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News Headlines for the month of
APRIL 2012

Nine LoIs issued to produce 228MW solar power

Ministry of Water and Power has issued nine Letters of Intent (LoIs) to different Solar Independent Power Producers (IPPs) to produce cumulative capacity of 228 MW electricity. A senior official at the Ministry on Sunday said these small and big projects are at various stages of development and once executed would help generate electricity for the national grid and to meet growing demand. Giving list about projects and details of LOIs holders solar IPPs, the official said these are 35 MW project at Dhaboji, District Thatta by Solar Energy Pakistan Limited, two MW in Southern Punjab by First Solar, 50 MW at Southern Punjab by AM Pak Energy, 50 MW in Sindh by DACC LLC Canada, one MW at POF Taxila by Wah Industries Limited, 10 MW in Punjab by Tech Access, 50 MW in Cholistan by CWE, 10 MW in Kasur by Roshan Power Limited and 20 MW in Lodhran by Bakhsh Energy Limited. He said Pakistan falls on the Global Sun Belt, and possesses large solar energy potential with a range of 4.9 kwh/m2/day to 7kwh/m2/day of solar isolation which is considered excellent. It is mentioned here that National Renewable Energy Laboratories, USA has identified estimated theoretical potential of 2.9 million MW.

Copyright Associated Press of Pakistan, 2012

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Refined fuels: India holds talks over exports to Pakistan

India has held talks over exporting refined fuels to its neighbour Pakistan, the head of Hindustan Mittal Energy said on Saturday, at the opening of the company's new refinery close to the border between the two countries. Moves to stimulate trade flows and liberalize restricted investment rules have emerged as the key driver of peace efforts between the neighbours, whose fragile ties were shattered when Pakistani militants attacked the Indian city of Mumbai in 2008. "There were government-to-government discussions. A delegation from Pakistan came but nothing has been finalized," said S. Roy Choudhury, chairman of Hindustan Petroleum Corp Ltd (HPCL) and Hindustan Mittal Energy. "Any decision has to make economic sense," he added. Pakistan said last month it was close to removing gasoline from a list of banned imports from India. It allowed diesel imports in 2009, but no Indian supplies were sent in the face of preferential prices offered by allies such as Kuwait. "We have significant refining capacity to enable us to export petroleum products," Prime Minister Manmohan Singh said at the official inauguration of the Bathinda refinery. Industry experts say fuel exports by India to Pakistan could be difficult as India's own fuel demand is rising, and Pakistan uses fuel of lower specification than what is being produced in Bathinda and other Indian refineries. The $4 billion Bathinda refinery, located 100 kilometers from the border with Pakistan and 175 kilometers from the city of Lahore, is operated by Hindustan Mittal Energy, a joint venture of state-run HPCL and Mittal Energy, owned by billionaire Lakshmi Mittal. Hindustan Mittal Energy is in talks with Kuwait and Saudi Arabia for long-term crude supplies, Choudhury said. The refinery will help to meet fuel demand in the India's northern region, which is short of refined products. India's current refining capacity is close to 4.3 million barrels per day (bpd), including Bathinda's 180,000 bpd. The plant may eventually double capacity to 360,000 barrels per day, said Mittal, also chairman of steel giant ArcelorMittal. India's oil minister S. Jaipal Reddy said in January the country was examining a proposal to export petroleum products and gasoline to Pakistan. India decided to permit foreign direct investment from Pakistan this month, in the latest sign of thawing economic ties between two nuclear-armed foes that have fought three wars since their independence from Britain in 1947. India and other emerging markets are boosting refining capacity to feed rising regional demand, while their counterparts in the United States and Europe restructure or shut plants as fuel sales slow. The country, which imports around 80 percent of its oil demand, needs appropriate retail prices of fuel, the prime minister said. "We also need to rationalize prices and at the same time ensure that the poor and needy are shielded from the effects of such a rationalization," said Singh.

Copyright Reuters, 2012

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Agriculture Forum opinion: Punjab has capacity to produce cheap electricity

Agri Forum Pakistan Chairman Ibrahim Mughal urged the Punjab government to take serious steps for ending the electricity load shedding and claimed appropriate and timely steps under 18th amendment can help the province produce cheaper electricity at its own. In his opinion Punjab has the capacity to produce 2000 mega watt of electricity through water, 1000MW from coal and other sources and also generate power through wind within one and half year. He said appropriate planning can help the province of Punjab to generate abundant and cheaper electricity at the rate of Rs 5 to 6 per unit. Mughal expressed these views while addressing a seminar on 'energy', said a spokesman of the Forum on Wednesday. He said that all the provinces should use their own resources to generate power and other requirements after the passage of 18th amendment. He claimed that Punjab needs 10,000MW of power per annum but it is getting 6,000MW of power due to load shedding. He said that Punjab take appropriate steps to use water, wind, coal and other resources to produce around 4,500MW of electricity in next two years to meet 100 per cent provincial requirements. He said that Punjab could avoid load shedding by generating power through its own resources and electricity it is getting from federation. Mughal stated that Punjab could produce energy required for domestic use or agricultural and industrial consumers under a comprehensive planning while 700MW of electricity could also be taken from sugar mills situated in Punjab, generating abundant power for the province, he concluded.

