14TH INTERNATIONAL EXHIBITION FOR THE ENERGY INDUSTRY

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News Headlines for the month of
MAY 2012

Around 89 gas exploratory wells drilled in four years

ISLAMABAD: Around eighty nine (89) gas exploratory wells have been drilled in the country during last four years to add considerable gas to national distribution network. As a result of these exploration drilling activities, twenty five (25) gas discoveries have been made, of these, nine (9) discoveries have already added 107.215 million cubic feet per day (MMCFD) gas to distribution network. An official source on Friday said that Ministry of Petroleum and Natural Resources expects 122.318 MMCFD gas to be added from rest of discoveries during 2012-13. Listing the other measures adopted to further enhance oil & gas development and production activities, the official said presently 132 licences for exploration of oil & gas are operating in the country while 131 D&P Leases are operating for the enhancement of production of oil and gas and these fields are producing oil at the rate of 71,772.37 Barrels per day and 4.41 Billion Cubic Feet Gas per day. He said the concerned authorities are concentrating on more exploration in deeper prospects and under explored geological frontiers to add new reserves. In offshore, fourteen (14) exploration licences are operating while presently the Nikko Resources has planned to drill one offshore well in the Weather window, the success of the next well can prove a corridor for enhancement of exploration activities in the offshore area, he added. The official said Council of Common Interest (CCI) approved Tight Gas (Exploration & Production) Policy, 2011 that offers 40 percent higher price than the price announced in Exploration and Production Policy, 2009, with an incentive of additional 10% price if the discoveries are made within a period of two years to attract exploration companies to invest in tight gas fields. Tight gas reserves are estimated at 24 TCF, he said, adding that initially 100-150 MMCFD would be added depending on its success rate. Economic Coordination Committee (ECC) has approved Low BTU Gas Pricing Policy-2012 recently while Petroleum Policy 2009 is reviewed and Petroleum (Exploration & Production) Policy, 2012 is being promulgated shortly.He said Ministry of Petroleum and Natural Resources is also working on Shale Gas Policy to encourage the investors to exploit these reservoirs.

Copyright APP (Associated Press of Pakistan), 2012

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Energy giant pumping $200m into its Pakistani projects

KARACHI: United Energy Group (UEG) Limited, an oil and gas company listed on Hong Kong stock exchange has raised its capital expenditure investment for its Pakistan assets to $200 million for exploitation and exploration works. The additional investment has boosted the project’s daily production capability from approximately 20,000 barrels of oil equivalent (BOE) per day when UEG initiated the project last September to about 25,000 BOE per day as at the end of first quarter of this year. In December 2010, British Petroleum (BP) agreed to sell its assets in Pakistan to the Hong Kong-based conglomerate for $775 million. After completion of the acquisition deal, the company took command of nine production and exploration blocks in Sindh and four off-shore exploration blocks in the Arabian Sea. The BP deal last year represented a significant investment made by a Chinese private enterprise in Pakistan’s energy sector. UEG Limited Chairman & Executive Director Zhang Hong Wei expressed his gratitude to governments of both countries for strong support in facilitating the arrangement. “The acquisition has become a model to our peers for investing in Pakistan. United Energy strives to become one of the leading energy reserves and supply enterprise of the country in next three to five years”, he declared. “Success of our Pakistani project is an example of Chinese private enterprises investing in overseas markets. Though they may face various operational, development challenges, government and related departments will pay closer attention to needs of these companies. Governments of China and Pakistan have great expectations for progress of our enterprise’s energy project. We will continue investing in existing projects and actively identify new development opportunities in other conventional energy generation,” Hong Wei concluded.

Published in The Express Tribune, May 17th, 2012.

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POL products: Pakistan, India explore possibility of trade

Pakistan and India on Monday held join secretary level talks to explore the possibility of trade in petroleum products. Pakistani delegation was headed by Shabbir Ahmed Joint Secretary Ministry of Petroleum, while P Kalyanasundaram, Director (International Co-operation & Corporate Affairs), Ministry of Petroleum & Natural Gas, Government of India led the Indian side. According to the Petroleum Ministry officials, both sides discussed the route, rates and sources of Indian petroleum products that may be imported into Pakistan, which later would be presented before the relevant ministries of both the countries for a final decision, sources added. A statement issued from the Petroleum Ministry adds: Dr Asim Hussain Federal Minister for Petroleum & Natural Resources has said that there is potential for trade of petroleum products between India and Pakistan, and initiation of talks would prove to be a step in the right direction. He said this while meeting with the Indian delegation which is visiting Pakistan for discussing issues pertaining to trade in petroleum products. The Indian delegation is headed by P Kalyanasundaram, Director (International Co-operation & Corporate Affairs), Ministry of Petroleum & Natural Gas, Government of India and comprises of business representatives from leading Indian companies including Petroleum Federation of India (PetroFed), IOCL, BPCL, HPCL, Reliance Industries, Essar Oil Ltd. The Pakistani delegation is being headed by Shabbir Ahmed Joint Secretary (International & Joint Ventures) Ministry of Petroleum & Natural Resources, Government of Pakistan, and other members include representatives of Ministry of Commerce, Ministry of Foreign Affairs, Ministry of Finance, Ogra, Federal Board of Revenue, Pakistan State Oil, Parco and Attock Refinery Ltd. Dr Asim during his interaction with the delegation welcomed the Indian members to Pakistan saying that Pakistan is interested in import of furnace oil and diesel. He also apprised the visiting delegation regarding TAPI pipeline project. Earlier, Secretary Petroleum, Muhammad Ejaz Chaudhry in his opening remarks said this dialogue will provide opportunity to Indian businessmen to explore potential areas for trade with Pakistan. The two-day dialogue will discuss subjects such as identification of products, specifications, volumes, supply sources and transportation mechanism for trade between the two countries.

Copyright Business Recorder, 2012

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10-month oil import bill soars to $12.5 billion

The country's oil import bill surged to an all-time high level of $12.5 billion during the first 10 months of the current fiscal year because of soaring oil prices on the international front. According to the Pakistan Statistics Bureau (PBS), Pakistan's oil import bill posted a massive increase of 44 percent during July 2011-April 2012 in the current fiscal year, climbing to $12.58 billion in first 10 months of the current fiscal year. This is in contrast to $8.767 billion spent in the corresponding period last fiscal year, depicting an increase of $3.815 billion. Oil import during the period under review was also higher than entire petroleum imports during the previous fiscal year (2010-2011). During the past fiscal year, the country's oil import bill stood at a peak level of $12.08 billion with an increase of 20 percent. "This was already being expected that with current trend of oil import, the overall imports under petroleum products will reach at new all time level," industry sources said. They said that skyrocketing international oil prices were basic reason of high oil import bill and likely to further surge during the remaining period of current fiscal year. They said that oil import also contributed in a major way to high trade deficit, besides having negative implications for the country's external sector, which was already stressed by higher current account deficit. Average oil import bill during the first ten months of FY12 also surged to $1.26 billion as against $876 million in same period of FY11. However, on basis of quantity import of petroleum products and crude oil has witnessed a surge of 10 percent to 15.88 million tons in July-April 2012. This clearly reflected that higher oil prices on international front were the chief reason for the rising oil import bill and if prices further increased, it would put greater negative impact on the Pakistan's trade bill, industry sources said. In addition, costly import will also negatively impact inflation as the government was reviewing the oil prices on a monthly basis to rationalise petroleum product prices in line with the international market, they added. A surge was registered in import of petroleum products and with an increase of 70 percent it surged to $8.354 billion during July-April of FY12 against $5 billion in the corresponding period last fiscal year. Similarly, the import of crude oil mounted by 10 percent to $4.22 billion from $3.84 billion. Month-on-Month basis, oil import bill witnessed an increase of 113 percent to $1.44 billion in April this year against $1.2 billion in April 2011. On the other side, petroleum group exports including coal have posted a decline of 29 percent during the period under review as Pakistan has exported petroleum products, including petroleum crude, petroleum products, petroleum top Naphta, solid fuels (coal), worth $810 million in July-April of FY12 as against $1.14 billion in same period of last fiscal year.

Copyright Business Recorder, 2012

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US hails pipeline as boost for Asian integration

The United States on Wednesday hailed the first new contracts in a pipeline linking Central and South Asia as a "very positive step forward" for regional peace and prosperity. Turkmenistan on Wednesday signed agreements with India and Pakistan to deliver gas through a new pipeline that will transit Afghanistan, the first contracts in the ambitious project. "This is a perfect example of energy diversification, energy integration done right. We are very strong supporters of the TAPI pipeline," State Department spokeswoman Victoria Nuland told reporters. "We consider it a very positive step forward and sort of a key example of what we're seeking with our 'New Silk Road Initiative,' which aims at regional integration to lift all boats and create prosperity across the region." The US-sponsored "New Silk Road" initiative is a long-term vision aimed at developing closer economic ties between Afghanistan and neighbouring countries. Like the ancient Silk Road, Afghanistan would be at the heart of lucrative trade routes between Asia and the West, but it would involve modern highways, rail links and energy pipelines. In the same news briefing, Nuland kept up US pressure on Pakistan not to pursue a multi-billion dollar gas pipeline project with Iran, even though it also represents a measure of regional integration. "We don't think it's a good idea. We don't think it's a reliable route for Pakistan. We've also continued to have conversations about diversifying supply and other ways to do that," Nuland said. The United States has urged Pakistan as well as its regional neighbours India and Sri Lanka, along with other countries, to cut back on oil imports from Iran. Under a new law aimed at pressing Iran over its controversial nuclear program, the United States will penalise foreign financial institutions over transactions with the Islamic Republic's central bank, which handles oil sales. The sanctions take effect at the end of June.

