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News Headlines for the month of
JULY 2012

Renewable power projects: SBP enhances capacity limit

The State Bank of Pakistan (SBP) has enhanced the capacity limit of all renewable power projects from 10MW to 20MW for financing under the ''Scheme for Financing Power Plants Using Renewable Energy.'' Banks/Development Finance Institutions (DFIs) can consider financing requests of the sponsors, who intend to set up Power Projects up to a maximum capacity of 20MW, using all types of renewable energy sources eligible under the Scheme, says IH&SMEFD Circular Letter No 11, issued to the Presidents/CEOs of all banks/DFIs on Monday. The maximum financing limit to a single renewable power project under the Scheme has also been fixed at Rs 3 billion to accommodate larger number of borrowers. However, banks/DFIs may continue to provide financing facilities as per their credit policies over and above the maximum limit from their own sources subject to adherence to the Prudential Regulations, the Circular Letter added. SBP has taken these steps to promote power plants using Renewable Energy in the country after receipt of feedback from the Alternative Energy Development Board (AEDB).

Copyright Business Recorder, 2012

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Punjab government unfolds Rs 10 billion energy action plan

The Punjab government has launched energy development action plan at a cost of Rs 10 billion for execution of power projects based on renewable resources such as hydropower, solar and wind coupled with electricity generation based on other indigenous fuel resources such as oil, coal and gas during this year. Planning and Development sources told Business Recorder that the provincial government is aiming to utilize all available sources in the province to provide affordable energy to all segments of economy through increase in generation and conservation of energy with participation of both public and private sectors. They said that the government is accelerating implementation of public sector projects under the ADB-credited 'Renewable Energy Development Sector Investment Programme (REDSIP)' and introducing appropriate technologies that promise quick indigenization of cheaper sources including solar, coal, biomass and biogas. The government energy developers said that under its pioneering public sector program envisaging fast-track development of renewable energy resources action plan in the province, Punjab has actively embarked upon implementation of the ADB-assisted "Renewable energy Development Sector Investment Program (REDSIP)" for construction of five (5) hydropower projects at Marala (Sialkot), Chianwali (Gujranwala), Deg Out Fall (Sheikhupura), Pakpattan (Pakpattan), Okara (Okara) with cumulative installed potential of 25 MW and annual generation of 140 GWh. 'Out of these execution contracts under International Contract Bidding (ICB) for Marala (7.64 MW) and Pakpattan (2.82 MW) have been awarded and the contracting Joint Ventures have started detailed designing to undertake these turnkey projects", they added .They further said that bids on Deg outfall (4.04 MW), Chianwali (5.38 MW) and Okara (4.16 MW) are presently under evaluation for award. Further, feasibility appraisals are in progress for development of five (5) additional hydropower sites at barrages and canal systems (Khanki and Qadirabad barrages and LCC, UCC and QB Link Canals) to have total installed capacity of 55 MW with annual energy generation potential of 206 GWh. Under a separate initiative, a detailed technical feasibility study has also been launched to investigate 120 MW power generation potential at the Taunsa Barrage, they added. Energy sector experts say that that Pakistan has been experiencing the worst energy crisis in its history since 2007. Total installed electricity generation capacity of Pakistan is 22,668 MW with demand growing at 8 percent annually. Power shortage in the industrial, agricultural and domestic sectors cumulatively compounded to critical proportions during the year 2011 when gap between peak demand and supply exceeded 7000 MW. Punjab consumes 68 percent of the total electricity generated in the country and is coping with severe energy shortfalls that have very adversely hit its targets for annual GDP growth rates of 6 percent for the past many years. Since revision of the Punjab Power Policy in year 2009, the province has accelerated activities toward envisaged action plans for renewable energy development in the province. After establishment of the Punjab Power Development Company Limited (PPDCL) to implement the ADB-assisted five low-head hydel power projects in public se ctor and the Punjab Power Development Board (PPDB) to facilitate power sector investments in private sector. An independent Energy Department has also been established by government of Punjab in 2011 to plan, oversee and administer the development, growth and regulation of energy sector in Punjab.