Copyright Business Recorder, 2012

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70 MW hydro-power project approved by KP government

Khyber-Pakhtunkhwa Minister for Population Welfare, Mohammad Saleem Khan said that the provincial government approved the establishment of 70 Mega Watt Hydro-Power Project at Lawi, district Chitral. The Project, he said, will cost an amount of Rs 12 billion; construction work on the Project will be started soon. Addressing a function held on the occasion of the inauguration of a newly-established high school in Tar, district Chitral, he said that work on two other hydro projects will also be started this year. The project will not only help make Chitral, but also all Khyber-Pakhtunkhwa self-sufficient in energy. He said that the promotion of education is the top priority of the government and that is the reason behind maximum development work in education sector. He said that during a short period of four years, the government has established two universities, two degree colleges, four higher secondary schools and several high, middle and primary schools to provide basic education facility to the people at their doorstep. The provincial minister, who is also President of PPP Chitral, said that besides Lowari Tunnel, development work worth about Rs 3 billion is in final phases. These schemes, he said, are included Chitral bypass, Chitral Town Water Supply Scheme, Drosh Water Supply Scheme, up-gradation of district headquarters hospital and expansion and black topping of Chitral-Chagoor Road. The completion of these schemes, he said, will bring positive change in the lives of the people. He said that with his personnel efforts the government has written off agriculture and business loans worth Rs 1.80 billion in Chitral and has provided employment to about 2,000 people of the district. He said that development schemes in the district have been initiated without any political discrimination. On this occasion, former Nazim Union Council, Sheshi Koh, Sher Mohammad, Naib Nazim Sarfaraz Shah, Mir Daula Jan advocate and other elites of the area appreciated the efforts and interest of the provincial minister in the development of the area and assured him full co-operation. On this occasion, several elites of the area announced joining.

Copyright Business Recorder, 2012

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'Efficient distribution of power is FESCO's top priority'

Chief Executive Officer (CEO), Faisalabad Electric Supply Company (FESCO) Tariq Mehmood Chattha has said economization coupled with efficient distribution and transmission system of electricity with minimum line loses is top priority of FESCO and for this purpose aluminium wire could also be used to replace costly copper wires. He was addressing a seminar organised by New Age Cables to introduce high efficiency and cost effective aluminium wires. The seminar was attended by a large number of electronic engineers, industrialists and distributors of electric wires. Chattha underlined the importance of profitable policies for any commercial and business entity and said that the price difference between copper and aluminium wires is visible but we have to consider other techno economization aspect too. He said that the use of aluminium has already been started as we were forced to abandon the use of costly copper wire in open places. He said that the price difference has triggered the incidents of cable theft and FESCO has to suffer Rs 30 million loses per annum only due to the theft of copper wires and transformers. He said that no doubt aluminium wires are 3 times cheaper as compared to the copper wires but in the prevailing energy crisis we must keep in our minds that the measure to minimise technical line loses. He said that the increase in density of aluminium cables could minimize the line loses and we must consider the use of aluminium wires in our prevailing circumstances when we are facing financial crunch. Mian Muhammad Idrees thanked the administration of New Age Cable for organising this seminar at Faisalabad while MPA Engr. Rana Muhammad Afzal stressed the need to overcome technical problems while replacing the copper with aluminium wires. Managing Director New Age Cables, Amir Bakhat Azam said that his organisation was not only catering to the needs of the country but was also exporting its aluminium products to other countries. He said that cheaper aluminium wires should be promoted to minimise the over all development expenditures. He said that WAPDA and other power distribution companies were already using aluminium wires but still there was room to replace the use of costly copper wire. Muhammad Amjad General Manager New Age Cables explained in detail the technical data of aluminium cables viz-viz copper wires. He also responded to the queries asked during question answer session of the seminar.

Copyright Business Recorder, 2012

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Several power, water supply schemes in progress: Qamar

Federal Minister for Water and Power Naveed Qamar has said that Federal government has launched several large and small schemes for resolution of the problems of power supply and water in southern districts of Khyber Pakhtunkhwa. He expressed these views while addressing a public meeting after inaugurating 132 KV grid station at Lucky Cement Paizu here the other day. The Federal Minister assured the dwellers of Lakki Marwat that problems pertaining to electricity would be resolved on priority basis, and issued on the spot directives to the authorities of Wapda for resolution of problems. Naveed Qamar also directed the concerned quarters to forthwith submit a report within a week time about requirements of electricity equipment like poles, wires, transformers so that the problem pertaining of power be addressed at the earliest. During the visit to Lakki Marwat, the Federal Minister also announced new transformer workshop at Sarai-e-Norang and gave approval for setting up of such workshops in the private sector. The Federal Minister said the government was fully aware about the water needs of dwellers of Southern districts of KP. The Kurram Tangi dam, he continued, was on the top of priority list of the government for which a huge amount would be reserved in the upcoming budget. He said Kurram Tangi dam was a national issue and would bring a green revolution in southern districts by irrigating 362,000 acres of barren land besides generating 85 mega watt of electricity. He said the government had inherited the electricity problems for the resolution of which effective measures were being taken. He stressed upon the participants of the public gathering to cooperate with the government in curbing illegal use of electricity and pay utility bill on time. Federal Minister Naveed Qamar thanked the local people for his warm welcome, and directed the Pesco authorities to complete a survey report for distribution of transformers. The gathering was also addressed by parliamentarians including Anwar Saifullah Khan, Naseer Muhammad Khan and Yasmeen Zia.

Copyright Business Recorder, 2012

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NTDC prepares six alternative power supply plans: provinces agree to five-day working week