Copyright Agence France-Presse, 2012

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Minister terms development important milestone

Pakistan and Turkmenistan signed the Gas Sales & Purchase Agreement (GSPA) for Turkmenistan-Afghanistan-Pakistan-India (Tapi) Pipeline Project at the Caspian Resort of Avaza, Turkmenistan on Wednesday. Dr Asim Hussain, Minister for Petroleum and Natural Resources, is leading the Pakistani delegation. Dr Hussain termed the development as an important milestone and said that the project will help in meeting the energy requirements of Pakistan in the long run. The Tapi GSPA is a thirty-year agreement, whereby the Turkmenistan will supply 1.34 billion cubic feet per day (bcfd) of natural gas to Pakistan. Tapi project is scheduled to be completed by October, 2017. Earlier, GAIL (India) Limited signed the GSPA after agreeing to a transit fee during tripartite talks between Pakistan, Afghanistan and India in Islamabad last month. Pakistan has also completed the negotiations on Transit Fee as agreed between Afghanistan and India. Secretary Petroleum, Muhammad Ejaz Chaudhry has added that the Tapi Pipeline Project would provide the much needed natural gas to the country and would help Pakistan in enhancing economic growth. He further added that the project would also strengthen the relationship between the countries involved.-PR

Copyright Business Recorder, 2012

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IP reaches advanced stage

Work on the Iran-Pakistan (IP) gas pipeline has reached an advanced stage while progress on Turkmenistan-Afghanistan-Pakistan-India (Tapi) is still in initial stages. According to sources privy to developments Pakistan has already completed Interim Front End Engineering Design (FEED) of the proposed IP project, while progress on Tapi is in an initial stage. "Until there is peace in Afghanistan construction of Tapi is impossible and it can not be considered an alternative to the IP which can be completed within two years if the international community's concerns over Tehran's nuclear programme are appropriately addressed. In fact, no official agreements on security for the Tapi pipeline have made the rounds, with some experts claiming that the cost of providing security to the pipeline may be greater than the cost of constructing the pipeline itself," a Petroleum Ministry official said. Iran has already constructed 900 kilometers of the 1100-kilometre pipeline within its borders while 785-kilometre stretch of pipeline in Pakistan awaits construction. Tapi, supported by the US and presented as an alternative to IP, is estimated to cost $7.6 billion to lay 1,680-km-long gas pipeline that will bring 3.2 Billion Cubic Feet per Day (BCFD) of natural gas from Turkmenistan's gas fields to Multan and end at the north-western Indian town of Fazilka. Under the agreement Afghanistan's share would be 500 Million Cubic Feet per Day (MMCFD) while Pakistan and India would receive 1,325 MMCFD apiece. As Tapi has the stamp of approval of the US financing options may be easier for Pakistan than IP. Security would be relatively easier on the IP pipeline that is designed to pass through Khuzdar district of Balochistan province, a relatively peaceful area, and Karachi in Sindh. In case of Tapi high security risk is involved due to continued civil war in Afghanistan as some 700 kilometers of the pipeline will pass through Afghanistan. According to official sources, IPs interim bankable feasibility study has been finalised. Work on Detailed Route Survey (DRS), Social and Environmental Impact Assessment (SEA) and land acquisition has already started. Route Reconnaissance Survey which is part of Detailed Route Survey has also been completed. The government on March 29 invited bids for the construction of 785 kilometres of IP project from pre-qualified parties with three firms qualifying: two Chinese and one Crescent Group of Pakistan. The detailed route survey activity is expected to be completed by the end of June 2012, while the government has already invited tenders for construction of IP pipeline. As far as financing of IP project is concerned, Iran has assured Pakistan to provide $500 million funding for the construction of the gas pipeline, while the government has collected nearly Rs 35-40 billion from Gas Infrastructure Development Cess, which would be utilised towards construction of Iran Pakistan (IP) gas pipeline and/or other energy projects. As per draft agreement, Pakistan is bound to complete IP gas pipeline project by the end of 2014 otherwise it will have to pay a daily penalty of $1 million to Iran. As per draft agreement of the project, the contractor will have to complete the project within two years - 2012-14. The Government of Pakistan is expected to allow exemptions in duties and taxes on the import of certain materials required for gas import projects. EPC contractors are also expected to be exempted from sales tax for services provided on such projects. The pipeline is likely to cost the energy-deficient country $1.25 billion, and will initially bring around 750 Million Cubic Feet per Day (MMCFD) of gas, which will be gradually increased to over 1.5 Billion Cubic Feet per Day (BCFD). Pakistan at present has three key projects for importing gas namely IP, Tapi and Liquefied Natural Gas (LNG). According to officials and industry sources the gas price under IP project would be $11 per Million British Thermal Unit (MMBTU), for Turkmenistan-Afghanistan-Pakistan-India $13 per MMBTU and LNG at $17-18 per MMBTU. As per official estimates, gas shortfalls are estimated to reach 2.5 BCFD in 2014-15, 3 BCFD in 2015-16 and 3.5 BCFD in 2016-17. The gap is estimated to sour to 5 BCFD by 2020-21, unless major discoveries and field developments are made in the coming years.

Copyright Business Recorder, 2012

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Tapi gas pipeline: Turkmenistan, Pakistan, India sign GSPA

Turkmenistan on Wednesday signed agreements with India and Pakistan to deliver gas through a new pipeline that will transit Afghanistan, the first contracts in the ambitious project. The 1,700-kilometre (1,050-mile) Tapi pipeline aims to transport more than 30 billion cubic metres of gas annually from Turkmenistan to energy-hungry consumers in Pakistan and India as well as relieving shortages in Afghanistan. The sale-purchase agreements for the yet-to-be-built pipeline were signed at a ceremony on the sidelines of the annual Turkmenistan oil and gas congress in its Caspian Sea resort of Avaza, just outside the city of Turkmenbashi. They were inked by the head of the state gas company Turkmengaz Sakhatmurad Mamedov with representatives of India's Gail Ltd and Pakistan's Inter State Gas System. "Today we are witnesses of a historic event, not just of regional but of world scale," said Turkmenistan Deputy Prime Minister Baimurat Khodzhamukhamedov. Turkmenistan and Afghanistan signed a memorandum of understanding for co-operation in the gas sector but no contract. Khodzhamukhamedov said negotiations were continuing with Afghanistan on the price of deliveries. The Tapi (Turkmenistan-Afghanistan-Pakistan-India) natural gas pipeline, which is backed by the Asian Development Bank (ADB), is regarded with suspicion as a wildy ambitious pipedream by some analysts. Much of the pipeline will go through Afghanistan which neighbours both Turkmenistan and Pakistan but remains wracked by violence and instability. But India's Oil Minister S. Jaipal Reddy said that his fast-growing nation was waiting impatiently for the pipeline to be ready, noting that India's energy demands would quadruple by 2017. Afghanistan's Mining Minister Wahidullah Shahrani said that the project will "spread peace and help our region flourish." Financial details and precise volume details of the contracts were not disclosed but according to the ADB, the contracts will lead to the supply of up to 90 million cubic meters of natural gas a day through the pipeline. Turkmenistan is also being courted by the West and China for its immense gas reserves which, according to British auditors Gaffney, Cline and Associates, are the second largest in the world. The country is also keen on diversifying its export routes which remain dependent on its former Soviet master Russia with whom it has had occasionally prickly relations. It has already begun exporting gas to China through a pipeline that was opened by China's President Hu Jintao in December 2009. According to the ADB, the Tapi in 2008 was estimated to cost at least $7.6 billion (6.0 billion euros) and the partners now face the task of attracting commercial partners to build, finance, and operate the pipeline. But the project does enjoy the support of the United States, which is keen to deter subcontinent states from dependency on energy supplies from its arch foe Iran. Crucially, the pipeline project also signals a further warming of economic ties between the traditional rivals India and Pakistan. "Each country stands to gain, making this not only the 'Peace Pipeline,' but a pipeline to prosperity as well," said Klaus Gerhaeusser, director general of the central and west Asia department at the ADB.

Copyright Agence France-Presse, 2012

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Government to allow PPL to invest $100 million in Iraq

The government will allow Pakistan Petroleum Limited (PPL) to invest $100 million in exploration of oil and gas in Iraq, official sources told Business Recorder. In April 2012, the government authorised submission of bid in joint venture with ZhenHua of China for exploration blocks in Iraq and directed to approach the State Bank of Pakistan (SBP) for further processing of Company's proposal for investment abroad. In line with the directives, SBP's in-principle approval was also obtained on 20 April 2012. But on May 4, 2012 ZhenHua, the joint venture partner, decided to withdraw from the Consortium. Based on discussion with ZhenHua, it appears that ZhenHua has set a high economic threshold for Iraq exploration due to their corporate strategy and organisation size. Given that PPL has aggressive exploration plans including focus on international opportunities, Iraq stands as a premium opportunity for exploration and the Company is fully geared to pursue this opportunity. Iraqi government issued the final draft terms on April 20, 2012, under which, 100 percent share of minimum work programme can now be accomplished within $100 million limit approved by ECC for a limited number of blocks. Therefore, it is planned to maintain the allowable limit of $100 million as already approved by ECC. PPL is, however, continuing its efforts to have an understanding with any other pre-qualified international company for joint venture so that the possibility of larger exploration programme of upto $200 million may be retained (PPL's share will remain $100 million maximum). Keeping the situation in view, Petroleum Ministry has sought government's approval to authorise PPL to pursue Iraq's exploration opportunity on standalone basis within US $100 million limit, or pursue a larger exploration programme in joint venture with another suitable pre-qualified company.

Copyright Business Recorder, 2012

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Government likely to double exploration expenditure limit of MGCL

The government is likely to enhance exploration expenditure limit of Mari Gas Company Limited (MGCL) by one hundred percent to 40 million dollars from 20 million dollars per annum, official sources told Business Recorder. MGCL is a public limited company incorporated in Pakistan under the Companies Ordinance 1984. The Government of Pakistan is holding 18.2 percent shares in the company besides 20 percent 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 Well Head Price Agreement of December 22, 1984 signed between government and the company. Since its inception, Mari Gas has been involved in production of gas from Mari Gas Field located at Daharki, District Ghotki. The Company has also made two additional discoveries in the same Mari Field area namely Mari Deep and SML/Pirkoh discoveries. In 2001, the Company was allowed by GoP to undertake exploration, appraisal and development activities outside Mari Field up to 20 million dollars per annum or 30 percent of annual gross sales revenue, whichever is less on the condition that all the revenues from new oil/gas fields will be credited to GPA. The current production from Habib Rahi (shallow) reservoir of Mari Field is around 500 mmcfd dedicated to fertiliser sector, while Mari Deep is earmarked for power sector. However, at present around 60 mmcfd is being supplied to power sector by curtailing proportionate volumes from fertiliser unit, as decided in the Energy Summit. In addition, 109 mmcfd has been allocated to IPPs - 65 mmcfd to Fauji power and 44 mmcfd Guddu power plant from Mari Deep reservoir. Fauji power is already in operation while another 44 mmcfd gas is being offered to power or fertiliser sector. At present notified wellhead price of MGCL is Rs 48.30 per mmbtu (equivalent to $0.53) as compared to $2.6/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 (GDS) contributor (around Rs 18.5 billion during 2010-2011). The company has requested that cap of 20 million dollars should be removed and the company may be allowed the annual exploration expenditure fund to the extent of actual expenditures subject to maximum of 30 percent 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 fifteen operated/non-operated exploration blocks across the country, where the exploration activities are at different stages. The company has made five new oil/gas discoveries in four operated and one non operated blocks. The company maintains that due to the exploration efforts and future work programme as per Petroleum Concession Agreements (PCA), the company has reached a stage where threshold of 20 million dollars 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 dollars by incurring $23.481 million in 2008-09, 20.313 million dollars in 2009-10 and 23.506 million dollars in 2010-11. The Petroleum Policy 2009 also reflects the efforts of 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 requested that the limit of 20 million dollars per annum should be enhanced by 5 million dollars every year to gradually achieve the revised limit of 40 million dollars 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," said an official of Petroleum Ministry. The exploration expenditures will be subject to commercial audit by an independent firm of chartered accountants on the approved panel of SECP/SBP, for certification of the said expenditures. The audit certification shall be submitted to the Government of Pakistan. This will result in decrease in GDS of around Rs 1.8 billion.