Copyright Business Recorder, 2012

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Nine wind projects may add 800 megawatts power to grid by next June

Some nine wind power projects are expected to add 800 MW power on grid by June 2013. This was stated by Secretary Investment Naheed Shah Durrani at fifth Board Meeting of Sindh Board of Investment held at SBI office here on Wednesday. While giving brief overview of SBI's performance during 2011-12, she also briefed about recent policy reforms for development of Wind Energy sector of Sindh. It was elaborated that Sindh Wind Corridor possessed immense potential to produce about 50,000 MW of energy. The Board was informed that land had been allotted to 30 projects with installed capacity of 1,947 MWs. Out of which nine projects commissioned on fast track are expected to obtain CoD before June 2013 with approx 800 MW power on grid by June 2013. Earlier, SBI Chairman Muhammad Zubair Motiwala said the investment promotion in the province could only be done with collective efforts of Public and Private sector. He said that serious efforts were also being made for containment of energy crisis in Pakistan through multiple measures. Other than promoting investments in Thar Coal, Sindh's Wind Corridor, the SBI is working closely with private sector to examine interventions under solar energy. SBI Chairman said coal was the new energy future of the province and the country. Board members also endorsed the proposal for constitution of sector committees for facilitation of sector specific investment promotion activities in the province.

Copyright Business Recorder, 2012

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'Thar coal, KBD projects vital for industry'

Projects like Thar Coal and Kalabagh Dam are among best choices for power generation to overcome energy shortfall in the country. Vice President, Anjuman Tajran Sanitary-ware Mian Muhammad Saleem said in a statement here on Sunday. He said that the Akhori dam project could not be a substitute to the Kalabagh Dam as power generation capacity of KBD was almost 600% more than Akhori. He said that sanitary-ware was among the worst power shortfall affected industries of the country and demanded urgent steps for its revival. He said that use of generators to produce electricity to meet production demand in small industrial units was neither viable nor economical. Industries, like sanitary-ware, needed cheap electricity which can only be obtained through hydro or coal resources, he said and expressed hope that the government would make efforts to develop consensus among provinces for starting the KB dam and other big electricity generation projects.

Copyright Associated Press of Pakistan, 2012

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250KV Kalash hydropower project Construction work inaugurated

The construction work on 250KV Kalash hydro power project was inaugurated in Kalash valley for electrification the entire valley. A function was held in this connection where District Co-ordination Officer (DCO) Chitral Rahmatullah Wazir was the chief guest. Addressing the occasion Engineer Temour Shah, Co-ordinator of Rural Community Development Programme (RCDP) informed that new Kalash hydro power project will bring revolutionary change in Kalash valley. He thanked the USAID and National Rural Support Programme for providing financial assistance for the power house. He informed that the entire electricity needs of Kalash valley were now fulfilled from micro hydro power stations on self help basis and no national grid station's power was utilized here. The DCO in his address stressed upon the technical staff for appropriate arrangements at the site of the project to save it from flood and other natural disaster. He said the district administration was encouraged all those organisations and donors who donate and invest in Chitral for uplift of this backward district. He said Chitral has the potential to generate 10,000MW electricity, adding, the provincial government had also kicked of a number of hydro power projects in the entire district. He said these projects on completion will bring a bright future for Chitral and generate vast opportunities of employment for Chitrali people. He said District Administration has included construction of Bashalini for Kalash women in Annual Development Program (ADP). He thanked to civil society for playing vital role in development of Chitral and assured that all possible supports will be rendered to those who work for uplift of Chitral.

Copyright Associated Press of Pakistan, 2012

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Conversion of oil-fired power units: power minister to seek China''s help

Minister for Water and Power Ahmad Mukhtar is leaving for China on a week-long visit to seek cooperation for conversion of furnace oil-fired public sector power generation units on local coal and wind projects, sources told Business Recorder on Friday. The Minister for Water and Power will be accompanied by two close associates - Chairman Wapda Shakil Durrani and Acting Managing Director Naveed Ismail whose appointment has not yet been approved by the NTDC''s Board of Directors. Sources in the Water and Power Ministry said that Ahmad Mukhtar''s visit was a follow up of President Asif Ali Zardari''s visit during which various energy sector projects were discussed. The Minister, sources said, would also hold meetings with China''s Three Gorges Corporation for establishing 50-megawatt wind farm project in Sindh with an investment of $130 million. The sources said that the Chairman Wapda, who is aspiring for a three-year extension in his tenure, wouldalso discuss 969MW Neelum-Jhelum hydropower project during the visit. The project has witnessed a massive cost escalation of Rs 331 billion against the original estimate of Rs 84.5 billion. The project was approved in 2002 but did not begin construction because of Wapda''s poor planning. Financial progress as stated by the Planning Commission has been recorded at 37 per cent (44 per cent of the approved cost). Allocation in 2011-12 was Rs 10.8 billion but the Finance Ministry released just Rs 4.8 billion. The sources said that the Chairman Wapda was also likely to discuss issues relating to electro-mechanical equipment besides 96MW Jinnah hydropower project in Mianwali.