The National Transmission and Dispatch Company (NTDC) is learnt to have prepared six alternative plans to supply electricity to provinces on equitable basis. Sources said that provinces would be updated regularly every morning about the expected power supply situation. This was disclosed at an inter-provincial meeting held under the chairmanship of federal Minister for Water and Power Syed Naveed Qamar on Friday. The meeting was convened to review the implementation status of the second Energy Summit. "We have prepared six alternative electricity supply plans based on expected power generation. Every morning, provinces will be intimated about the expected supply during the day," the sources added. The provinces have expressed their agreement on the proposal of five working days a week and assured the meeting that necessary notifications will be issued shortly. The ministry of water and power hopes that the implementation of five working days a week and closure of commercial business after 8pm will help save 700 megawatts of electricity. The ministry of petroleum informed the meeting that they have already supplied 134 mmcfd gas to power sector, which would be enhanced to 194 mmcfd within three to four days. The water and power ministry had sought 210 mmcfd gas from petroleum ministry. The Punjab government's representative assured the meeting that shops in the province would be closed at 8pm as necessary consultation had already been completed with stakeholders. However, Sindh and Khyber-Pakhtunkhwa (KP) were arguing that shop closure times should be 8:30pm. The minister for water and power agreed to a proposal of KP's representative that commercial businesses should be ensured up to four hours of uninterrupted supply before closure. According to an official statement, the meeting was briefed that a plan of equitable load-shedding in major cities and industrial sector, keeping in view the daily demand and supply situation, is being implemented. The provinces were requested to finalise and implement the rest of the recommendations including closure of commercial establishments at 8pm to save 250MW daily. The minister directed the National Power Control Center to share the power generation, demand and supply data along with the load management plan to provinces on a daily basis to take provincial authorities on board in this regard. Qamar also asked the ministry to submit a revised version of the Electricity Act of 1910, which prescribed major punishments for electricity theft, in the next meeting of Council of Common Interest(CCI) for approval. The meeting was briefed on the current demand supply situation, load management schedule. Participants of the meeting were told that maximum relief was being passed on to dedicated industrial feeders, which were being provided with uninterrupted supply. The meeting was told that the decision regarding disconnection of billboards was being implemented along with alternate switching of streetlights. The meeting also discussed implementation of other decisions taken during the Energy Summit like installation of pre-paid meters by the Discos in the federal and provincial offices, replacement of florescent bulbs with CFLs and payment of outstanding dues by the provinces. Minister for Water and Power reminded the Punjab representative that as the Chief Minister has promised to clear the electricity dues within one and a half month, some amount should be paid immediately. He also urged the representatives of other provinces to clear outstanding dues. The representative of Finance Ministry asked the provincial representatives to sit with the Adjuster in Finance Ministry and reconcile their bills, which, according to provinces, are inflated.

Copyright Business Recorder, 2012

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Thar coal, related projects: National Assembly body asks Ministry, PCSIR to give presentation

The National Assembly's Standing Committee on Science and Technology directed the Ministry and Pakistan Council of Scientific and Industrial Research (PCSIR) to brief the body on Thar coal and its related projects. The Committee met here with Dr Abdul Qadir Khanzada in the chair. While showing its displeasure over the absence of the PCSIR representatives from Balochistan and Sindh provinces, the committee asked Director General PCSIR to brief the body on the set-up and the development and the non-development expenditures including research projects of the PCSIR. During the meeting, the Committee was briefed regarding the PSDP and R&D Projects of the PCSIR and the R&D Labs and Training centers in Sindh and Balochistan. The Committee also directed the PCSIR to call all stakeholders in the Committee's meeting, which it decided to hold in Karachi in May, 2012. The committee further asked the PCSIR to again brief the Committee in its next meeting to be held in May in Islamabad only about research projects not construction projects. The Committee underlined the need for result-oriented research output which could help the nation. Chairman of the committee asked the PCSIR to submit a paper on different varieties of apricot in Gilgit Baltistan and problems during its growing. The Committee directed the Ministry to constitute a committee comprising different chairmen and DGs of its attached departments, which would evaluate the projects before going to the Planning Division.

Copyright Business Recorder, 2012

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'3153 schemes of village electrification completed'

Sindh Government has completed 3153-schemes of village electrification at the cost of Rs 3.15 billion during the financial years of 2007-08 to 2011-12. This was briefed by Additional Chief Secretary (P&D) during a meeting held at Chief Minister's Hosue here on Thursday. Sindh Chief Minister Syed Qaim Ali Shah presided over the meeting. Additional Chief Secretary (P&D) said that according to progress from financial year 2007-08 to 2011-12, 4220- schemes of village electrification under the directives of Chief Minister were processed, out of which 3153- schemes have been completed at the cost of Rs 3.15 billion. The meeting was informed that the total cost of 4220 schemes is Rs 4.5 billion. It was further informed that 257 schemes were not feasible as the same were technically not fit, while the work on other schemes is going on. Regarding provision of gas to villages, it was informed that under the directives of Chief Minister's Secretariat, 803- schemes of gas provision of villages were approved.-PR

Copyright Business Recorder, 2012

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Completion of 560-MW BQPS-II: KESC achieves 2052 megawatts Gross Dependable Generation Capacity