Copyright Business Recorder, 2012

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China willing to set up $5 billion oil refinery at Karachi

China has reportedly expressed willingness to set up an oil refinery near Karachi with an investment of $5 billion, official sources told Business Recorder. For this purpose, China has requested the Government of Pakistan (GoP) to identify 4000 acres of land as early as possible. Refinery, the GoP has been informed, will begin operations four years after development work starts formally. This proposal will be further developed during the second meeting of China-Pakistan Joint Energy Working Group, which will commence from Tuesday (today) at a local hotel. On Monday Minister for Water and Power, Syed Naveed Qamar, and the head of Chinese delegation Wu. Guihuj held preliminary discussions, which mainly focused on Energy Infrastructure Fund (EIF) of $10 billion, renewable energy working group, formation of sectoral group and other issues. The main focus of energy dialogue between the two countries will be Sindh-Engro coal mining and 1200 MW coal fired power plant and Sino Sindh Resources coal mining and 900 MW coal fired power plant. In hydropower projects the main focus will be on 969 MW Neelum-Jehlum hydropower project, 4500 MW Diamer-Bhasha hydropower project and 1100 MW Kohala hydropower project. Transmission system projects would include: (i) 500 kV Guddu transmission line; (ii) 220 kV Uch-II transmission line; (iii) dispersal of power from Neelum-Jehlum, Kohala, Karot and Azad Pattan hydropower projects; (iv) Thar Matiari transmission line project; and (v) dispersal of power from 630 MW Chashma Nuclear C3 and C4. In renewable energy, three projects ie United Energy Pakistan Limited, 150 MW, China Three Gorges, 50 MW and Hydropower China, 100 MW, will come under discussion. Other projects which will come under discussion will be: 425 Nandipur thermal power project, 548 MW Kaigah hydropower project and 640 MW Azad Pattan hydropower project. The sources further revealed that other projects could also be included in the deliberations with the consent of both sides. According to the sources, both sides have agreed to issue a "joint statement" instead of signing ceremony. There are reports that during the first meeting JEWG in August last year, Beijing had conveyed to Islamabad that its investment in the water and power sector will be conditional on suspension of Public Procurement Regulatory Authority (PPRA) rules. It is pertinent to mention here that during the visit of the Chinese Premier Wen Jiabao in December 2010, under Energy Co-operation mechanism, it had been decided that China will provide financing and co-operation for conventional, renewable and civil nuclear energy projects, to be identified by Pakistan.

Copyright Business Recorder, 2012

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Kuwaiti company intends to invest in oil, gas exploration

ISLAMABAD - Chairman and Managing Director of Kuwait Foreign Petroleum Exploration Company (KUFPEC), Nizar M Al-Adsani has called on Federal Minister for Petroleum & Natural Resources Dr Asim Hussain to discuss KUFPEC’s continued involvement in the oil and gas sector of Pakistan. KUFPEC is a subsidiary of Kuwait Petroleum Corporation and is the second largest foreign producer in Pakistan. Al-Adsani assured the Minister that State of Kuwait deeply values the strong bond between the two Muslim countries and is committed to helping Pakistan meet its energy needs through the development of indigenous resources. Al Adsani also stated that KUFPEC intends to invest in the exploration activities and requested continued support of the Pakistan government.KUFPEC has several assets spread over 14 countries and Pakistan is one of its core areas. The company has plans to grow aggressively over the next decade in Pakistan as well as elsewhere. KUFPEC employs several Pakistani nationals at its head office in Kuwait and at the Pakistan Office.Al-Adsani was accompanied by Falah Al-Mutairi, Deputy High Commissioner Embassy of the State of Kuwait, Naser Al Fulaij, Deputy MD, and Syed Wamiq Bokhari, Regional Manager Middle East. Secretary of Petroleum, Muhammad Ejaz Chaudhry, Sher Mohammad Khan, DGPC, and Mohammad Azam, DG (Oil), were also present.APP adds from Karachi: Russia has shown interest in exploration of oil and gas in Pakistan.This was stated by Federal Minister for Petroleum and Natural Resources Dr Asim Hussain here on Saturday.He pointed out that the Russians are willing to explore oil and gas in Pakistan. The Minister said that they have also evinced interest in different pipelines that are being laid.He was of the view that there should be road linkage with Russia so that our economy could improve and the bilateral trade could be promoted.Dr Asim said that we are also considering the rail and road link with Russia that would be through Afghanistan into Russia. He stated that the Russians have also showed interest in the Iran-Pakistan Pipeline.

APP

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Russia interested in oil and gas exploration: Asim

Russia has shown interest in exploration of oil and gas in Pakistan. This was stated by Federal Minister for Petroleum and Natural resources Dr Asim Hussain, here on Saturday. He further said that the Russians were willing to explore oil and gas in Pakistan. The Minister said they had also evinced interest in the different pipelines that are being laid. He was of the view that there should be road linkage with Russia so that our economy could improve and the bilateral trade could be promoted. Dr Asim said, "We are also considering the rail and road link with Russia that would be through Afghanistan into Russia." He stated that Russians had also showed interest in the Iran-Pakistan pipeline. Earlier, Sukhoi Superjet `SSJ 100' aircraft performed a `roadshow' at Karachi Airport on Saturday. The Federal Minister for Petroleum and Natural Resources, Dr Asim Hussain, was the chief guest at the ceremony. Chairman of the Board of investment (BoI), Saleem H. Mandviwalla, Managing Director of Pakistan International Airlines (PIA), Air Chief Marshal Rao Qamar Suleman (Retd), Managing Director of Civil Aviation Authority (CAA), Captain Nadeem Khan Yousufzai, were also present on the occasion. It was pointed out that the Sukhoi aircraft is here at the invitation of Prime Minister, Syed Yousuf Raza Gilani. In his speech, the chief guest Dr Asim Hussain, termed the event as a historic moment and that the event symbolises friendship between Pakistan and Russia. He said that he (Dr Asim) was in the team when the Prime Minister of Pakistan met with Russian President Putin introduced this aircraft (Sukhoi) to us. Dr Asim said that this aircraft has been developed in collaboration with the Boeing and Airbus. He also pointed out that the aviation is an important industry in Pakistan. The Minister pointed out that the present government in Pakistan under the leadership of President Asif Ali Zardari has embarked on a journey of building a strong relationship with the Russian Federation. He said that Pakistan and Russia are keen to develop bilateral trade and investment and enhance ties. Dr Asim pointed out that today's event is a testimony of the growing ties between the two countries. He said that the rail and road network would also be developed for enhancing the bilateral trade also. The Chairman of the BoI, Saleem H. Mandviwalla, presented the welcome address. A representative of the Sukhoi Aviation, Igor Syrtsov, shed light on various features of the aircraft. He further pointed out that Sukhoi Superjet 100 is a modern 100- seat jet. Igor was of the view that the recent European certification confirmed full compliance of the Sukhoi Superjet 100 with stringent safety requirements.

Copyright Associated Press of Pakistan, 2012

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US agency proposes long-term LNG import deal

ISLAMABAD: Overseas Private Investment Corporation (OPIC), an agency of the US government, has proposed that Pakistan should strike $30 billion LNG import contract on long-term basis to secure financing from international lenders. OPIC is the US government’s development finance institution that assists businesses to invest overseas and helps solve critical development challenges and in doing so, advance US foreign policy. Earlier, OPIC and World Bank’s affiliate International Finance Corporation (IFC) had also committed $370 million financing to local firm 4Gas for Mashal LNG project, which includes establishing a terminal at Port Qasim. A senior official of the petroleum ministry said that a summary relating to LNG import project was being revised in light of OPIC proposals. “OPIC has proposed to ink LNG import deal with supplier for fifteen years and revise gas price after every ten years,” an official said adding that this proposal will now be tabled before the Economic Coordination Committee (ECC) for formal approval. Earlier, the petroleum ministry had proposed to strike a deal of LNG import for ten years and price revision after every five years. The Ministry of Petroleum wants to award LNG import contract to two companies for import of 800 million cubic feet per day (mmcfd) LNG through bidding process. However, a finance ministry official termed the LNG import plan against Public Procurement Regulatory Authority (PPRA) rules and said that relaxation of rules will favour blue-eyed private firms. The Finance ministry says that acceptance the bid of two firms for one project was in violation of PPRA rules. Under the government-backed integrated LNG import project, private firms will be given a guarantee that was one of the key demands tabled by Turkish-based firm Global Energy. Oil and Gas Regulatory Authority (Ogra) has also alleged that the criteria to qualify bidders was not being tabled before the ECC, a move that could let private parties influence the government in finalising the importers. In the ECC summary, the petroleum ministry is also seeking the cabinet body’s nod to allow private developers to make spot purchases of LNG from Korea, Malaysia and Qatar which will require relaxation of PPRA rules. The petroleum ministry has also pleaded to strike deals with Qatar, Korea and Malaysia on government-to-government basis. “Spot purchases will also mean a violation of PPRA rules,” an official said quoting finance ministry authorities. They said that the government would strike long-term deals of LNG import with private firms and therefore, PPRA rules required qualifying one firm, a policy that coincides with spot purchases. An official of the petroleum ministry requesting anonymity said that the government wanted to import LNG in large quantity to meet requirements of the country and therefore two firms were proposed to award contract. He said that terminals would also be set up by private firms and total cost of the project would be over $30 billion. He also said that country would benefit the spot purchase of LNG. He claimed that the government would allow private firms to import LNG on spot purchase if they wanted to sell it to private clients. He also ruled out favouring to any private LNG firm and said that government wanted to import gas on fast-track basis and those companies would qualify that would provide the product swiftly.

Published in The Express Tribune

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IP gas pipeline project: Iran offers $250 million, Asim tells National Assembly

Federal Minister for Petroleum and Natural Resources Dr Asim Hussain on Monday informed National Assembly that Iran had offered $250 million to Pakistan for Iran-Pakistan (IP) gas pipeline project. In a written reply, the minister said that during the visit of Deputy President on International Affairs of Islamic Republic of Iran to Pakistan from February 5 to 7, 2012, the Iranian side offered to construct the IP pipeline in Pakistan (planning, engineering, supply of pipeline, compressor stations, etc) and offered to provide $250 million funding for the project. He further said that Pakistan delegation was scheduled to visit Iran soon to discuss details with the Iranian side in this regard. About the countries facilitating the IP gas project, the Minister said that Pakistan was currently in consultation with many countries and the process was going on. However, he said, no firm arrangement has been made so far. To a query whether United States has raised objections over the project, he said that Pakistan had so far not received any official communication from the US pertaining to the project. However, he said that there have been some public statements in this regard by the US government. To another question, he told the House that Iran had also offered supply of 80,000 barrels crude oil per day to Pakistan. However the details are being worked out, he added. Meanwhile, Minister for Defence Chaudhry Ahmed Mukhtar while updating the House on the year-wise loss of Pakistan International Airlines (PIA) during the last five years, said that the national flag carrier suffered a loss of Rs 27.78 billion in 2011. In 2010, he said, PIA suffered a loss of Rs 8.58 billion, while it was Rs 12.43 billion during the year of 2009. He further said that the PIA suffered a total loss of Rs 39.99 billion in 2008 and Rs 13.07 billion in 2007.

Copyright Business Recorder, 2012

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Chinese firm in talks for $3 billion wind farm

Chinese oil and gas company United Energy Group Ltd said on Wednesday it plans to invest $3 billion in a wind farm project in energy-starved Pakistan and is in talks to buy equipment from mainland suppliers. United Energy, which paid BP $775 million for oil and gas assets in Pakistan in 2010, said it plans to construct the wind farm in several phases. It did not disclose the targeted total capacity for the project or provide a timeframe. The company said, however, it had already obtained approval from the Pakistan government to construct a wind power project with a capacity of 500 megawatts. Pakistan, which suffers chronic shortages of electricity, is offering clean energy producers higher rates for renewable power as it seeks to boost production, while diversifying energy supply away from oil and gas. The major suppliers of wind power equipment in China are Sinovel and Xinjiang Goldwind Science and Technology. Shares of United Energy closed flat in Hong Kong on Wednesday, against a 1.9 percent drop in the benchmark Hang Seng Index.