Copyright Business Recorder, 2012

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Resolving energy crisis: Raja urges Riyadh to provide assistance

Prime Minister Raja Pervez Ashraf Monday had an audience with King of Saudi Arabia and custodian of two Holy mosques Abdullah bin Abdul Aziz and discussed bilateral relations, situation in the region and international issues. The Prime Minister was accompanied by Federal Minister for Religious Affairs Syed Khurshid Shah, Pakistan''s Ambassador to Saudi Arabia Muhammad Naeem Khan and other officials while Saudi Crown Prince Salman bin Abdul Aziz , Saudi Foreign Minister Prince Saud al Faisal, and Saudi ambassador to Pakistan Ibrahim Abdul Aziz al-Ghadeer and other high officials represented by Saudi side. The Prime Minister Raja Pervez Ashraf briefed the King Abdullah about measures being taken by Pakistan for the peace, progress and stability in the region and especially Pakistan''s role in finding peaceful settlement of Afghan issue in accordance with the aspirations of Afghan people. The meeting which lasted for more than the scheduled time and the Prime Minister Ashraf told the King Abdullah that Pakistani people considered him leader of Islamic Ummah. The Prime Minister extended greetings to King Abdullah on behalf of President Asif Ali Zardari. The Saudi King welcomed the Prime Minister as representative of people of Pakistan. He told the king that he seeks guidance from him to overcome the difficulties being faced by the people of Pakistan. The King said Pakistan is not a new friend and its friendship is not new and thanked Pakistan Diaspora who considered Saudi Arabia as their second home. The Prime Minister shared sorrow and grief over the passing away of former Crown Prince Nayef bin Abdul Aziz. He told King Abdullah that people of Pakistan offered namaz-e-janaza for the departed soul of former Crown Prince Nayef bin Abdul Aziz that indicated strong affiliation of the people of Pakistan with Saudi Arabia. The Prime Minister renewed his invitation to the Crown Prince Salman bin Abdul Aziz to Pakistan and he accepted the invitation and said that the date will be finalised mutually. The King asked the details on Pak-India relations, and the Prime Minister said these relations are improving with the continuation of dialogue process between the two countries. Appreciating the improvement in Pak-India relations and expressing satisfaction on these ties, the King Abdullah said that these improved relations will be beneficial for the people of two countries. The Prime Minister apprised the King about the efforts of Pakistani government to improve its relations with its neighbours. Afghan situation came under discussion during the meeting between King Abdullah and Prime Minister Raja Pervez Ashraf. The Prime Minister informed King Abdullah that he will visit Afghanistan on 19th of this month and meet with Afghan President Hamid Karzai to further improve Pak-Afghan relations and ensure peace, stability and security in the region. The Prime Minister thanked King Abdullah and the Saudi government for extending help to Pakistan in the need of hour especially during the last floods and earthquakes. The King said, "We are not taking any credit for this help and assistance, it was our duty to help brothers and sisters in Pakistan in case of any natural calamity." During the meeting, Prime Minister Raja Pervez Ashraf especially mentioned the road map for building enhanced strategic dialogue between the two countries. The Prime Minister also apprised the progress in war against terror, situation in Fata, and sought the help and assistance from King Abdullah to resolve the energy crisis in Pakistan. King Abdullah told the Prime Minister that Saudi Arabia will extend its full co-operation and assistance to resolve energy crisis and said concerned minister will visit Pakistan in this regard. The Prime Minister while discussing the question of food security in Pakistan asked the Saudi investors to invest in Pakistan in agriculture sector.