Karachi Electric Supply Company has achieved Gross Dependable Generation Capacity of 2052 Megawatts with the completion of 560-MW Bin Qasim Power Station-II (BQPS-II). The impediment, however, is that KESC's request for supplying the already approved additional 130MMCFD gas quota for the new plant is still pending with the government, which is the main reason for delay in the launch of its optimum power production. The Bin Qasim Power Station-II project is worth 450 million dollars and it has enhanced KESC's power generation capacity by 30 percent. A detailed visit and briefing for a team of media persons at the new BQPS-2 was organised by KESC on Monday. Arshad Zahidi, Chief Strategy Officer, Generation and Transmission, informed media that the Combined Cycle Power Project is almost ready to generate 560 megawatts with the execution of the project having entered final phase, but it requires an uninterrupted supply of 130 MMCFD gas, already approved and committed by the Federal Government, for its Base Load Operation, and the consistent gas pressure and calorific value are also very critical for operating the plant at optimum level. However, he said, very low or sometimes zero gas pressure is being provided to the plant so far. Ghuffran Atta Khan, Chief Marketing and Communication Officer, supervised the media visit to the plant. Also present on the occasion were other top officials of KESC including Abbas Hussain, Project Manager, Syed Zubair Ahmed, Project Director, Tahir Ali Khan, Director BQPS-II, and a representative of M/S Harbin, China, who guided the media visit to the country's largest under construction power plant of its kind and explained the functioning of its various sections. Media persons were briefed in detail over the need of regular supply of 130 MMCFD of natural gas to the plant, which would make Bin Qasim Complex the largest thermal power station in the country. To a questioner, Zahidi told that KESC had not just adopted a single direction strategy regarding fuel resource of the project. "We are already executing our coal conversion project at BQPS-I. But the government committed and approved additional quota of 130 MMCFD natural gas for the BQPS-II and an immediate supply of this quota was essential to launch the project without delay," he stated. He pointed out that in spite of the conditions in Pakistan, world lenders like International Finance Commission and Asian Development Bank, also a local banks consortium, had trusted the performance and credibility of KESC and had released their long held up loan facilities for the project. On the other hand, KESC's 180 MW GE-Jenbacher Gas Engines- Project had been awarded "Best Fast Track Project (Silver Award)" and "Best Plant in the Region" title by Asian Power Magazine. Zahidi said that at present, all three GE Frame-9 Gas Turbines bought from France with capacity up to 120 MW each, water treatment facility, NG compressors and fire system of the new plant have been commissioned and functioning satisfactorily. The 180-MW steam turbine from Harbin, China, has also been commissioned and is under testing, scheduled to be synchronised this month. Media persons were also informed that the plant has the largest power station water treatment plant in the country that meets standards; and has the qualities of reverse Osmosis plant that minimises effluents, zero water import requirements; and minimal temperature disruption to sea water environment. He said that Chinese contractors have added tremendous value to the project. He disclosed that the BQPS-II has Black Start capability to avoid system black out in case of NTDC breakdown as experienced during July 2009 episode. Three engines having capacity to produce two megawatts each have been dedicated to produce two-hour starting up electricity in case of a black out. The plant carries the Auxiliary Boiler that enables rapid Steam Turbine Start up. Thermal efficiency of the plant is 51 per cent which is highest combined cycle efficiency in Pakistan. Zahidi also briefed media persons on the overall enhancement of power generation and transformation capacity and upgrading of transmission network of the utility ever since Abraaj Capital took over its management control in September 2008. While 1010 MWs have been added in KESC's installed power generation capacity from January 2009 to March 2011 by construction of new power plants, the existing fleet efficiency has been improved by over 10 per cent through replacement of old machines with highly efficient machines, timely and digital annual maintenance and overhaul of Bin Qasim Power Station's old units and by optimum dispatch of electricity. Reliability of the system has been improved by reducing unit tripping by 33 per cent and 31 reductions in un-served energy. On the other hand, 673 MVA have been added to KESC's transformation capacity through construction of eight new grid stations, installation of 16 new transformers at existing grid stations and adopting of Creek City Grid from builder. A total of 31.5 kilometer new transmission lines have been laid down enhancing the network from 1186 to 1218.5 kilometers, while 124 kilometer extra high tensions lines have been rehabilitated. With addition of 18 new circuits to the network the total number of circuits has come to 118. With that, transmission losses have been reduced from 4.19 per cent in September 2008 to 1.45 per cent in November 2011.

Copyright Business Recorder, 2012

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Improved water flows: hydropower generation begins improving

Hydropower generation in the country has started improving which on Monday reached around 2,800 megawatts against its capacity of about 6,500MW because of improved water flows in the main rivers. According to sources in the Ministry of Water and Power water inflow in the main rivers improved within the last few days and resultantly hydropower generation has also increased. "At present hydropower generation is 2,800 megawatts which is 800 megawatts more as compared to last week, but as far as power shortage is concerned currently the country is facing around 4,900 megawatts electricity shortage", an official of the Water and Power Ministry told Business Recorder. He said that hydropower generation would improve further in a few days, but power generation through other sources including Independent Power Plants (IPPs) is expected to decline as the government has failed to resolve the circular debt issue. At present inflow of water in Tarbela Dam has reached around 30,000 cusecs and in Mangla dam around 35,700 cusecs, while water releases from Tarbela is 28,700 cusecs and from Mangla is 35,000 cusecs. At present total power generation of the country from all sources is around 10,000MW against total demand of 14,900MW. Government run Gencos are producing around 1,800MW, IPPs 6,400 and hydropower 2,800MW. The government has not started implementing the decisions taken at Lahore Energy Conference, the official said. In big cities like Lahore, Faisalabad, Gujranwala, Multan, Rawalpindi supply of electricity has forced management to suspend power for 8-10 hours a day and in the rural areas power remains suspended up-to 16 hours. According to officials Pakistan has the capacity to immediately resolve energy crisis, as its installed power generation capacity is about 23,000 megawatts of which 19,000 megawatts is available against country's peak demand of 17,000 megawatts.

Copyright Business Recorder, 2012

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Wapda installs six desalination plants along Manchar Lake

The Pakistan Water and Power Development Authority (Wapda) has completed the task of installing six desalination plants along Manchar Lake for providing potable water to the populace residing in the areas adjacent to the lake. The honourable Chief Justice of Pakistan, during the hearing of a suo moto notice, had directed Wapda and the Sindh government to install desalination plants along the lake to provide contamination-free, safe drinking water to the fishermen folk of the area. The water treatment plants installed by Wapda in compliance with the orders of the Supreme Court have cumulative design capacity of 6000 litres per hour. Over 2,000 families of fishermen folk (about 16,000 to 20,000 persons) are being facilitated with quality potable water (total dissolved solids 200 - 300 particles per million) by treating high saline effluent of Manchar Lake (total dissolved solids 5000 - 7000 particles per million). Wapda has also made arrangements for effective operation and maintenance of the plants. In addition to the six plants mentioned above, Wapda is also installing another six plants of the same capacity on behalf of the Sindh government. These plants, expected to be operational by April 30, will provide safe drinking water to another 16,000 to 20,000 people along Manchar Lake.