Copyright Reuters, 2012

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Budget 2012-13: Rs 78.22 billion allocated for 24 ongoing hydel projects

Rupees 78.22 billion local and Rs 15.62 billion foreign exchange component has been allocated in forthcoming budget 2012-13 for as many as 24 ongoing hydel projects. According to documents available with Business Recorder, Rs 27.22 billion local and Rs 5.7 billion foreign exchange component (Saudi Arabia) for Neelum Jhelum Hydropower Project while Rs 22 billion for Diamer Basha Dam Project Land Acquisition (4500MW) and Rs 6 billion for Diamer Basha Dam project Lot 1 to 5 have been allocated in the Budget 2012-13. Similarly, Rs 6.842 billion local and Rs 2.5 billion foreign exchange component (Kuwait) for Golan Gol Hydro Power Project, Chitral Khyber Pakhtunkhawa, Rs 3.94 billion local and Rs 1.3 billion foreign exchange component (Abu Dhabi Fund) for Dubir Khawar Hydro Power Project, Kohistan, Khyber Pakhtunkhawa and Rs 1.2 billion local and Rs 780 million foreign exchange component (France) have been allocated for rehabilitation of Jaban Hydro Electric Power Station. The document further says that Rs 2.1 billion local and Rs 540 million foreign exchange component (Abu Dhabi fund) for Allai Khawar Hydro Power Project, Batagram, Besham Khyber Pakhtunkhawa, Rs 1.032 billion for Jinnah Hydro Power Project, Mianwali, Punjab, Rs 544 million local and Rs 260 million foreign exchange component (Germany) for Keyal Khawar Hydro Power Project, Khyber Pakhtunkhawa and Rs 6.3 billion local and Rs 4.86 billion foreign exchange component has been allocated for Tarbela Fourth Extension Hydel Project.

Copyright Business Recorder, 2012

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SHYDO prepares plan to generate 1,168 megawatts of power

Sarhad Hydel Development Organisation (SHYDO) has prepared plan for generation of 1,168 Mega Watt electricity, which will later be increased further by 800MW. This was told to the Standing Committee of Khyber Pakhtunkhwa Assembly on Energy and Power, which met in Governor's House, Chitral with Chairman Badshah Saleh in the chair. Those who attended were included Provincial Minister for Population Welfare Saleem Khan, Members Provincial Assembly including Anwar Khan, Aurangzeb Khan, Imtiaz Khan, Ghulam Mohammad, District Co-ordination Officer (DCO) Chitral Rehmatullah Wazir, Additional Secretary Energy & Power Usman Yaqub and representatives of different political parties from district Chitral. SHYDO Director Zahid Sabri and Project Director Lawi Shabir Ahmad briefed the meeting that hydropower project be started in district Chitral in near future. The meeting was informed that the government had planned to start work on nine hydel power projects in the district. "Out of these projects the organisation will carry the feasibilities of six projects while work on three will be formally launched. Work on 59 MW Lawi project will be launched shortly," he said. Keeping in view the severe electricity requirement of district Chiral, the Standing Committee recommended the handing over of 1MW power station from Wapda to SHYDO for the purpose of refreshment and up-gradation and help arrest the energy crisis and load shedding in the district. The Standing Committee also recommended the adjustment of locals on employments in SHYDO projects. On this occasion, Provincial Minister for Population Welfare Saleem Khan expressed gratitude to the members of the committee for their visit to Chitral, saying that their visit would provide them firsthand information regarding the identified sites for the Hydel projects. He said that district Chitral had the capacity of generating 10,000MW electricity, which was not only sufficient for district, but would also meet the energy requirement of the whole country.

Copyright Business Recorder, 2012

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Patrind hydropower project likely to achieve COD soon

One-fifty (150) MW Patrind Hydropower Project, run-of-the-river project and a joint venture of K-Water, Daewoo Corporation and Sambu, Korea is likely to achieve Commercial Operation Date (COD) in a couple of months. Patrind is a village near Muzaffarabad, wherein the project is being set up at river Jhelum by using the water of river Kunhar through a 2.2 kilometers long tunnel of 7 diameters. The height of the concrete gravity dam will be 42 meters. Engineering-Procurement-Construction (EPC) Contractors of Daewoo Corporation and Sambu Construction Company, Korea are actively engaged in initial work on the project site which will be completed on Build-Own-Operate-Transfer (BBOT) basis. Operation period of the project will be 30 years. The project's annual power generation will be 630 GWh per annum. "As we achieve COD, we will get Notice to Proceed (NTP) after which the project will commence to be completed in four years," said Young Sik Ko, Site Manager in a briefing to a group of visiting journalists. Korean embassy's Second Secretary, Park Jae Woo, took the journalists to the sites of Patrind Hydropower Project and 84 MW New Bong Escape Hydropower Project, Mangla to show how Koreans are engaged in development of hydropower projects in Pakistan to ease power shortage. Total budget of the project is $361 million whereas the construction cost is estimated to be $290 million. KEXIM, Islamic Development Bank (IDB), International Finance Corporation (IFC), an arm of World Bank and Asian Development Bank (ADB) are the lenders of the project. According to an official statement, ADB will provide $97 million to fund a new private sector hydroelectricity plant to ease power shortages as well as create new job opportunities in the country. Site manager of the projects told visiting journalists that at least 1300 people will get jobs after the Patrind Hydropower Project starts operation. 83 MW New Bong Escape Hydropower Project, which is a project of Laraib Energy Limited, is being established at Mangla dam (near Mirpur) by using the water of river Jhelum with an investment of $154,300,000. New Bong Escape Hydropower complex is being constructed by EPC contractors of Sambu Construction Company, Korea. The project which started from December 28, 2009 is expected to be completed by December 31, 2012. The project involves construction of a run-of-the-river, low head, 84MW hydel power generating complex. It is located at the New Bong escape, some 7.5 kms downstream of the existing Mangla Dam (which was completed in 1967), on the Jhelum River, in AJK. The project site is some 120 kms from Islamabad. It will be fed by water originating from the Mangla reservoir, which is released, through the Mangla powerhouse (1,000 MW), into the Bong Canal. There is no new reservoir or other water storage envisaged for the project. Increase in project cost from the estimated $149.2 million in 2005 to the current $217 million was brought about by significant price increase of key inputs in the international market and deteriorating macroeconomic condition. In 2008, 75.5% of the company's shares were transferred to a majority shareholder due to the exit of the shareholder in 2007 that shifted its investment focus out of the region. The EPC contractor was also replaced through ICB. The amended financing documents to accommodate new lenders and new sponsors were signed on November 2009. According to a representative of Laraib Energy Limited, Javed Rashid New Bong Escape Hydropower Project is at least 5 months ahead of its schedule, adding that first unit is expected to start generation in August or September this year. Yearly gross generation will be 540 GWh. New Bong Escape power Project's tariff will be 8.5256 cents per unit.

Copyright Business Recorder, 2012

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Wapda plans to fill Mangla Dam

The Water and Power Development Authority (Wapda) has planned to fill the raised Mangla Dam up to its maximum level of 1,242 feet this year subject to the availability of water against last year's test-filling of 1210 feet. The standard operating procedure in this regard has already been approved by the federal government. This was stated by Wapda Chairman Shakil Durrani during a briefing to the Azad Jammu & Kashmir (AJK) President Sardar Muhammad Yaqoob Khan and the Prime Minister Chaudhry Abdul Majid regarding Mangla Dam Raising Project. AJK Chief Secretary Shehzad Arbab, Wapda Secretary Muhammad Imtiaz Tajwar, General Manager (Projects) North Rashid Ali Khan Bangash and Mangla Dam Raising Project Director Ghulam Sarwar Memon were also present during the briefing. Speaking on the occasion, the Chairman said that Mangla Dam Raising Project costing about Rs 97 billion would significantly contribute towards socio-economic development of the country, as it would store additional 2.9 million acre feet of water besides generating 644 million additional units of electricity annually from the existing Mangla Power Station. Additional benefits of the project have been estimated Rs 18 billion per annum, he added. The Chairman said that the hit people of the project had been compensated through an unprecedented compensation and resettlement package. It is pertinent to mention that the Mangla Dam Raising Project has been completed with a cost of about Rs 97 billion, out of which a hefty amount of over Rs 65 billion was spent for compensation and resettlement works. Resettlement works include construction of New Mirpur City and four satellite towns having all civic amenities of the modern days, Mirpur by-pass, a bridge over New Bong Canal and Dhan Gali Bridge across River Jhelum etc. Later, AJK Prime Minister Chaudhry Abdul Majid, accompanied by Wapda Member (Water) Syed Raghib Abbas Shah inaugurated Islam Garh town - one of the four model towns developed for the hit people of the project.

Copyright Business Recorder, 2012

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IPPs bring back more than 600 megawatts to national grid

Independent Power Producers (IPPs) has brought back more than 600 mega watt generations to the national grid due to improvement in gas and oil supply to the power plants during the last day. The source in the IPPs said that government had made some payments to the IPPs and PSO, ultimately oil supply was restored to the IPPs on Thursday. It is pertinent to mention here that electricity demand has increased due to hot weather which outstripped the power generation and enhanced the gap between demand and supply; however, the average shortfall will reduce from 6000MW to about 54,000MW after the betterment in gas and oil supply to the power plants. Dilating upon the power situation, the source said that the hydel generation has reduced more than 2000MW as compared to previous year due to less inflow in Tarbela and Mangla reservoirs. The inflow in both reservoirs was recorded 200,000 - 250,000 cusecs which has reduced to 70,000 - 80,000 cusecs only. Although efforts have been made to boost thermal generation to full capability and major thermal plants of both GENCO's and IPPs ie Jamshoro, Kapco, Hubco, Liberty Power, Saif, Saphire, Orient and Halmore, which were out from the system have been brought on the bar by improving gas and fuel supply and more than 600MW has been added during last one day, source mentioned. An official said that the melting process of glacier has started and hopefully water inflow in Terbala and Mangla reservoirs will improve in a couple of days. Resultantly, the generation capacity will be enhanced and it will also help in reducing the severity of water and energy crisis

Copyright Business Recorder, 2012

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Government intends to import 500 megawatts of power from India: Naveed

Minister for Water and Power, Syed Naveed Qamar and Indian High Commissioner, Sharat Sabharwal on Tuesday discussed electricity trade between the two countries. Minister for Water and Power, Syed Naveed Qamar while welcoming the High Commissioner stated that increase in trade and economic engagement would contribute to building trust between the two countries. He said that the group of experts from Pakistan and India has already discussed a cross border interconnection between the two countries to facilitate exchange and trade in electricity. He said that the next meeting of the group of experts would be held in Lahore next month to finalise the technical matters in order to expedite the electricity trade project. Qamar said that Pakistan is an energy deficient country and intends to import at least 500MW power from India to meet its future needs. Sabharwal said that cross border electricity interconnection would be of mutual benefit to both countries. He said that views on a number of technical and other matters would be exchanged during the meeting of experts. He said that electricity trade between the two countries would open new era of co-operation and enhance the bilateral trade.-PR

Copyright Business Recorder, 2012

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Thar's UCG project: Sindh asks Centre to increase PSDP allocations

The Sindh government has finally stepped in to save the multi-billion Thar Coal Underground Coal Gasification (UCG) and has asked the federal government to increase allocations for the project. The project's fate is hanging in balance due to lack of funds. Informed sources in Sindh Coal and Energy department told this scribe that the department had submitted proposal to the federal government for PSDP 2012-13, wherein the centre had been asked to increase allocation for UCG project at Thar. They said that UCG project at Thar coalfield was purely funded by the federal government. They further said that the project team had started work on phase I & II in April 2010 and 100 percent funds were released for the phases of the project by December 2011. The project team had conducted first test burn successfully on December 11, 2011 and syngas was being produced, they added. Work on the phase three has not yet been started, as the government has not yet released a single penny of the Rs. 900 million allocated for the phase. In the proposal moved to Federal government, Sindh demanded to increase funds for the project by 2014 million from Rs900 million allocated in FY 2011-12. It further demanded of the federal government to allocate Rs20 million (Rs 10 million each) for the already completed two phases of UCG project as well, they said. The federal government had already released Rs. 490.48 million for first phase of creation of new processing facilities for handling & purification of Coal Gas produced by Underground Coal gasification and Rs. 494.45 million for the second phase of creation of new processing facilities (for production of Coal gas by underground coal gasification), they said. Sources further said the demand has been made on the proposal of the project team, which has proposed revision of first two phases to accomplish the working on production of syngas on commercial scale, its purification and installation of syngas generators to produce electricity.