Copyright Associated Press of Pakistan, 2012

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Inauguration of Khan Khwar hydropower project

The 72 mega watt (MW) Khan Khwar High-head Hydropower Project will be formally inaugurated on Saturday (today). The project will provide 306 million units of low-cost electricity per annum to the National Grid. Annual benefits of the project have been estimated at more than Rs 2.75 billion. The project has been constructed on Khan Khwar (Nullah), a right bank tributary of River Indus near Besham town in District Shangla of Khyber Pakhtunkhwa province some 265 kilometers from Islamabad and 350 kilometers from Peshawar on Karakuram Highway. Main component of the project includes a 46-meter high and 112-meter long dam, about 5-kilometer long tunnel, power house and a switch yard. The project is connected with the National Grid through 132/220 Kilo Volt (KV) transmission line constructed for three high-head hydropower projects. The project has been completed with a cost of Rs 10.73 billion that includes Rs 5.049 billion as foreign exchange component. Islamic Development Bank provided a loan amounting to $30.8 million for the project. Khan Khwar Hydropower Project is a part of least-cost energy generation plan of WAPDA being executed on priority in view of the increasing demand of electricity in the country. Under the plan, 17 large projects are under construction/at detailed engineering stage, which will generate more than 20,000 MW of electricity. Of them, six hydropower projects with cumulative generation capacity of about 400 MW will be completed during the current year.

Copyright Business Recorder, 2012

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Solar energy generation: Elahi asks engineers to prepare strategy

Deputy Prime Minister and Pakistan Muslim senior central leader Ch Parvez Elahi said on Tuesday that Pakistan's weather is best for solar energy; as such we should pay maximum attention to generate solar energy. He said this while addressing a meeting of the Board of Directors of the Engineering Development Board (EDB). The meeting also approved the EDB's budget for new financial year. Elahi said that for overcoming the energy crisis in Pakistan, our engineers should chalk out immediate and effective planning for energy generation. He said US, China, Egypt and Germany are fully benefiting from solar energy and developed countries are promoting use of solar energy in view of the growing requirement for oil in the world. He said Pakistan is an agricultural country but farmers are facing problems due to inadequate supply of electricity as such use of solar energy for operating maximum number of tube wells would reduce burden on Wapda. The Deputy PM said that in the first phase we are planning to install 2 to 4 megawatts units on experimental basis from which the agriculture sector would benefit. He said countries like China, Germany and India are providing facilities to the farmers through solar energy. Chief Executive SPEL Almas Haider in his briefing said that we have started planning in co-operation with China for establishing new surgical plant and have also selected the site along Makran coast for producing power through wind. Presently China is producing 80 per cent power through coal, he added. He said Pakistan has also rich coal reserves but this is wet coal adding that China has offered to produce power through use of the wet coal even. He said presently India is producing 40 per cent of energy through coal whereas Pakistan is producing only one-per cent power through coal. In order to save the agriculture sector from energy crisis, our Engineering Department wants to introduce solar energy at small level, he added. He said solar energy operated tube well could irrigate land up to 10 acres and it would cost only Rs 1.5 million. The meeting was attended by Additional Secretary Industries Agha Nadeem, G.M. Sikandar, Chairman Indus Motors Suhail Ahmad, President Honda Atlas Company Amir Haider Sheerazi, General Manager Companies Khalid Latif and Chief Executive Private Companies Ejaz Niazi among the others.

Copyright Business Recorder, 2012

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Industrialists invited to invest in power-generating units, tourism: AJK President

President Azad Jammu and Kashmir, Sardar Muhammad Yaqoob Khan has invited business community to invest and establish industrial and power generating units in Azad Kashmir. Addressing members of Federal B Area Association of Trade and Industry (FBAATI) after laying foundation stone of FBAATI building complex and later talking to newsmen on Thursday, he said that Kashmir is the most peaceful area in the region and offers lucrative investment opportunities in power generation and tourism in particular and other areas in general. He said that Azad Kashmir has immense potential for new investment in various fields. The president said that Kashmir has potential of generation 15,000 to 18,000MW power, which can be supplies to meet the demand of Pakistan. He said that industry of tourism and fruit processing units could be set up and the labour will be available very cheap, as Kashmiris come all the way to Karachi to work in industries. "It will help stop migration of work force from Kashmir," he said. The AJK President said that there was no infrastructure problem by virtue of network of roads and small hydel projects which help cover energy needs of the industries. Sardar Yaqoob said that during his meetings in Karachi with businessmen of various sectors of economy, he had a feeling that the community here was keen to establish trade ties with Kashmiri counterparts. He was of the view that instead of looking towards foreign investors we must look towards local investors and proved them necessary facility to invest in Pakistan and Azad Kashmir. He also invited business community to visit Azad Kashmir to see and evaluate investment opportunities and make plan for investment. He assured that AJK government is ready to provide what ever incentives to business community requires including tax holiday, free of cost land for establishing industrial units besides assuring continues power supply. The president further pointed out that Azad Kashmir produced best quality of apple and other fruits and added that a large quantity of its goes waste due to non-availability of cold storage facility. Chairman FBAATI, Masroor Alvi expressed concern over air flight from Pakistan due to prevailing law and order condition, economic crisis, power and gas high tariff and shortage. However, he was of the view that offering free of cost land and other facilities for establishing industrial units in Azad Kashmir will definitely attract Pakistani investors. He said that the association has taken an imitative to start construction of its building complex, which will house offices and shops.