Copyright Business Recorder, 2012

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Thar coal: UK-based mining firm to begin work next month

The pre-development ground work for a coal mine in Thar will start from May this year, CEO of UK-based Oracle Coalfields Shahrukh Khan said on Thursday. He was briefing a meeting presided over by Sindh's Chief Minister Syed Qaim Ali Shah at the Chief Minister House. He said that during this phase, the company would construct a four-kilometre-long access road in its block from the existing road. It would, he said, also establish a site office complex, comprising prefabricated concrete housing and ancillary buildings for initial management team, community liaison officers and a healthcare facility for the local people. According to him, the company would also install a reverse osmosis plant for providing water and complete earthworks to level the open pit area, besides constructing early drainage facilities. Chairman of the Sindh Board of Investment Muhammad Zubair Motiwala, Secretary for Coal and Energy Development Department Sohail Rajput and Secretary of the provincial Investment Department Naheed S Durrani also attended the meeting. Khan said that the mining lease for the development and exploitation of the 66-square-kilometre Block VI of the Thar Coalfield has been awarded while his company planned to invest up to $610 million for the development of open-cast coal mine. His company, he said, had signed an MOU with KESC to develop initially a 300-megawatt mine -mouth power plant by 2015 to be scaled up to 1,100MW. Shahrukh Khan further informed that the open-pit coal mine development is expected to start in early 2013 with an initial production of coal in 2014 with a full-scale annual production of five million tons of coal in 2015. Work on Community and Social Responsibility (CSR) was also planned to commence from May this year, he said, adding that it would become part of long-term sustainable development for local communities. In the discussion with the chief minister, the CEO outlined the company's strategic plans and timeline for the early development and operation of the Block VI coal mine. He thanked the Sindh government, government, especially the Thar Coal and Energy Board, for extending assistance and co-operation. Syed Qaim Ali Shah said that the government was fully committed for the development of Thar coal. According to him, the coalfield had the potential of turning the country's economy around. Stressing the need for accelerating the pace of work, he said that it would yield better results. The meeting was also attended by Special Secretary to CM Hafeezullah Abbasi, Director Oracle Coalfield Shafiq R. Khan, Director-General, Coal, Abdul Majeed Pathan and Irfan Ahmed Memon of the TCEB.

Copyright Business Recorder, 2012

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20,000 megawatts hydropower projects under way: WAPDA chairman

The Pakistan Water and Power Development Authority (WAPDA) is working on hydropower projects with cumulative generation capacity of about 20,000 MW. Of them, the projects about 7000 MW are in the construction phase, while rest are in the final stage of their detailed engineering designs. This was stated by WAPDA Chairman Shakil Durrani while addressing a delegation of National Institute of Management (NIM) Peshawar here at WAPDA House on Wednesday. The team was led by NIM Chief. The Chairman said that WAPDA was executing on priority the 969 MW-Neelum Jhelum, 4500 MW-Diamer Basha Dam, 1410 MW-Tarbela 4th extension, 7100 MW-Bunji, 4320 MW-Dasu, 740-MW Munda Dam etc to cope with the increasing demand of power in the country. These projects would not only help stabilise electricity tariff by increasing ratio of low-cost hydel electricity in the National Grid, but this factor help in reducing the dependence on imported oil. Responding to a question, the Chairman said that WAPDA had procured two state-of-the-art tunnel boring machines to expedite work on strategically important Neelum-Jhelum Hydropower Project. At present, about 32 percent construction work is complete, while overall completion of the project is expected by mid 2016, he added. The Chairman, apprising the delegation of technical expertise of WAPDA, said that the first-ever tunnel boring machine in the world was used in Pakistan during construction of the Mangla Dam in 60s. Earlier, the delegation was briefed on water and power sector by WAPDA Chief Engineer (Diamer Basha Dam) Shamshad Muhammad Khan and PEPCO Director General (Energy Management and Conservation) Ejaz Rafiq Qureshi respectively. WAPDA Managing Director (Administration) Naveed Akram Cheema and Secretary Muhammad Imtiaz Tajwar were also present on the occasion.

Copyright Business Recorder, 2012

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Golen Gol Hydropower project bidding: Wapda to save Rs 84 million

Pakistan Water and Power Development Authority (Wapda) will save about Rs 84 million in procurement of electro-mechanical equipment for the 106MW Golen Gol Hydropower project by awarding the contract to the lowest technical responsive bidder. This was stated by Wapda Chairman Shakil Durrani in a meeting of the National Assembly Standing Committee on Water and Power, presided over by Syed Ghulam Mustafa Shah. Speaking on the occasion, the Chairman said that Wapda Authority had already recommended the bid in the wake of its evaluation as per rules by the offices concerned. The matter has been sent to the donor agency for approval, while the contract will formally be awarded after approval of the donor agency, he said. National Assembly Standing Committee on Water and Power directed Wapda to intimate them once the approval was granted by the donor agency. Earlier, Wapda Member (Water) Syed Raghib Abbas Shah apprised the Committee on the process relating to procurement and evaluation of bids in Wapda. It is pertinent to mention that Golen Gol Hydropower Project is being constructed on the River Golen Gol, a major tributary of the River Mastuj in Chitral district of Khyber Pakhtunkhwa province about 380 kilometres from Islamabad. On its completion, Golen Gol Hydropower Project will generate about 436 million units of electricity (Gwh) to earn revenue of about Rs 3.7 billion annually. Responding to a question, Wapda Chairman said that Wapda was implementing 18 projects under its least-cost energy generation plan to increase the ratio of hydel electricity in the National Grid, and help stabilise electricity tariff in the country. Under the plan, the 969 MW-Neelum Jhelum, 4500 MW-Diamer Basha Dam, 1410 MW-Tarbela 4th Extension, 740-MW Multipurpose Munda Dam and 84MW-Kurram Tangi Dam are under implementation to name a few, he added.