Copyright Business Recorder, 2012

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Turkey interested in energy sector: Yildiz

Turkey is keen to invest in Pakistan's power sector especially hydro, wind and other renewable resources. This was stated by Turkish Minister for Energy and Natural Resources Taner Yildiz while talking to Minister for Water and Power Syed Naveed Qamar in a meeting here on Monday. He said that Turkey was committed to working with Pakistan and helping it address the current energy crisis. "Turkish investors are interested in the development of energy sector by investing in hydro, wind and other renewable resources," he added. Yildiz invited the power ministry's delegation to visit Turkey and brief the investors there through organising conferences and road shows. He assured that the Turkish government would facilitate and encourage the investors to invest in Pakistan. Speaking on the occasion, Qamar appreciated the Turkish Minister for showing interest to invest in the power sector. He stated that Pakistan was facing energy crises and the government was taking all possible measures to overcome the power shortages. He said that the government was facilitating the Turkish investors and was looking more investment in wind, coal and hydel sectors. Both the ministers agreed that they would continue co-operation with each other to strengthen the existing bilateral relations. They also agreed to sign an MoU for development of the renewable energy sector in Pakistan on long-term basis.-PR

Copyright Business Recorder, 2012

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Turkey to help install 150 megawatts power plant in Punjab: official

The Turkish government will provide technical support for installing a 150-megawatt power plant to overcome the current power crisis in the Punjab, a senior official of the Punjab Finance Ministry told Business Recorder on Saturday. Ankara, he said, was also providing technical assistance on a number of projects in Punjab in health, education, transport sectors and civic amenities. The Punjab government, he said, had signed various agreements with the Turkish government in varied fields like environment, education and trade. "The Turkish government will set up a university in Lahore, while the Fateh University of Istanbul will provide technical assistance for improving the education sector under a recently-signed Memorandum of Understanding (MoU)," the official maintained. He said the Punjab government offered 50 post-graduate and PhD scholarships to brilliant students from the province to pursue higher studies in Fateh University while teachers would also go to Turkey under an exchange programme. Official said that an agreement had also been signed between the Punjab government and the Istanbul Municipality for technical assistance, adding that an agreement on solid waste management (SWM) had also been signed with the Istanbul Municipality. The official said that recently the mayor of Istanbul had gifted the Punjab government 100 buses. He said that during the previous visit of Chief Minister of Punjab Shahbaz Sharif to Turkey, various agreements had been signed between the provincial government and Turkish businessmen and trade organisation Tuzkan to promote co-operation in trade, industry and other sectors.

Copyright Business Recorder, 2012

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'UK firms are keen to invest in power projects'

British firms are interested in investing in Pakistan's power sector and ready to initiate electricity generation projects, additional deputy head of mission of the British High Commission in Karachi Shehryar Khan said on Friday. He said this during a meeting with NTDCL's Managing Director Rasul Khan Mahsud at Wapda House. Referring to investment prospects, Rasul Khan Mahsud said that NTDCL was the sole government company engaged in transmission and dispatch of power within Pakistan, adding that it was also responsible for enhancing the transmission system through new projects and would always prefer foreign investment in power sector. Shehryar said that various business communities in the United Kigdom had shown keen interest in investment in various power sector areas. He said that infrastructure of power projects being processed in Pakistan could be pursued as a joint venture to boost bilateral relationship for establishing long-term and stable partnership between the governments of UK and Pakistan. He also said that the co-operation can further be enhanced via collaboration between universities in Pakistan and the UK. Later, Rasul Khan Mahsud commended British High Commission's efforts for developing mutual co-operation between the two countries.

Copyright Business Recorder, 2012

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Planning Commission for improving energy mix: time has come to revisit policies, says Nadeem

Dr Nadeem-ul-Haque, Deputy Chairman Planning Commission, said that time has come to revisit policies and decisions be taken to improve energy mix in favour of Hydro-power and renewable generation for providing consumers affordable electricity along with building reservoirs on priority basis to minimise water crisis and encourage concept of Green Economy. He said this at the opening of two-day 'National consultation on green economy' jointly organised by Sustainable Development Policy Institute (SDPI), One UN Joint Programme on Environment, Ministry of Climate Change, Heinrich Boll Stiftung (HBS) and Lead Pakistan here on Friday. He was of the view that in shaping and managing economic resources, it's time to think of the economy holistically and focus on productivity in creative manner, exploring the linkage between growth and green economy. He said that the current policy framework and management of resources have become obsolete. Shakil Durrani Chairman WAPDA, talking of green energy and hydro-power development in Pakistan, said one thirds of electricity generation in the country is renewable and it is expected to increase to 60 percent by 2025. Most of the increase would be based on hydro projects as power generation through water is cheaper than all other sources, he added. He further said that Eastern Himalayan glaciers may deplete in next 50 years because of global warming, increasing flow in Indus River quoting a World Bank Report 2005. Regarding remedial measures, he said that projects for additional reservoirs and desalination of sea water should be developed and water should be utilized efficiently. He further said that WAPDA is establishing Glacial Research Institute at Karakorum University Gilgit. Establishment of water reservoirs will also improve underground water table. Treatment of Effluent Water of LBOD/RBOD in Sindh Province and lining of canal is must for water conservation, he added. Timo Pakkala, United Nations Resident Co-ordinator reiterated that UN is committed to support Pakistan in promoting economic growth and spearheading its pace for sustainable development, appreciating recent developments at policy level including establishment of Ministry of Climate Change and preparation of climate change policy. Ambassador (R) Shafqat Kakakhel, former Deputy-Executive-Director, UNEP and Member Board of Governors, SDPI said that consultants will examine the relevance of green economy keeping in view Pakistan economic and social circumstances as well as global discourse on the concept. Alfred Leoni, Ambassador of Brazil, said that more than 120 heads of the states have confirmed their participation in Rio +20 which will fundamentally revolve around green economy and institutional framework for sustainable development. 'The conference will be a landmark event for the international community to deliberate on global challenges of extreme poverty, hunger and environmental degradation etc," he added. Khalid Mohtadullah, Director, International Water Management Institute (IWMI) lamented unequal water distribution and inefficient water practices in agriculture and suggested rebuilding and strengthening of institutional capacity to ensure water availability for growing population needs and irrigation. Javed Jabbar, Former Federal Minister and Vice-President, IUCN, said Pakistani nation is one of the most resilient nations in the world, which have been undergoing a number of extreme natural and men-made disasters over the last sixty years. We are living in red zone and there is a dire need of transforming this red zone to green by inculcating the green economy concept into our policies especially at provincial level. "A fundamental conceptual shift at the government, public and media level is need of the hour, besides revision of our consumption patterns, existing destructive growth strategies through adoption of ecological economics," he maintained. Malik Amin Aslam Khan, Former Minister of State for Environment briefed participants on the process of preparing Pakistan's National Sustainable Development Strategy (NSDS), which will be presented at Rio +20 side events after certain review and finalisation process at the national level. He was of the firm belief that extensive and multi-stakeholder consultations were held and key suggestions and ideas have been incorporated in the NSDS document. He said NSDS envisions evolving a just and harmonious society in the country through promotion of a vibrant and equitable economic growth without overexploitation of resources and distribution of development dividends to all in particular to the poor and vulnerable groups of the society particularly future generations. He highlighted economic, social and environmental dimensions and said NSDS implementation system should be flexibly and progressively evolved rather imposition on Pakistan leading towards a green economy. Farrukh Iqbal Khan of Ministry of Foreign Affairs, in his teleconference from Pak Mission in New York highlighted the divisions in global negotiations on green economy and sustainable development. He underscored that a global transition toward green economy is seen as a mean of resolving the financial crisis globe is facing today. He added that relying on markets and private sector alone might lead to the similar crisis. Dr Tariq Banuri, Former Chief, UN's Division of Sustainable Development (UNDESA) reviewed national public policy-making process and trends, and an absence of a common framework to resolve the series of crisis that nation faces today. He urged that investment should be made into profitable sectors to ensure a strong revenue base for the country to take care of the growing population needs. The main objective of the consultation is to review the preparations for the United Nations Conference on Sustainable Development to be hosted by Brazil in Rio on 20-22 June and likely to be attended by more than 130 heads of state and governments and thousands of delegates representing the UN, private business, non-governmental organisations and media. On the first day of consultation, the delegates deliberated on set of considerations for the Pakistani delegation for the forthcoming Rio+20 Summit as well as ideas for consideration by all stakeholders after the Summit to accelerate the sustainable development and poverty eradication from Pakistan through awareness campaigns making it part of education curriculum. Choong Joo Choi, Ambassador Republic of Korea to Pakistan, while giving his view on regional dimension of green economy, said that in 1960 we were able to achieve the objectives of our five-year plan, as Korean government concentrated with determination on human resource development through education which is the only human resource on which you can rely on. Many other participants gave presentations on the 'Green Economy and its implication on developing countries, which include Dr Hussein Abaza former chief economic and trade branch UNEP, Jemal Ahmed Country director Action Aid Pakistan and Dr Stefanos Fotion, UNEP Regional Office for Asia-Pacific.