Copyright Business Recorder, 2012

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Jaggran-II hydro-power project: France to provide 68 million euro

France on Friday inked an agreement with Pakistan to fund the 48MW Jaggran II Hydro-power project to help the country meet its energy crisis. The agreement was signed by Iftikhar Ahmed Rao, Additional Secretary of Economic Affairs Division (EAD), Philippe Thi''baud Ambassador of France, and Nicolas Fornage, Country Director of the French Development Agency (AFD). Under the agreement besides the soft loan of 68 millions Euros to Pakistan, Agency French Development (AFD) is also providing a grant for capacity-building of HEB. To reduce the power demand, AFD is co-financing with Asian Development Bank a multi-tranche programme on energy efficiency in domestic and industrial sectors. To improve the power supply, AFD is supporting the development of renewable energies, currently with Jabban, 22MW project in Malakand District, and Jaggran II hydropower projects. PROPARCO, a subsidiary of AFD for the private sector development, has also invested 40 million Euros during the last 3 years in the energy sector, including the New Bong Escape Hydropower Project; and is looking forward to supporting Independent Power Producers, energy efficiency, agro-industries and microfinance. AFD has also recently approved a soft loan of 11 million Euros to fund detailed design studies for the Munda hydropower project, located in Mohmand Agency. As a member of the Group of Friends of Democratic Pakistan, France pledged 300 million euros at the Tokyo ministerial conference in 2009. With the funding agreement for Jaggran II signed with EAD, France has now a portfolio of projects amounting to 213 million Euros for the water and energy sector in Pakistan, corresponding to 73 per cent of its pledge. The project entails construction of a 48MW Hydropower Plant located about 90km north-east of Muzaffarabad city. The project will be built in the upper extent of Jaggran Nullah, a right bank tributary of the Neelum River. It will be located downstream of the existing 30.4MW Jaggran I hydropower project, funded earlier with French support, and being operated since 2000 by the Hydro-Electric Board (HEB). Jaggran II Hydroelectric Power Project will operate as a run-of-the-river scheme and will not entail any major environmental or social constraints. It will be connected to the national grid, and will help alleviate the energy crisis in Pakistan. Upon its commissioning in 2015, it will provide a reliable source of renewable energy and a permanent supply of electricity for the 1.2 million people living in the Muzaffarabad area, with strong social and economical positive impacts.

Copyright Associated Press of Pakistan, 2012

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TAPI gas pipeline: roadshows to be held in London, New York, Singapore