Copyright Business Recorder, 2012

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Government plans to install 747 megawatts plant at Guddu

The Govern-ment has planned to install an additional 747 MW combined cycle power plant at Guddu in Sindh province in order to enhance the power generation for future requirements. An official announcement says that Ministry of Water and Power has asked the relevant executing department to expedite its efforts and complete the required formalities at the earliest so that the proposed generation may be added in the system. Federal Minister for Water and Power Syed Naveed Qamar will preside over a meeting with the concerned officials of NTDC in order to gear up the activities for this project. According to details, the proposed power project would comprise a 747 MW combined cycle power plant consisting of two gas turbines of 243MW each, two heat recovery steam generators (HRSG) followed by one steam turbine having a capacity of 261 MW and associated equipment. Site for the proposed power plant is located within the premises of the existing Guddu power plant complex in Kashmore district of Sindh. The existing plant includes 640 MW steam turbine units consisting of two 110 MW units and two 210 MW units, 600 MW combined cycle plant and 415 MW combine cycle plant, making a total plant capacity of 1,655 MW. The existing steam/combined cycle units have the facility of dual firing, ie, gas and fuel oil. However, fuel oil is used only during interruptions in gas supply. There will be no additional gas required for this new 747 MW plant and the existing supply will be used for this additional generation. An environmental impact assessment (EIA) of the proposed project has been conducted in accordance with the stipulations of Pakistan's environmental laws and the environmental guidelines of the International Finance Corporation (IFC). The power plant will help the government in coping with the increasing demand of electricity in the country.-PR

Copyright Business Recorder, 2012

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Japan's grid stations project to help save power: ambassador

Ambassador of Japan to Pakistan Hiroshi Oe on Sunday said, "National Transmission Lines and Grid Stations Strengthening Project" of Japan worth Rs 30 billion, will help Pakistan save electricity used in about 2 million average households. In an interview with APP, he said Pak-Japan project, soon after its completion, will help Pakistan in overcoming its growing energy demand. About the major projects initiated by the Japan government, he said that Japan has been a major contributor to the development of social sectors in Pakistan. Japan's assistance to Pakistan has added up to 1.3 trillion yen (approx. 1.5 trillion rupees) since 1954, the ambassador said. Japan has provided technical assistance to Pakistan by receiving trainees under the Colombo Plan and provided technical training or study opportunities to over five thousand Pakistanis in Japan, he added. He said Japan has built up about 530 schools and 130 hospitals, clinics and provided medical equipment under various Japanese assistance programmes. To a question, he said about 30 Japanese companies are operating in Pakistan including joint ventures with Pakistani companies related to automobiles, motorcycles and service industries such as constructors, IPPs, financial institutions and trading houses. Considering the vast potentials in Pak-Japan bilateral relationship, he said there is much more work to be done, and, therefore, he cannot be complacent about the current status of ties. Highlighting the need to enhance the potential of manpower in Japan for Pakistani youth, he said trade opportunities with Japan must expand and interactions with Japan will surely provide vast opportunities to the youth of Pakistan. To a question, he said Pakistan is an important partner in the area of parliamentarians' exchanges. The ambassador expressed his determination to make utmost efforts to further strengthen bilateral relations between the two countries, focusing on the promotion of parliamentarians' exchanges of our two countries. About the Pak-Japan cultural ties, Hiroshi Oe said Japan Embassy holds cultural events such as Ikebana workshop and demonstration, children's art and speech competition and Japan film festival throughout the year across the Pakistan. The ambassador said Jica has been helping National Institute of Science and Technological Education (NISTE) to train science teachers who will surely play a vital role in utilising Japanese technology in Pakistan in the future. He said that he visited Sialkot last year and found the world's top-class manufacturing industries there. He hoped that with proper quality control and marketing, Pakistan would develop even more industries of such standard. The year 2012 is the 60th anniversary of the establishment of the diplomatic relations between Japan and Pakistan, the Ambassador added. Hiroshi Oe emphasised on promoting human and cultural exchanges to deepen mutual understanding between the two countries and expressed wish to work with the Pakistani government to further deepen the bilateral co-operative relations.

Copyright Associated Press of Pakistan, 2012

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PSO decides to set up oil refinery in Khyber Pakhtunkhwa

The Pakistan State Oil (PSO) has decided to set up an oil refinery in Khyber-Pakhtunkhwa (KP) with a daily capacity to refine up to 36,000 barrels of crude oil, it is learnt. "We have written a letter to the chief minister of KP for the grant of land so that the national oil supply company could build an oil refinery in the province," a senior Petroleum Ministry official told Business Recorder on Tuesday. The official said that financial institutions had assured the management of PSO of providing loans worth Rs 40 billion for setting up the refinery. KP and Potohar regions are producing around 40,000 barrels of crude oil daily, which is expected to increase within the next few years as drilling in the area is in progress. At present, Attock Oil Refinery (ARL) is refining crude oil being produced in KPK, while ARL's peak daily refining capacity is around 55,000 barrels. The official maintained that an additional oil refinery in the province was necessary as crude oil production was expected to increase to around 90,000 barrels per day in the region and the ARL refining capacity was not sufficient to handle the additional output of crude oil. He said to meet the requirement, PSO was going to establish an oil refinery in KP. Otherwise, additional crude oil would have to be transported to the Parco refinery in Muzafargurah, which would increase the fuel's cost. At present, five oil refineries are operational in the country, including ARL, Parco, NRL, Bosicar and PRL.

Copyright Business Recorder, 2012

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Pakistan, Algeria moving towards LNG deal

The Ministry of Petroleum and Natural Resources has started negotiating import of Liquefied Natural Gas (LNG) from Algeria at lower than the international market price following refusal by Qatar to scale down the price to $16 mmbtu instead of the international market price of $18 mmbtu. Sources in the Petroleum Ministry told Business Recorder here on Monday that relevant officials from Algeria and Pakistan have recently held meetings in Islamabad and negotiated the possibility of LNG import. Since 2006 Pakistan has been toying with the idea of import of LNG to meet its escalating energy crisis that compelled the government to suspend gas supply to industry (including textiles and fertiliser) but has not succeeded in convincing major LNG exporters including Qatar to supply at below market price. Sources said that Mustafa Bin Bada, Algerian Minister for Trade and Dr Asim Hussain, Federal Minister for Petroleum discussed the possibilities of LNG import, adding that both sides would hopefully settle all formalities soon. Last year the government issued three conditional and one provisional licenses to the LNG project proponents. The conditional licenses were issued to 'Pakistan Gasport Limited', Engro Corporation Limited, and Global Energy Infrastructure Limited while the provisional license was issued to DSME ENR Limited, but due to no government guarantee and lack of buyer interest these companies refused to begin importing LNG. The government assured the potential LNG importers that it would encourage participation of Multi-Lateral Development Banks (MDBs) in LNG import projects to facilitate the financing of such projects inter alia through equity participation by MDBs and MDB instruments such as political risk guarantees and partial credit guarantees. According to Petroleum Ministry officials at present Pakistan is facing a gas shortage of 1.5 to 2 Billion Cubic Feet (BCF) which within next two to three years would reach 3 BCF. To cope with the energy crisis the government wanted to complete LNG project by the end of 2012 and for this purpose the government has also engaged public sector gas utilities - SNGPL and SSGC - to build required infrastructure, he added.