Copyright Business Recorder, 2012

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435 megawatts Nandipur project: amount of sovereign guarantee to be raised

The government will raise the amount of sovereign guarantee from Rs 5.3 billion to Rs 19.15 billion in favour of local banks syndicate as time gap arrangement for 435 MW Nandipur power project as banks have refused to enhance the loan amount, sources close to Secretary Water and Power told Business Recorder. The ECC of the Cabinet approved 425 MW Combined Cycle Power Plant at Nandipur in its meeting held on December 27, 2007 at an agreed EPC price of $329.00 million with Dongfang Electric Corporation Limited (DECL), China. The approval was subject to Ministry of Finance agreeing to provide GoP sovereign guarantee for the loan of $329million. Local banks syndicate (local syndicate) opened four L/Cs on September 15, 2008 for Rs 19.150 bn with local component funding to the extent of Rs 5.3 billion (Syndicated Term Finance Facility-STFF). Foreign loans, namely, COFACE Buyers Credit Facility Agreement for Euro 68,967,879.65 of October 03, 2008 and SINOUSRE Buyers Credit Facility Agreement for $140,177,370.90 plus the dollar equivalent of Euro 6,649,525.35 of March 19, 2009, signed with foreign banks syndicate (foreign syndicate) were envisaged to provide funds for the retirement of shipping documents. The GoP sovereign guarantees were issued/adjusted by Finance Ministry in favor of local syndicate and foreign syndicate on September 29, 2009 and October 31, 2009 respectively within the amount of the EPC price approved by ECC. Shipments started as per the schedule but foreign loans could not be availed within validity period up to August 31, 2011 due to pending legal opinion (a condition precedent which was issued on October 19, 2011) and reimbursement to the local syndicate which opened project L/Cs and made forced payments. The sources said funded exposure of the local syndicate reached up to Rs 14.923 billion under L/Cs as against the GoP sovereign guarantee of Rs 5.3 billion , resulting in excess over exposure of Rs 9.623 billion and the local syndicate started to withhold B/Ls, causing non clearance of shipments from Karachi Port etc and incurring demurrage and detention charges. In the meantime, projects L/Cs also expired on April 30, 2011 and the local syndicate refused to extend the same due to their aforesaid excess over exposure and any further likely exposure due to non-effectiveness of foreign loans. After much persuasion, local syndicate has agreed to extend the project L/Cs and release B/Ls provided that the amount of GoP sovereign guarantee of Rs 5.3 billion is enhanced to Rs 19.150 billion as a last option, to secure its excess over exposure as well as to book further exposure upon extension of project L/Cs to import the remaining equipment valued at $67.431 million and Euro 1.564 million ie existing STFF Rs 5.3 billion will be increased to Rs 19.150 billion as a time gap arrangement till the extension/effectiveness of foreign loans. STFF of Rs 19.150 billion will be reduced to Rs 5.300 billion again through reimbursement from foreign syndicate upon the effectiveness and availability of foreign loans (ie, through prepayment of STFF, without penalty) and accordingly GoP sovereign guarantee will be reduced. Overall funded exposure of borrowing will not exceed $329.00 million at any point in time although the amount of GoP sovereign guarantees is increased for the aforesaid time gap arrangement (duplication of guarantees) in view of envisaged direct prepayment by foreign syndicate to the local syndicate. The Supreme Court of Pakistan, while passing short order on May 11, 2012 regarding Commission's report on Nandipur and Chichokimallian power projects, directed Ministry of Water to report on project's progress within next two weeks. The sources said demurrage and detention charges will be accumulated up to Rs 1,729.591 million (till August 31, 2012). The ECC had waived demurrage & detention charges to the extent of Rs 873 million (till July 31, 2011). This waiver could not be availed due to non release of B/Ls by local syndicate for the reasons explained above. Accordingly, ECC is being requested to waive additional demurrage and detention charges Rs 856.591 million. According to sources foreign syndicate is being pursued for the extension in availability period (expired on August 31, 2011) till August 31, 2012 and December 31, 2012 for COFACE and SINOSURE facilities respectively. In case availability period of foreign loans is not extended by foreign banks syndicate, then Ministry of Finance will revoke the GoP sovereign guarantees issued in favour of foreign lenders and in that, arrangement fee, commitment fee and insurance premium etc aggregating Rs 1.583 billion approximately already paid/to be paid as per the provisions of the credit facility agreements will become a sunk cost. Moreover, the NPGCL will have to additionally borrow Rs 5.300 billion for financing local component of the project which is not included in STFF Rs 19.150 billion equivalent of project L/Cs ($148,423,099 and EURO 70,200,000) is likely to exceed by Rs 2.00 billion over and above GoP sovereign guarantee of Rs 19.150 billion due to exchange rate fluctuation over the last 3 1/2 years. Total additional funding (Rs 5.300 billion + Rs 2.00 billion) will have to be arranged either through local borrowing or Cash Development Loans (CDL). DEC's claims on account of suspension of work etc, under negotiation will be finalised in due course of time.

Copyright Business Recorder, 2012

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German companies interested in energy projects: CG

The Consul General of Germany Dr Tilo klinner has invited the business community of Hyderabad to visit Germany before the end of this year as Germany plans a grand exposition of its products to be organised in Karachi and Hyderabad next year. Addressing a reception in his honour at Hyderabad Chamber of Commerce and Industry here on Monday, the consul general said that Hyderabad was the gateway to the markets in the other parts of Sindh and was a city of peaceful people. Klinner told the businessmen that the German companies were interested in making investment in the energy project while his country was interested in increasing agricultural imports. He told the industrialists that Pakistan would soon get the General System of Preference (GSP) Plus scheme and which would help boost the country's textile imports to Germany. In response to a question he said that Germany would like to pull out its forces from Afghanistan by 2014. He said that Pakistan is frontline ally and is a friendly country to Germany therefore, Germany wants to see Pakistan a successful country and Afghanistan as stable country as it is not only important for the region but also for the whole world. He said that in auto sector German firms engaged in automobile industry could invest in Pakistan especially in manufacturing of spare parts including auto tyres etc. Earlier, President HCCI Seth Goharullah welcomed the guest and honoured them with the traditional gifts of Sindhi cap and Ajarak. He appreciated the consul general's suggestion for their visit to Germany. Goharullah informed the guests about the potential of agro based industries and automobile manufacturing in Hyderabad. He hoped that the German CG's visit to Hyderabad would be a source of inspiration for the business and industrial community of Hyderabad that would go long way in building up strong bilateral trade relationship between two nations. He said that the business community of Hyderabad felt that there were immense opportunities and demand for Pakistani goods in the German markets, and also the business community wanted to import German goods in Pakistan. He further said that there were vast opportunities to increase the trade volume between our two friendly countries. The consul general was accompanied by his wife Ljubow Jurewna and the consulate general's staff. The officer bearers of the HCCI, members and representatives of different trade associations were also present on the occasion.

Copyright Business Recorder, 2012

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Solar system a better option to overcome energy crisis

With the growing energy shortage in the country, solar system looks a better solution to this crisis, which is already getting popularity in the world. Pakistan has a potential to generate over 2.324 million mega watt electricity per annum through solar system which can help to overcome prevailing energy crisis. Official sources at Pakistan Engineering Council (PEC) while talking to APP said switching over to the solar system for energy is the need of the hour and more people and scientists should come forward for this cause. He said solar and wind power are the need of the hour and future belongs to them as they are most economical sources of energy. According to scientists and experts, extensive use of solar power can change the face of remote and rural areas. Dr Khan said, "The system is still working at places where people have maintained batteries. We had also established an experimental research solar lab at over 18,000 feet above the sea level, near the K-2 base camp, in the late 1990s," he said.

Copyright Associated Press of Pakistan, 2012

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30 alternate energy projects in pipeline to yield 1500MW

More than 30 alternate energy projects, including wind and solar are in the pipeline, which will generate over 1500MW power for the national grid by next year. Since coming to power, the present coalition government has taken numerous steps to create an enabling environment for investment in renewable energy projects and now private sector investors have shown keenness to invest in this sector. Giving details, an official at the Alternate Development Energy Board (AEDB) on Sunday said the wind projects, which are in advanced stages of implementation, would produce 556MW. These are 50MW of Fauji Fertilizer Construction at the cost of $133.56 million, Zorlu Enerji Pak of 56MW at the cost of $143.60 million, Three Gorges Construction of 50MW at the cost of $134.75 million, Foundation-1 of 50MW at the cost of $128.69 million, Foundation-2 of 50MW at the cost of $128.70 million, Lucky Energy of 50MW at the cost of $132.53 million, Sapphire Power of 50MW at the cost of $128.87 million, Tenaga of 50MW at the cost of $129.67 million, Generasi Power of 50MW at the cost of $132.56 million, Master Energy 50MW at the cost of US $133.68 million and Gul Ahmed 50MW at the cost of $132.87 million. He said the projects, which are providing electricity to the grid, are sixMW Wind (Zorlu Energy), 7MW Biogas project by Shakarjang Sugar Mills, and 27MW plant at Al-moiz Sugar Mills in D.I.Khan. The official said AEDB had successfully completed a Rural Electrification Project under which 3000 Solar Home Systems were provided in 49 villages of district Tharparker, Sindh. He said the new projects from biomas to energy were also in advance stages and would add more than 60MW energy for the national grid and help control loadshedding. He said Nepra has also issued generation license to 14 companies to produce more than 200 MW energy. The official while giving details about solar projects, said the present government under its Parliamentarian Sponsored Village Electrification Programme (PSVEP), provided 119 Solar Home Systems to 34 villages of Deh Tiko Baran District Jamshoro, Sindh and 200 Solar Home Systems in six villages of Karak, District Khuzdar, Balochistan. The systems are operational and the users are satisfied as 29 new schemes under this programme have been prepared for implementation, he added.

Copyright Associated Press of Pakistan, 2012

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Thar coal viable option to provide energy security

Thar coal is the most viable option for providing security to the country. This was stated in a statement issued here from the Chief Minister House here on Saturday. It said that Pakistan has huge lignite coal reserves in Thar estimated to 175 billion tons. The quality of Thar Lignite Coal is at par or even better than the lignite mined in other parts of the world. The statement pointed out that renowned international companies like RWE Germany, SRK United Kingdom, Sino Coal China, North East Coal Bureau China and China Coal Technology and Engineering Group have done detailed feasibilities in Thar and all of them concluded that Thar Coal Mining is technically, economically and environmentally viable project and that this coal can be used for power generation and other petro chemical uses. Presently three companies viz, Sindh Engro Coal Mining Company, Oracle Coalfields UK and Sino-Sindh Resources China have completed their detailed feasibility studies and their projects of open cast mining are expected to start within this year. These three projects have total power generation planned in the first phase is 2,100 MW by 2016. The government is giving high priority to the development of Thar Coal by providing enabling environment to the project developers and required infrastructure like roads, water, transmission line etc.

Copyright Associated Press of Pakistan, 2012

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AJK to produce 8,000 megawatts of electricity in four years

Acting Prime Minister of Azad Jammu and Kashmir (AJK) Chaudhry Yasin has said that 8,000 megawatt electricity will be produced in Azad Kashmir in four years and provide to Pakistan. Talking to the media here at a "Meet the Press" programme at Lahore Press Club on Friday, he warned that if a long march would be held in Punjab then people from other provinces would also take out a long march against Takhat-e-Lahore. He said that not a single megawatt electricity was produced in the Musharraf regime or in Nawaz Sharif's tenure adding that it was the reason that people were facing load shedding crisis today. He said the Azad Kashmir government was evolving a comprehensive planning for promotion of tourism and national and international tourists would be facilitated under the programme. He said trade between Azad Kashmir and occupied Kashmir would benefit Kashmiris and will provide a chance to people to come closer to each other. Later, he presented a cheque for Rs 500,000 to Lahore Press Club President Arshad Ansari. LPC General Secretary Zulfiqar Ali Mehtu and Treasurer Afzal Talib were also present.