Turkmenistan, holder of the world''s fourth-largest natural gas reserves, said on Saturday it would hold roadshows in September-October for investors willing to take part in the TAPI project aimed to ship Turkmen gas to India via a trans-Afghan pipeline. Turkmenistan agreed in May to supply natural gas to Pakistan and India via Afghanistan by signing gas sales and purchase agreements with Pakistan''s Inter State Gas Systems and Indian state-run utility GAIL. The US-backed, 1,735-km (1,085-mile) TAPI, named after the initial letters of the participant nations, is a major boon for Turkmenistan which is seeking to diversify its energy exports from its traditional market, Russia. The project also promises major benefits to energy-hungry regional rivals India and Pakistan. "The TAPI project will ensure long-term (annual) shipments of over 30 billion cubic metres (bcm) of Turkmen natural gas to the countries of Southeast Asia," state television showed Turkmen President Kurbanguly Berdymukhamedov as telling a government meeting late on Friday. Souring official optimism, many analysts point to TAPI''s 735-km (450-mile) leg that would run through the Afghan provinces of Herat and Kandahar, adding that the project would face significant security problems after a planned pullout of US-led Nato troops from Afghanistan in 2014. Berdymukhamedov, whose Central Asian nation of 5.5 million people is listed by human rights bodies among the most reclusive and repressive in the world, made no mention of the security challenges facing the long-touted TAPI. "This will help the economic growth of the TAPI participant states and, more importantly, will contribute to regional peace, stability and security," said Berdymukhamedov, who enjoys vast powers and a rising personality cult in his ex-Soviet country. Yagshygeldy Kakayev, head of the state agency for hydrocarbon resources - the body responsible for distributing licences - told the same government meeting that roadshows for potential investors would be held in Singapore, New York and London and would last for 18-20 days in September and October. The Asian Development Bank had said the TAPI pipeline was estimated to cost at least $7.6 billion back in 2008. Analysts and officials now say it could cost between $10 billion and $12 billion to construct. According to estimates by industry experts and government officials, Turkmen gas supplies to Pakistan could begin in 2016 and to India in 2018. Turkmenistan is promoting TAPI as a key element in plans to boost its annual gas exports to 180 bcm by 2030. Turkmenistan does not disclose data for its current gas exports. BP estimates show that last year the country produced 59.5 bcm of natural gas and consumed internally 25 bcm. BP data show Turkmenistan''s natural gas reserves are behind only Russia, Iran and Qatar. The country aims to supply gas from its Galkynysh field, better known by its previous name, South Iolotan. Auditor Gaffney, Cline & Associates has ranked the field the world''s second largest, with gas reserves of between 13.1 trillion and 21.2 trillion cubic metres.

Copyright Reuters, 2012

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Ministry drafting summary for LNG import from Qatar

The Ministry of Petroleum and Natural Resources is drafting a summary for the import of 500 Million Cubic Feet (MMCFD) per day of Liquefied Natural Gas (LNG) from Qatar during the coming winter. According to a senior Petroleum Ministry official "we are in the process of formulating the framework of LNG import so that in the coming winter Pakistan can meet its energy needs." The official added "we want to prepare a summary as early as possible so that it can be presented before the next meeting of the Economic Co-Ordination Committee." "The import of natural gas in the form of LNG is one of the basic priorities of the government to overcome looming energy crisis in the country. Government is working on short term, medium term and long term plans to resolve the crisis; LNG import is a short term solution. In the long run the government has to explore new oil and gas reservoirs in the country so as to increase the indigenous gas production," he maintained. The government of Qatar has authorised the US energy giant ConocoPhillips to negotiate LNG deal with Pakistan. He said that the government has imposed Gas Infrastructure Development Surcharge (GIDS) on different sectors to finance import of LNG as well as long term projects like Iran-Pakistan and Turkmenistan-Afghanistan-Pakistan-India gas pipeline projects while the industrial sector has asked the government to guarantee the import of LNG or any other fuel by the end of November. "We have committed to the industrial sector that we will ensure import of LNG by November so that industrial sector would be provided with required energy," the official stated. Last year on July 20 OGRA issued three conditional licenses and one provisional license to the LNG project proponents. The conditional licenses were issued to 'Pakistan Gasport Limited', Engro Corporation Limited, and Global Energy Infrastructure Limited while the provincial license has been issued to DSME ENR Limited. The Global Energy and Engro were to import 500 Million Cubic Feet per Day (MMCFD) each while Pakistan Gasport was to import 400 Mmcfd. However, there were no imports. According to sources in the Petroleum Ministry the GEIP requested the government to allow it to sell imported RLNG directly to SNGPL and SSGC, but Ogra stated that as per third party access rules GEIP is bound to arrange end consumer by itself. As per GEIP it was also responsible to provide the details of RLNG buyers as mentioned in clause (C) of the capacity allocation letter, which states provisional list of buyers along with quantity be furnished within 15 days.