Copyright Business Recorder, 2012

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TAPI gas pipeline project: India, Afghanistan agree on transit fee

Petroleum Minister Dr Asim Hussain announced that Afghanistan and India have agreed on a transit fee of 49.49 US cents per MMBTU for Turkmenistan- Afghanistan-Pakistan-India (TAPI) gas pipeline project, and the final agreement in this regard will be signed on May 24. Addressing a news conference here on Friday, the minister said that the price agreement between India and Afghanistan was made possible due to Pakistan's efforts, adding, "We played a major role in convincing both the countries." The minister said that Pakistan will be charging the same transit fee from India as agreed with Afghanistan. He said that all the downstream issues of the TAPI pipeline were settled and the upstream issues will be settled at the steering committee of the project on May 24 when final agreement will be signed by the four participating nations. When asked about the price of imported gas, he said that it could not be shared with the media and said that it was less that the price for Iran Pakistan (IP) gas pipeline. He said Pakistan will be negotiating a revision in gas price with Iran as there is a price renewal clause in the agreement, adding that it will result in saving $1 billion. The minister said the engineering, procurement and construction (EPC) contract for IP will be awarded next week. He said that Pakistan's stance is very clear on the IP gas pipeline. He said orders have been issued to the Pakistan State Oil for setting up 100 LPG auto stations across the country at its outlets within next three months, adding that the dealers will be bearing all the construction cost. PSO will ensure LPG supply to the dealers and its price will be totally deregulated, the minister added. He said that the motorists will enjoy LPG, as it contains more hi-octane than CNG, adding that there will be no significant difference in LPG and CNG prices as estimated LPG mileage is Rs 6 per km, while that of CNG is Rs 5 per km as compared to petrol's Rs 9.50 per km. About ending of the energy crisis, the minister admitted that it would require at least three to five years in overcoming the crisis. However, he said that the government has taken decision to put the energy sector on the track again. About LNG, he said that the suppliers want long-term agreements of up to 10 to 15 years instead of 3 to 5 years duration. The cost of short-term supplies will be double than the long-term supplies. He said that he has already visited Algeria and talks were held on LNG supply, which they assured could be provided if an agreement on government to government basis was signed. He said that a summary was being moved to ECC for final decision. Replying to a query pertaining to the violation of rules in appointment of Chairman Oil and Gas Regulatory Authority (OGRA), the minister said that the question should be asked to the Cabinet Division that made the appointment. Prime Minister has approved appointment of a retired bureaucrat Saeed Ahmad Khan as Chairman OGRA even though the post required 20 years experience in oil and gas sector. About the high unaccounted for gas (UFG) losses, he said the Sui companies have reduced it from 15 percent to less than 10 percent, but these should be further brought down to below 5 percent.

Copyright Business Recorder, 2012

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Turkmenistan gas pipeline: Tapi nations to ink GSPA deal

The Economic Co-ordination Committee (ECC) of the Cabinet has been informed that the participating countries in the Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline project would sign the general sale purchase agreement (GSPA) on Monday, it was learnt on Friday. There is yet no agreement on the transit fee between Afghanistan, Pakistan and India. Sources said that the gas price formula approved by the ECC was based on base price, agreed risk sharing formula and gas price review mechanism. The gas price formula agreed with Turkmenistan was common for all buyers (Pakistan, India and Turkmenistan) in structure and only difference was the base price, which is different for all three buyers. The formula included a basket of fuels (Platts Oilgram Singapore Market) ie HSFO 380 cst, HSFO 180 cst and Gasoil to be used for indexation of the gas price. The agreed base price is 55% of Brent oil parity (at Brent price US $100/Bbl) and comes to 70% of Brent Oil Parity (at Brent price $100/barrel) in mid country - Multan delivered. The meeting was also presented a comparison of Multan Delivered prices of alternative fuels including HSFO, Gasoil, IP, RLNG and Tapi gas price demonstrating the economics of Tapi price vis-à-vis other fuels. An official said that complete cost of the project originally estimated at $3.3 billion in 2004 escalated to $7.6 billion in 2008. The ECC was informed that around four to five years would be required to complete the project after GSPA signing. The ECC was also informed that in view of different calculations of transportation and transit fee costs via the Afghan territory, Pakistan and Turkmenistan agreed to share the risk with a floor and ceiling of transportation and transit costs through Afghan territory. It was agreed, the ECC was informed, under Intergovernmental Agreement (IGA) and Gas Pipeline Framework Agreement (GPFA) signed on December, 11 2010, that Pakistan and India would negotiate and agree on transit fee with Afghanistan for their respective volumes. India would also negotiate and agree on transit fee with Pakistan as well as on flow of Indian volume through Pakistan territory. Minister for Water and Power Syed Naveed Qamar, heading a sub-committee of the ECC, submitted a report showing that Pakistan had held bilateral negotiations with India and Afghanistan. Pakistan-India-Afghanistan also held two trilateral meetings on the matter, the latest one held on February 23, 2012 on sidelines of Tapi 16 TWG meeting, The ECC was further informed. The Indian and Afghan positions were tendered during the meeting. The sub-committee was also briefed that though the transit fee matter was standalone from GSPA. However, TAPI parties had agreed to finalise the matter by April 20 this year. The sub-committee was also briefed that the Tapi parties had agreed that a suitable indexation mechanism would be incorporated in the transit fee agreement. The same was endorsed by the sub-committee. The Secretary Economic Affairs Division remarked that the transit figures, being negotiated between India and Afghanistan, were quite reasonable. It was briefed that while the transit fee was a zero sum for Pakistan and whatever transit fee number was agreed would serve as a benchmark for future gas agreements for Pakistan. Furthermore, in terms of value, higher transit fee would be beneficial for Pakistan. The sub-committee later approved the basis of the transit fee and negotiation of Tapi transit fee alongwith a suitable indexation mechanism.