Copyright Associated Press of Pakistan, 2012

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Khyber Pakhtunkhwa to launch 24 HPPs to generate 2100 megawatts of electricity

The provincial government of Khyber Pakhtunkhwa will initiate 24 hydropower projects to generate 2100 Mega Watt electricity under its 10-Year Hydropower Generation Action Plan unveiled by Chief Minister, Ameer Haider Khan Hoti on the occasion of the ground breaking ceremony of 36.6 Mega Watt Daral Khawar power project in Swat. The action plan prepared in consultation with all political parties, which is comprised of short, medium and long terms. The plans will cost a hefty amount of Rs 330 billion. Khyber Pakhtunkhwa has the potential of generating 30,000 Mega Watt hydropower and 24 sites in this regard had already been identified, which would be implemented under public-private partnership. The sites of these projects are ready for construction and formal work in this connection would be launched shortly. Under the short term plan three projects with capacity of 56 Mega Watt would be completed within a period of three years, where as under medium term 8 projects with total capacity of generating 625 Mega Watt would be completed in five years and under long 10 years term thirteen projects with of 1322 Mega Watt would be completed.

Copyright Associated Press of Pakistan, 2012

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Pakistan can import electricity from Iran: Mashhad mayor

Mayor of Mashhad, Iran, Syed Muhammad Pejman has said that Pakistan can import electricity from Iran to overcome its energy crisis. Speaking at a meeting of Karachi Chamber of Commerce and Industry (KCCI) here on Thursday, he urged both the countries to consider taking advantage of existing opportunities to boost two way trade. He opined that private sector can play vital role to strength trade and economic ties between the two countries. He emphasised on the need of frequent exchange of delegations and participation in exhibitions held in each other countries from time to time. Identifying potential areas of co-operation he said that opportunities of co-operation existed in the areas of livestock, agriculture and mining. He pointed out that Iran was importing livestock from Brazil, which was far away and added the same can be imported from Pakistan. He noted that Iran's trade with other regional countries was higher as compared to Pakistan. President, Karachi Chamber of Commerce and Industry, Mian Abrar Ahmad, urged the governments of Pakistan and Iran to introduce banking channel and make arrangements for currency swap to enhance Pak-Iran bilateral trade. He was of the view that Pakistan was subjected to severe discrimination by the West and as a energy-hungry country we should not accept any dictation regarding Iran-Pakistan-India Gas pipeline project. "The project is need of the hour to overcome the energy crisis and for industrialisation," he added.

Copyright Business Recorder, 2012

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Energy woes: Siemens offers solutions

Siemens Oil and gas stall at POGEE, the International Oil and Gas exhibition at Expo Centre Karachi drew a lot of attention from the visitors that included customers, policy makers, media and oil and gas entrepreneurs from across the country and twenty other countries participating in POGEE. The Siemens stall offers end to end solutions in oil and gas and also in other sectors of energy as well as information on healthcare solutions available with the company. Customers demonstrated keen interest in power generation solutions including oil and gas and alternate energy solutions like solar, wind and bio mass. Some players in the field also approached Siemens officials at the stall for joint ventures. Earlier at the inauguration ceremony, the Chief Guest, Federal Minister for Overseas Pakistanis, Dr Farooq Sattar visited the Siemens stall and inquired about Siemens innovation. The Vice President Oil and Gas for Siemens Pakistan, Tahir Alyana and the Head of Communication and Government Affairs Siemens Pakistan, Zia ul Islam Zuberi received the chief guest on his arrival at Siemens stall. This year a record number of 200 companies have participated in POGEE that include names like Siemens, GE, Eland Cables, Agility, MAPNA and Gulf Oil and Gas as well as a large number of Chinese companies.-PR

Copyright Business Recorder, 2012

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Gilani urges UK power companies to invest in energy sector

Prime Minister Syed Yousuf Raza Gilani on Thursday urged the British power companies to invest in country's energy sector and help Pakistan meet its energy shortfall. Talking to the Secretary of State for Energy and Climate Change Edward Davey who called on him here at his hotel, Gilani said Pakistan has rich potential for solar and wind energy and was ready to give incentives to investors, interested in these areas. Prime Minister Gilani apprised him of the severe energy shortfall in the country that was having a negative impact on country's industrial growth and said a number of urgent measures were being taken to improve the situation. He appreciated the interest shown by the British investors. He said Pakistan was working on long-term projects to acquire natural gas for power generation, industrial and domestic needs, including the Liquified Natural Gas. The British Energy Secretary also noted the huge potential of Pakistan in the area of solar energy. He said the initial cost of solar generation was high, but it paid off in the end. Gilani said Pakistan has held talks with Korea and China in this regard, who were keen to invest in this sector and invited the British companies to exploit the potential. Edward Davey said Pakistan can also benefit from the successful use of power generation from waste. Prime Minister Gilani said Pakistan was already doing so in Punjab with the help of the Turkish government, however said that Britain can help Pakistan in this area in Karachi that produces huge amount of solid waste. Gilani on a point raised by the High Commissioner Wajid Shamsul Hassan said Pakistan government would further ease the problems of investors keen to invest in the country. Minister for Finance, Dr Abdul Hafeez Shaikh, Minister for Foreign Affairs, Hina Rabbani Khar, Minister for Climate Change, Rana Muhammad Farooq Saeed and MNA Asma Arbab Alamgir were present during the meeting.

Copyright Business Recorder, 2012

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POGEE 2012: need stressed to produce cheaper energy to reduce power shortage

The Federal Minister for Overseas Pakistanis Dr Farooq Sattar has said energy shortage and continuing melting down economy are the biggest issues and there is a need to produce cheaper energy to reduce power shortage in the country. He was speaking at the inaugural ceremony of 10th Pakistan Oil, Gas and Energy Exhibition 2012 (POGEE 12) organised by Pegasus Consultancy at Karachi Expo Center here on Tuesday. He said the energy sector should be given top priority over all other sectors including fertilisers. "We have to give top priority to the power generation so that the productivity could increase in the country", he said. For cheaper power generation, the energy sector should be given top priority in gas distribution to get rid of the load shedding in the country, he added. He said the country's economy was suffering due to power shortage, adding there was a need for reprioritising of gas distribution in the country. The energy sector should be given top priority and then other sectors including fertiliser sector, he said and added that "We can import fertiliser to meet domestic requirements while energy sector can get cheaper gas to produce electricity." He said electricity could be generated at a cost of four rupees per unit by using natural gas and this cheaper electricity could reduce the cost of production in the country and cut import of furnace oil. "The production of cheaper electricity can control the down slide and melting of country's economy", he added. He also stressed for using alternate energy resources to generate much needed electricity for moving the wheels of national economy and reduce the duration of long hours load shedding. He pointed out that overseas Pakistanis could play a vital role in housing sector and oil and gas exploration in the country, and opined that overseas Pakistanis were also helping the country by remitting more than 12 billion dollars every year. Lauding the efforts of the organisers, the Minister said this event which was portraying the potentials of three vital sectors of Pakistan would give a boost to country's economy. Dr Sattar noted that economy dictated politics in today's global era and therefore an integrated approach was required to improve the economy, and said that sovereignty of a country was dependent on sustainable economy. Ambassador of Czech Republic, Meeroslav Krenek said that leading high technology Czech companies were displaying high-tech machine tool products and hydro-electric power plants. Czech companies could provide cheaper solutions for handling energy crisis in Pakistan, he further said. Commissioner Karachi Roshan Ali Shaikh hoped that the exhibition would provide an important platform to display technology and help local industry to benefit from this technology. Chairman Pegasus Consultancy Aasim Siddiqui in his welcome address said that leading companies from 30 countries including China, Germany, US, UAE, Iran, India, Italy, Qatar, were displaying their latest products at about 300 stalls and two country pavilions of Belgium and Czech Republics in four halls. Later, the minister visited various stalls and appreciated the product and technology on display.

Copyright Business Recorder, 2012

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Pakistan has potential of 2.3 million megawatts of solar power

Pakistan has a potential to generate over 2.324 million mega watts electricity per annum through solar system and industrialists should come into manufacturing in this sector for domestic as well as industrial use in order to overcome prevailing energy crisis in Pakistan, this was stated by Vice Chancellor, Hamdard University (HU), Dr Nasim A Khan. Giving a presentation on solar power in Pakistan organised by Korangi Association of Trade and Industry (Kati) with the collaboration of Engineering Review on Wednesday, Dr Nasim said that solar and wind powers are the real sources of energy and rest of the sources are alternative. He said that HU is ready to provide technology of solar power to the industrialists free of charge so that country would be able to benefit from cheapest sources of energy. He said that though solar panels are expensive presently however, commercial manufacturing would make them cheaper and viable for all consumers. He further emphasised on manufacturing of all components of solar system locally in order to make them viable for the local as well export market. He informed that many countries USA, Germany, Australia, Brazil, UK, Japan, India, China and Thailand are now generating electricity in bulk through solar system. He disclosed that Japan is generating electricity at the cost of only two cents per kilo watt hour (KWH). He said that Pakistan needs to put 2,000MW electricity into the national grid every year and this could only be possible through solar and wind power. He said that UK which has less than half the population than Pakistan was generating 70,000MW in 1970 whereas Pakistan is generating merely 22,000MW at present. Chairman Kati, Ehtesham Uddin has announced to extend all out support to the HU for the promotion of solar powered technology and offered to co-ordinate with Dr Nasim and industrialists to manufacture solar panels for domestic and industrial use. He said that switching over to the solar system for energy is the need of the hour and more people and scientists like Dr Nasim should come forward for this cause. President All Karachi Industrial Alliance, Mian Zahid Hussain said in his address that solar and wind power are the need of the hour and future belongs to them as they are cheapest sources of energy. He said that Kati would constitute a committee comprising its Standing Committee Chairman on Alternative Energy, S M Yahiya, Farhanur Rehman, Tariq Malik, Anjum Ayub and Junaid Naqi to co-ordinate with Hamdard University for introduction and promotion of solar system in industrial sector. Mian Zahid pointed out that none of the government measures were proved to be fruitful for saving energy and there was no respite in load-shedding.-PR

Copyright Business Recorder, 2012

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Chinese investors urged to disregard ''small'' hurdles