Copyright Business Recorder, 2012

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Oil and gas sector: Pakistan to provide all possible help to Iraq, says Asim

Dr Asim Hussain, Advisor to the Prime Minister on Petroleum & Natural Resources, has expressed confidence that Pakistan would provide all possible help to Iraq in Oil & Gas sector. He stated this during a meeting with Dr Rushdi Al-Ani, Ambassador of Iraq to Pakistan, here on Thursday, which was also attended by senior officials of Pakistan Petroleum Limited (PPL). Hussain thanked the Iraqi Ambassador for facilitating PPL to participate in the bidding of exploration blocks in Iraq that were subsequently awarded to PPL after successful bidding. He further said that the co-operation between the two countries would further strengthen the brotherly relations. Dr Rushdi Al-Ani apprised that PPL would be provided necessary facilitation including security to operate inside Iraq and invited Dr Asim Hussain to Iraq for signing of MoU in Baghdad. It may be noted that PPL has submitted and subsequently won exploration rights for two blocks (6,000 sq km) thought to contain gas in Iraqi provinces of Diyala and Wasit in May 2012.-PR

Copyright Business Recorder, 2012

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Pak-Iran bilateral co-operation in oil, gas sectors discussed

A meeting of Pakistan - Iran Joint Committee on Oil, Gas and Energy was held on July 17 & 18, at Islamabad to discuss bilateral co-operation in oil and gas sectors. The Iranian team was headed by Dr Ahmad Khalidi, Deputy Minister for Internal Affairs to Minister for Petroleum, and Pakistani team was headed by Abid Saeed, Additional Secretary, Ministry of Petroleum and Natural Resources. The two sides discussed issues of mutual interest particularly the energy sector. The Iranian side expressed its intention to invest in the E & P sector including investment in the upstream and midstream. The Iranian side also invited Pakistani companies to invest in E & P sector in Iran. Furthermore, the two sides decided to form a Joint Working Group covering experts from Technical, Legal, Financial and Commercial sectors to work out the details with respect to the implementation of the Iran-Pakistan Gas Pipeline project.-PR

Copyright Business Recorder, 2012

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Iran-Pakistan Gas pipeline: Italy, Russia and China show interest in project

Three major countries Italy, Russia and China have shown interest in financing the construction of Iran-Pakistan (IP) Gas pipeline project, a senior Petroleum Ministry official said. The official said that currently an Iranian delegation is visiting Pakistan to set the modalities of financing the gas pipeline project for energy striven Pakistan. 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). The official said that to resolve energy crisis on short-term basis the government is seriously considering initiating import of 3.5 million ton of Liquefied Natural Gas (LNG) from Qatar without providing any sovereign guarantee. When he was asked about the price of the LNG, he said that it would be around 85 percent of the brent crude oil. It is estimated that Pakistan would pay a maximum $11/MMBtu for imported gas from Iran and $13/MMBtu from Turkmenistan and $18/MMBTU for LNG. The government on March 29 invited bids for the construction of 785 kilometres of IP pipeline from pre-qualified parties with three firms qualifying. National Engineering Services Pakistan (NESPAK) and ILF Germany have completed the detailed route survey activity, while the government has already invited tenders for construction of IP pipeline. As far as financing of IP project is concerned, Iran has agreed to provide $ 500 million funding for the construction of the gas pipeline, while the government of Pakistan is also generating local funds by imposing Gas Infrastructure Development CESS (GIDC) on different sectors of economy. Last year under GIDC the government collected nearly 40 billion, which would be utilised for 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. Country''s current gas demand is met entirely through domestic production which currently stands at 4,200 Billion Cubic Feet (BCF) per day. The level has been stagnant for the last few years as new gas field discoveries have been scarce after the passage of 18th amendment which has given provinces a greater role in policies. To meet the shortfall the government is focused on import options including Iran-Pakistan (IP), Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline projects and import of LNG. During the last decade, demand for natural gas in the country has increased by almost 10 percent annually, reaching around 3,200 Mmcfd in 2008, against total production of 3,774 Mmcfd. But, in 2009, demand for natural gas exceeded the available supply, with production of 4,528 Mmcfd against demand for 4,731 Mmcfd, indicating a shortfall of 203 mmcfd, which at present has crossed to 2,300 BCF.

Copyright Business Recorder, 2012

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Heavy gas deposit discovered in Sui

Long-delayed 2-dimension survey to explore new natural gas reservoirs in Sui area of Dera Bugti district has been completed, confirming heavy gas deposits in the area. Balochistan Planning and Development department sources told APP here Monday that the survey could not be conducted for the last 15 years due to poor law and order situation in the area despite its imminence to explore new gas deposits in view of depleting gas resources in Sui gas field. Such surveys in Kharan desert and Barkhan had also been completed and exploitation of newly discovered natural resources in these areas would soon be launched.

