyright Business Recorder, 2012

Top

Pakistan plans to import 500,000 Mcf/day LNG from Qatar

Pakistan plans to import around 500,000 Mcf/day of LNG from Qatar starting at the end this year, an official at the ministry of petroleum and natural resources said Wednesday. A four-member delegation will leave for Qatar within a week to finalize plans including prices, the official said. Pakistan's gas shortfall is expected to hit 3.021 Bcf/day in 2016 with no big discoveries in sight, and the country will become increasingly dependent on imports to meet its energy demand, the State Bank of Pakistan said last month in a report. While rationing of natural gas is inevitable in the near future, meaningful steps must be taken to curtail residential consumption, while prioritizing supply to the fertilizer and power sectors, the central bank said. The net demand in fiscal 2011-12 (July-June) is expected be around 5.497 Bcf/d and will expand to around 6.354 Bcf/d by 2015-16. As a result, the gas shortfall is estimated to grow from 2.458 Bcf/d in 2011-12 to 3.021 Bcf/day in 2015-16. Qatar will provide LNG to Pakistan based on a sovereign guarantee from Islamabad, the official said. Last year, Pakistan gave licenses to three companies -- Pakistan Gasport, Engro Corporation and Global Energy Infrastructure to bring 1.5 billion cubic feet/day LNG into Pakistan, and these companies are to build terminals to handle the LNG. Following the finalization of the plan with Qatar, Pakistan is expected to use these terminals to bring LNG into the country after paying these operators. Pakistan now faces a gas shortfall of about 1 Bcf/d to 1.2 Bcf/day, as demand is estimated at around 5.2 Bcf/d to 5.4 Bcf/day, while production is 4.2 Bcf/d. The shortfall is expected to increase to 3.18 Bcf/d in 2014, with projected gas supply of 4.28 Bcf/d against estimated demand of 7.46 Bcf/d. The government estimates gas consumption by the power sector at around 29%, industry at 26%, domestic users at 19%, fertilizers 15%, and transport 10%.

Copyright The Nation

Top

OGDC discovers new gas source

The Oil and Gas Development Company (OGDC) has discovered a hydrocarbon-bearing horizon in its exploratory well Zin-1, located in District Dera Bugti, Balochistan. OGDC is the 'operator', with 95 percent working interest in Zin Exploration Licence, together with its joint venture partner, Government Holdings (Private) Limited with 5 percent working interest. Zin X-1 well was drilled down to the depth of 2300 metres, targeting to test the hydrocarbon potential of Pab Standstone and Sui main limestone formations. Significant reserves of hydrocarbons have been found at the Zin X-1 well. The first targeted zone, Pab Standstone, of Cretaceous age, has tested 5.48 mmcfd gas through 32/64 inches choke at wellhead flowing pressure 1050psi (pounds per square inch). This discovery will add to the hydrocarbon reserves' base of the company and its joint venture partner.

Copyright Business Recorder, 2012

Top

Refineries plan $9.9 billion investment to boost capacity

ISLAMABAD: Oil refineries have submitted plans for tentative up-gradation and other associated projects to increase refining capacity to a total of 19.34 million tons with an investment of $9.89 billion, according to a working paper submitted to the federal government recently. However, the focus of the downstream industry would be on up-grading refining capacity from the existing refining level of 12.93 million tons to 32.27 million tons per annum but they would not focus on improving specification of petroleum (POL) products, the paper added. It has been forecasted that the petroleum-product demand by year 2025-26 would be 34.4 million tons per annum. At present, the demand of petroleum products is 20 million tons per annum against the local production of 12.93 million tons whereas the deficit is bridged by imports which totaled 11.61 million tons in 2010-11. Currently, the country is importing diesel (HSD) with a specification of “pre-euro” whereas its two immediate neighbours India and China are importing euro-III compliance diesel. Similarly, gasoline specification for Pakistan is also “pre-euro” while gasoline specification for India and China is “euro-IV,” the paper revealed. All automakers in the country are not manufacturing euro-standard vehicles arguing that all the refineries are euro-compliance POL products, a leading automaker said. The independent power producers (IPPs) who are running on imported furnace oil through state-run — Pakistan State Oil - for producing electricity have complained to the concerned authorities that most of the plants are operating below the capacity mainly because of inferior quality of low furnace oil (LFO), a number of letters written by IPPs to PSO complaining of low quality LFO products and exclusively available with The News. The paper also proposed immediate and short-term up-gradation plans of refineries and associated projects worth of $1.59 billion by enhancing the refining capacity of 5.9 million tons. The BOPL will invest $660 million for installing platformer isomerization and DHDS units along with largest RO plant and single buoy mooring facility and LPG village by increasing the refining capacity of 5.4 million tons, it added. The Attock Refinery Limited (ARL) will inject $250 million for DHDS, isomerization and pre-flash units by increasing refining capacity to half a million tons per annum whereas BPPL will invest $90 million for isomerization, PRL of $250 million for isomerization complex, DHDS and thermal gas oil unit and NRL will make investment of $305 million for isomerization complex and DHDS, said the paper, adding that PARCO will invest $35 million for asphalt production plant as it has already installed DHDS. The refineries will make a mid-term and long-term investment of $8.31 billion with anticipated additional refining increase of 19.34 million tons per annum from the existing capacity of 12.93 million tons. A major chunk of this investment is the installation of Khalifa Point Coastal Refinery of $5 billion with refining capacity of 11.2 million tons, it said. The paper further said that Trans-Asia Refinery will increase refining capacity of 0.6 million tons with an investment of $4.5 billion, ARL-II with an investment of $2 billion will increase refining capacity to 2.3 million tons while revamping and bottlenecking of BOPL refinery needs $0.13 billion to increase its refining to 11.34 million tons. Similarly Mchaike-Morgah-Taru Jabba pipeline project (MMTJPP) will add 4.5 million tons per annum with estimated cost of $0.3 billion whereas the phase-I & II of BOPL (chemical) will be commissioned with an investment of $0.275 billion, it added.

Copyright The News

Top

EVENT PARTNER
CONFERENCE SPONSOR