Minister for Water and Power Syed Naveed Qamar has urged Chinese investors to disregard small hurdles and honour friendship with Pakistan. The second Pakistan-China Joint Energy Working Group (JEWG) led by Wu Guihui, Engineer-in-chief of National Energy Administration of China (NEA) as well as top Chinese energy sector investors concluded on Tuesday in Islamabad. "We believe that Pakistan-China friendship is higher than the Himalayas; the issues (relating to energy projects) mentioned are small and are not deeper than our friendship and so must be ignored," Naveed Qamar added. According to the minister, Pakistan was facing complex changes and new challenges in the field of energy, most important of which was the electricity demand-supply gap. According to him, the government was committed to resolving the prevailing energy crisis and attain energy security on a sustainable basis with China's active support. "According to estimates, there is currently a deficit of around 6,000 megawatts in our electricity system, which could further grow in future because of rapidly increasing growth in power demand," Qamar maintained. He said that while growing energy demand is a big challenge for the government, yet it provides immense opportunities for Chinese investors to participate and share the benefits. Projects which came under discussion at the meeting are: (i) Sindh-Engro coal mining; (ii) 1200MW coal-fired power plant; and (iii) Sino-Sindh Resources coal mining and 900MW coal-fired power plant. In hydel projects, the central focus was on 969MW Neelum-Jhelum hydropower project, 4,500MW Diamer-Bhasha dam and 1,100MW Kohala hydropower project. Transmission system projects included: (i) 500 kV Guddu transmission line; (ii) 220-kV Uch-II transmission line; (iii) dispersal of power from Neelum-Jhelum, Kohala, Karot and Azad Pattan hydropower projects; (iv) Thar-Matiari transmission line project; and (v) dispersal of power from 630MW Chashma Nuclear C3 and C4. In renewable energy, the three following projects came under discussion such as United Energy Pakistan Limited, 150MW, China Three Gorges, 50MW and Hydropower China 100MW. Other projects that may come under discussion in future are: 425MW Nandipur thermal power project, 548MW Kaigah hydropower project and 640MW Azad Pattan hydropower project. "Pakistan is also receiving enormous support from the Chinese side for the installation of new nuclear power plants at Chashma, despite international pressure which reflects the strength of friendship between the two countries," Qamar said. Sources said that the Chinese delegation raised a number of questions over the projects offered by government for investment. Chairman Wapda Shakil Durrani, officials from power sector, representatives of Water and Power Ministry and Board of Investment (BoI) gave detailed answers to queries of Chinese investors. List of Chinese delegation is as follows: Shi Lishan Deputy Director-General, of NEA China's Department of International Co-operation, China, Zhang Shuang of NEA, China, Liao Hongbiao, Programme Officer, NEA China, Zheng Xia of China Three Gorges International Corporation and Vice President, DEC Ltd International Zhang Guorong, Vice-President of China Three Gorges International Corporation China Wang Shaofeng, Manager of China Three Gorges International Corporation China Shen Zhendong, Vice-President of Dongfeng Electric Corporation (DEC) Ltd China Han Zhiqiao, Qin Yonghong and Li Gang, the Country Manager of export-import Bank of China.

Copyright Business Recorder, 2012

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China, Pakistan sign three wind projects

China and Pakistan on Tuesday signed three wind projects which included inking Letter of Indent (LoI) on 150MW wind energy project between United Energy Pakistan Limited (UEPL) and China Development Bank Co-operation (CDBC), inking MoU on 350MW wind energy project between Three Gorges and Pakistani authorities and a document inked between Dawood Power Private Limited (DPPL) and Hydro China Engineering Company Limited. Pakistani authorities also expressed keen interest over the proposal of Infrastructure Fund (IF) discussed in last JEWG meeting held in Beijing on August 2011 and stressed on formation of Banking Consortium to finance the infrastructure development. Addressing some concerns of Chinese enterprises, head of delegation, Wu said that Infrastructure Development is the need of the hour to mature the ongoing and forthcoming energy development projects for easy transportation of machinery and equipment on the site.

Copyright Business Recorder, 2012

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Chashma-3 and Chashma-4: Rs 32 billion to be allocated to nuclear power plants

The government has decided to allocate Rs 32 billion for two nuclear power plants ie Chashma three and Chashma four in Public Sector Development Program (PSDP) 2012-13. The projects are in progress with Chinese assistance. The government has also decided to conduct survey and feasibility studies of six additional nuclear power plants besides development of project team for site and installation of 300 MW and 1000 MW nuclear power plants. Official documents reveal that the Ministries/Divisions had sought Rs 750 billion for development projects but the priorities committee recommended only Rs 350 billion for PSDP. Some major demands came from NHA, Rs 111 billion, Pakistan Atomic Energy Commission Rs 53 billion, power/Wapda Rs 191 billion, water sector Rs 153 billion and HEC Rs 22 billion. However, owing to approved ceilings, Ministries/Divisions were pressed to remain within IBC and allocate sufficient funds to some of the following critical projects / programs, on priority, for their timely completion. According to documents, for Diamer Basha dam - at least Rs 22 billion have been proposed during 2012-13 for land acquisition. Ministry of Water & Power however demanded Rs 42 billion for this purpose. The balance will be provided by Wapda from own resources. To complete Mangla dam raising project and impound water during next rainy season, Rs 6.0 billion have been proposed. Rs 32 billion proposed for Chashma nuclear plants (C3, C4) of PAEC. The new projects proposed to be initiated during 2012-13 are as follows: (i) Railways will start mechanisation of tract maintenance project costing Rs 48.0 billion; (ii) doubling of new tracks will start from Shahdara to Lalamusa and from Shahdara to Faisalabad at a cost of Rs 24 billion; (iii) rehabilitation of NHA highways network at a cost of Rs 24 billion; and (iv) nuclear fuel enrichment plant costing Rs 14 billion. In the overall PSDP size of Rs 350 billion, foreign assistance has been estimated at Rs 90.8 billion. The sources said, in the light of priorities committee meetings, new unapproved schemes and new schemes for capacity building or for construction of housing were deleted. Schemes of capacity building, which were reviewed by Deputy Chairman Planning Commission, Dr Nadeem ul Haq and decided to close by June 2012 were deleted. Planning and Development Division has already deleted 14 such projects from its PSDP. A new PC1 on capacity building is in the process of approval, which will cater for requirements of other ministries/divisions also. Schemes which were devolved to provinces and included by sponsoring ministries were deleted.

Copyright Business Recorder, 2012

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South Korean company to set up 300 megawatts solar energy plant in Sindh

Ko Young Sun, head of a visiting Korean delegation, said that Global R&BD Division of CX Korea will establish 10 MW solar energy plant which will later be extended up to 300 MW. The project will be initiated after completion of formalities of Nepra and Ministry of Water and Power, he said while heading a four-member delegation during a meeting with Chief Minister Sindh Syed Qaim Ali Shah at Chief Minister House here on Monday. He informed that the 10 MW plant will be ready by December 2012 and first the plant's capacity will be extended up to 100 MW while later it will be extended up to 300 MW by 2015. He informed that Germany and Korea had made good achievements in solar energy, and Korean Global construction will fulfill the requirements and initiate and complete the project as per commitment. He informed that KAPCO-DAEWOO Engineering will provide project financing and for the purpose they required 1200-acre land for 300 MW project. Chief Minister Sindh welcomed the Korean delegation interested in Solar Energy Project to be initiated and established in Sindh Province. He said that the provincial government has made arrangements for provision of infrastructure and facilities to the investors. The Chief Minister appreciated the briefing by Korean delegation and hoped that solar energy project will bring power generation for the development and progress of province. Syed Feroz Shah, Nasreen Ali, Director General BOI, Prime Minister Secretariat, Principal Secretary to CM Agha Jan Akhter and others were present on the occasion.-PR

Copyright Business Recorder, 2012

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Turkish team meets Punjab chief minister

Punjab Chief Minister Shahbaz Sharif has said that Pakistan and Turkey have great potential of investment in various sectors and both the countries should exchange technology and technical expertise. He was talking to a delegation of power generation companies of Turkey here on Friday. Chairman Lahore Transport Company Ahmad Hassaan, Vice-Chairman Mehr Ishtiaq, Chairman Planning and Development, Secretary Finance, Secretary Energy, Managing Director Solid Waste Management Company, Vice-Chairman Punjab Investment Board and District Co-ordination Officer Lahore were also present on the occasion. The Chief Minister appreciated Turk co-operation in bus rapid transit system and modernising solid waste management system in the province. He said that Punjab offered vast opportunities for investment in energy sector and the Turk companies should launch power generation projects from solid waste Speaking on the occasion, the Turkish delegation described Allama Iqbal's poetry as a spiritual gift for the people of Turkey and said that his thought-provoking poetry was heart-warming for the Turk people.

Copyright Business Recorder, 2012

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South Korea shows keen interest in setting up solar power projects

South Korea has expressed keen interest to invest in setting up solar power projects of 300MW power as the government plans to announce upfront tariff for solar technology very soon. To discuss the proposal, a delegation led Dr Choi-moon-sok, Chief Executive Officer of Concentrix Solar of Korea called on Federal Minister for Water and Power Syed Naveed Qamar on Wednesday. According to an official statement, Dr Choi said that the company has planned to set up first project of 50MW within eight to 10 months while the total duration for 300MW will be three years. The projects will be both off-grid and on-grid and mostly will be established in Sindh province. He also informed that the first initiative will be conversion of Prime Minister's House into solar power and it will be gift from Korea to Pakistan. The House will be converted to solar within three to four months and will be off-grid backed by Batteries. Chandka Medical College, Larkan and Civil hospital, Hyderabad are already being shifted to solar technology with the Korean loan. Naveed Qamar while welcoming the delegation appreciated Korean company for showing interest to invest in the power sector. He said that upfront tariff would be announced soon for solar projects in order to encourage investors in this sector.-PR

Copyright Business Recorder, 2012

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SAARC region has 200,000MW hydel power capacity: experts

Despite having 200,000 mega watt hydel-power generation capacity, the South Asian Association for Regional Co-operation (SAARC) region is facing acute energy shortfall of over 60,000 mega watt, experts said at a regional conference here. They said that the political will and collective wisdom were needed to help tap this potential for the benefit of regional countries. The regional conference titled "climate Change, Energy and Water Management in South Asia," was organised by SAARC Chamber of commerce and Industry (SAARC CCI) in collaboration with Friedrich-Naumann-Stiftung fur die Freiheit. Speaking on the occasion, Chairman National Disaster Management Authority (NDMA), Zafar Iqbal Qadir said that energy was the pre-requisite for the development as it is the engine for economic growth. He said that South Asian region has enormous energy potential which needed to be exploited through political and collective wisdom to make the region self-sufficient in energy sector. He said that climate change was a continuous phenomenon so there is need to focus on developing strategies to cope with its negative effects adding the region has been hit hard by natural calamities during last couple of years. He observed that floods of 2010 have inflicted loss of Rs 900 billion to the national economy while the country was also hit by earthquake in 2005. He also urged the environmentalists to focus on forestation to check land erosions and prevent floods. He also asked industrialists to focus on Research and Development to produce energy efficient machinery and thereby help cost effective production to compete in the international markets. Former Federal Minister for Science and Technology, Muhammad Azam Khan Swati while speaking on the occasion highlighted the importance of striking balance between economy and environment. He said that the developed countries were responsible for environmental pollution so it is their responsibility to share the financial burden for ensuring clean environment. He further said that regional mechanism and legal framework was needed for taking full benefit of the energy resources in the region by engaging in collective efforts. Swati said that seven economies of Asia would be sharing 45% of the told GDP of the world it is the opportunity for the regional countries, to take advantage of this situation. He, however deplored that despite huge coal resources the country was facing energy shortfall adding India was producing 58 percent energy through coal gasification but the situation is quite opposite in Pakistan. On the occasion, Director SAARC Energy Centre Pakistan, Hilal A.Raza gave a detailed presentation on managing energy crisis through shared vision and energy trade and co-operation in south Asia. On the occasion, Senior Research Fellow and Executive Director, Sustainable Development Policy Institute, Abid Qaiyum Suleri said that globalisation had faster and deeper impacts. He stressed the need for reconstructing planning and shifting priorities for taking benefit of regional potential. Vice President SAARC CCI, Iftikhar Ali Malik while speaking on the occasion said that SAARC fund should be created to finance regional projects. He said the environmental sustainability was crucial for development, however the South Asian region was vulnerable to climate change so strategies needed to be devised to cope with the challenges. Secretary General Muhammad Iqbal Tabish and former Executive Council Member SAARC CCI, Zubair A. Malik also spoke on the occasion.

Copyright Associated Press of Pakistan, 2012

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