Copyright Associated Press of Pakistan, 2012

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Ukraine seeks to invest in energy project: envoy

Ukrainian Ambassador Volodymyr Lokomov on Monday met senior Commerce Minister Makhdoom Amin Fahim and discussed various dimensions of trade between Ukraine and Pakistan. The ambassador formally invited senior Commerce Minister to visit Ukraine along with business delegation on 24-25th July 2012 to explore new trade avenues. A draft agreement on the establishment of Inter Governmental Commission (IGC) on trade and economic co-operation is going to be signed by both sides during Minister's visit to Ukraine. This agreement envisages holding meeting of representatives of two countries at least once biennially and arranging special meeting of working group of experts at a time when require by both parties. The ambassador also informed that Ukraine investors are ready to invest in Pakistan especially in the field of energy like wind and solar based power generation. Senior Commerce Minister accepted the invitation and highlighted on the need of broadening trade relations between the two countries. He informed that Pakistan has been consistently facing an adverse balance of trade with Ukraine and it is high time to find new ways and means to reduce the trade imbalance.-PR

Copyright Business Recorder, 2012

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OGDCL unveils five new discoveries in last 11 months

Oil and Gas Development Corporation Limited (OGDCL) has discovered five new discoveries during this last eleven months of this year under its vision to meet energy needs of the country. The corporation has discovered reserves of hydrocarbons from its appraisal well Nashpa-2 located in District Karak and was drilled down to a depth of 4340 meter to test oil and gas potential for 6 zones. According to OGDCL here on Sunday, significant reserves of hydrocarbons were found - the first targeted zone i.e. Datta Sandstone was tested and produced 3370 barrels per day of crude oil and 11 mmscfd of gas. The other discovery during the period was a hydrocarbon bearing horizon from its exploratory well Zin X-1 in District Dera Bugti. The structure of well was delineated, drilled and tested utilising indigenous expertise. This well was drilled down to depth of 2300 meter targeting to test the potentials of Pab Sandstone and Sui Main limestone formation. The corporation also found a gas discovery from its exploratory well Maru South-1 located in district Ghotki. The well was drilled to a depth of 720 meter. A successful drill stem test was carried out, which flowed at a rate of 4.32 MMCFD of gas at 32/64" choke size. The other new found was a gas discovery from its exploratory well Sulaiman-1 located in district Khairpur, Sindh. The well was drilled to a depth of 4575 meter and a successful drill stem test was carried out, which flowed at a rate of 20 MMCFD of gas at 32/64" choke size. It has also drilled exploratory well Zin SML-1 located in district Dera Bugti which was drilled to a depth of 1050 meter. The well is currently under testing. Meanwhile, when contacted, an official informed about operational highlights during this year and said further two discovery notices of Maru South-1 and Sulaiman-1 have been submitted to DGPC. He said 12 new wells including four exploratory and eight development wells spudded during this year, and added that 20 wells are expected to be spudded soon. The official said during the year, the company recorded a milestone achievement by bringing on stream phase-I of its Kunnar Pasakhi Deep project, from where production has commenced.

Copyright Associated Press of Pakistan, 2012

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Construction work on 69MW hydel project in Chitral inaugurated

The Khyber Pakhtunkhwa government has launched work on the 69-megawatt Lawi Hydel Project. Chief Minister Ameer Haider Khan Hoti inaugurated the construction work on the project in district Chtiral. Speaking on the occasion, the chief minister said that power outages posed a problem for the entire nation second only to terrorism and the Khyber-Pakhtunkhwa government had framed a comprehensive action plan to solve the problem once and for all. He said that 24 hydro power projects were being inaugurated by the provincial government across the province. Amir Haider Hoti said that the out of the 20 projects, nine of them in Chitral district that would usher in a new era of development and prosperity in the region. The chief minister said that the project would earn the district Rs20 million every year as electricity royalty, adding that it would multiply many times after the completion of other hydro-power projects. He said that the royalty rate had been doubled for districts where hydro-power projects are initiated. He also said that only local people would be employed in the hydro-power projects, adding that non-locals would be employed only if the required qualified persons were not available locally. MPA Zafar Ahmed Khan, ANP's leader Khadija Sardar, senior ministers Rahimdad Khan, Bashir Bilour and other provincial minister Haji Hidayatullah, Saleem Khan also attended the function.

Copyright Business Recorder, 2012

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