Copyright Business Recorder, 2012

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Hascol launches first LPG Autogas Station in city

Hascol Petroleum Limited launched Pakistan's first LPG Autogas Station at Shahrah-e-Faisal, Karachi. This is one of the key steps taken by Hascol to make sure that LPG becomes the fuel of choice in the coming years. Dr Asim Hussain, Federal Minister for Petroleum and Natural Resources was the chief guest. He said that with the LPG Policy 2012 to be released shortly, new policy changes suggested by Chairman Hascol will be incorporated. Since the LPG Policy will be designed with careful inputs from all stakeholders, Dr Asim promised that the mistakes of the previous government will not be repeated as regards to the CNG policy and subsidies on duty and taxes is also underway on the import of LPG kits and equipment. The Chairman Hascol, Mumtaz Hasan Khan detailed the audience about the plans envisaged by Hascol in the coming future. He assured that another 15 LPG stations are in the pipeline by the end of this year and another 200 during the next 5 years. He also asked the government for implementing policy changes to make sure that LPG stations proliferated within the lengths and breadths of Pakistan, which would in turn ask the local consumers to turn towards LPG for a cost-effective and environmentally friendly solution.-PR

Copyright Business Recorder, 2012

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Mari Gas: raise in exploration limit proposed

The ministry of petroleum and natural resources has reportedly proposed an enhancement in the exploration expenditure limit of the Mari Gas Company Limited (MGCL) by 100 per cent, increasing it to $40 million from $20 million per annum, official sources told Business Recorder. MGCL is a public limited company incorporated in Pakistan under the Companies Ordinance of 1984. The government of Pakistan is holding 18.2% share in the company besides a 20% indirect holding through OGDCL. The company is principally engaged in drilling, exploration, production and sale of oil and gas. The wellhead gas price given to the Company is on cost plus basis as defined in the Mari Gas wellhead price agreement dated December 22, 1984. Since its inception, Mari Gas has been involved in production of gas from the Mari Gas Field located at Daharki, district Ghotki. The company has also made two additional discoveries in the same area, namely the Mari Deep and SML/Pirkoh. In 2001, the company was allowed by government to undertake exploration, appraisal and development activities outside the Mari Field, costing up to $20 million per annum or 30% of annual gross sales revenue, whichever was less with the condition that all revenues from new oil/gas fields will be credited to GPA. The current production from the Habib Rahi (shallow) reservoir of Mari Field is around 500 MMCFD, which is dedicated to the fertiliser sector while the Mari Deep is earmarked for the power sector. However, at present around 60 MMCFD is being supplied to the power sector by curtailing proportionate volumes from the fertiliser unit, as decided in the Energy Summit. Additionally, 109 MMCFD has been allocated to IPPs (65 MMCFD for the Fauji Power and 44 MMCFD for the Guddu Power Plant) from the Mari Deep reservoir. The Fauji Power is already in operation while another 44 MMCFD gas is being offered to power or fertiliser sectors. Currently, the notified wellhead price of MGCL is Rs 48.30 per million BTU (equivalent to $0.53) against $2.6I MMBTU and $4.1/MMBTU offered under 2001 and 2009 petroleum policies, respectively. Due to lower wellhead price, the company is a major gas development surcharge contributor (around Rs18.5 billion during 2010-2011). The company has requested that a cap of $ 20 million may be removed and the company may be allowed an increase in the annual exploration expenditure fund to the extent of actual expenditure subject to a maximum of 30% of annual gross sales revenue. The company has stated that some basic activities were carried out in the initial years of exploration, such as organising and establishing exploration department, data acquisitions, G&G studies, block acquisitions etc. The company is now involved in 15 operated/non-operated exploration blocks across the country. The company has made five new oil/gas discoveries in four operated and one non-operated block. The company has submitted the following information to assess its performance over the period: The company is of the view that due to the exploration efforts and future work programme as per Petroleum Concession Agreements, the company has reached a stage where threshold of $ 20 million determined in 2001 is proving insufficient which is undermining the exploration efforts of the company. The company has exceeded the allowable limit of $ 20 million by incurring $23.481 million in 2008-09, $20.313 million in 2009-10 and $23.506 million in 2010-11. The sources said that the country's appetite for energy is no more a secret and it is high time to promote local companies to participate and play a proactive role. MGCL has been successfully operating the Mari Field and it has also achieved successes on other fields, including Zarghun, Ziarat, Koonj, Hala and Karak blocks. The Petroleum Policy 2009 also reflects the efforts of the government of Pakistan to accelerate exploitation of indigenous natural resources by attracting foreign investment with technology as well as promoting local companies to participate in E&P activities on a level playing field. "We have recommended to the government that the limit of $20 million per annum may be enhanced by $5 million every year to gradually achieve the revised limit of $40 million per annum over a period of four years (starting from January, 2012), subject to the same condition that the revenues from new oil/gas discoveries will be credited to GPA, thus benefiting the GoP," the sources added. The exploration expenditures will be subject to commercial audit by the Auditor-General of Pakistan. This clause will also be suitably inserted in the Gas Price Agreement. The sources stated that the resultant decrease in GDS will be around Rs 1.8 billion.

Copyright Business Recorder, 2012

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