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News Headlines for the month of
SEPTEMBER 2012

Japanese technology-based gadget fuel consumption

A comprehensive presentation was given at a high level meeting in Islamabad recently regarding how to achieve much desired fuel saving in the public and private sectors in the country through use of an innovative Japanese technology based gadget in order to ensure that the fuel consumption is kept under as much check and control as possible and the oil import bill also remains within reasonable limits. The presentation regarding how to explore new ways and achieve fuel saving including innovative Japanese technology based gadget, Panther, giving an appreciable saving in fuel consumption up to as much as 25 percent without compromise on the mileage and exploring the new ways was made at the meeting specifically convened by the Federal Industries Ministry to discuss and evaluate the benefits of the fuel saving equipment. The presentation was made in this regard recently by Lahore-based importers and distributors concern, Future Technologies, Shoaib Ashfaq Qureshi, with emphasis on the fuel saving measures and the gadget being marketed by his concern exclusively with the claim that it helps in effecting saving of up to 25 percent in fuel consumption. Shoaib Ashfaq Qureshi while talking to a group of journalists in his Gulberg office here on Monday said that he had made quite elaborate and comprehensive presentation and the immediate response from the participants was very much encouraging and positive. He said he could only say this much after having made the presentation that the Industries Ministry stands supportive to all new possibilities to improve mileage of the vehicles and showed its interest to explore the new ways to achieve fuel saving and appreciated the efforts being made in this regard. Giving some details about the presentation he had made at the meeting , Shoaib said that starting from technology behind fuel saving gadget Panther, which has been certified by a number of international organisations and that how the equipment works after it is plugged in the cigarette lighter/power socket of a vehicle. He said that the gadget saves up to 25 percent fuel consumption, increase torque and horsepower up to 12 percent and engine response, is a green product, smoothens automatic gear transmission and reduces engine vibration. He made it clear that fuel saving ratio varies on the basis of vehicle model and its condition as well as the road and weather conditions. Regarding what needs to be done in Pakistan for effecting fuel saving, he said that many technological innovations require new thinking regarding how to measure and rate vehicle energy efficiencies and greenhouse gas (GHG) emissions, automobile fuel economy standards have proven to be one of the most effective tools in controlling oil demand and GHG emissions from the transportation sector in many regions and countries around the world. He said that this should give confidence to policy-makers that ambitious targets for fuel efficiency are not only desirable but in fact also achievable as well as most desirable. He said that it is imperative that the countries should make long term plans to take advantage of every technology available to reduce the consumption of fuel in transportation.

Copyright Business Recorder, 2012

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22-megawatts Jabban hydropower: project to generate electricity by March 2013, says chairman Wapda

The 22 MW-Jabban Hydropower Project, located in Malakand Division of Khyber Pakhtunkhwa province, will start electricity generation by March 2013. This was stated by the Pakistan Water and Power Development Authority (Wapda) Chairman Syed Raghib Abbas Shah during a meeting with a delegation of AFD - the French Development Agency - headed by the Country Director Nicolas Fornage here at Wapda House on Wednesday. Speaking on the occasion, the Wapda Chairman said that Wapda is committed to optimum utilisation of water and hydropower resources in the country by constructing large, medium and small-sized projects. In addition to utilising local funds, the support by the international financial institutions is also vital for completion of these projects, he added. The chairman, thanking the AFD for providing 25 million euros for Jabban Hydropower Project, expressed the hope that the mutual co-operation will further enhance for other Wapda projects as well. The matters relating to funding the multi purpose Munda Dam, Harop, Basho and other hydropower projects were also discussed in the meeting. The AFD Country Director appreciated the efforts made by Wapda in completing the Jabban Hydropower Project despite the law and order situation in the area. He assured that the mutual co-operation between AFD and Wapda will continue for the future projects in water and hydropower sectors. He said that the AFD in principle agree to launch appraisal mission for providing 10 million Euros for Munda Dam Project and another 2.5 million Euros for capacity building of Wapda. Wapda Member (Power) Muhammad Qasim Khan, Member (Finance) Syed Nazakat Ali Shah, Secretary Muhammad Imtiaz Tajwar and senior officers of Wapda also attend the meeting.

Copyright Business Recorder, 2012

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Two more nuclear plants to be installed at Chashma

The government is contemplating installing two new Nuclear Power Plants C-3 and C-4 at Chashma Nuclear Power Project at a total cost of Rs 3.103 billion, including Rs 1.62 billion foreign exchange component and Rs 1.49 billion local component. The objective of the projects is to better cope with electricity demand for industrial, agricultural, commercial as well as domestic consumers for the next 10 years. According to documents available with Business Recorder electricity demand is expected to grow by 7.74 % per annum during 2009-19. To cope with growth in demand, additional capacity would be required annually. The interest rate of 15% for local and 12% for foreign exchange component has been applied for IDC/amortisation purposes. The project''s useful economic life has been assumed at 40 years. The installed capacity of C-3 and C-4 nuclear power plants would be 680MW. The Plant C-3 is expected to be commissioned in December 2015 and C-4 in October 2016. For this purpose, National Transmission and Dispatch Company Ltd (NTDC) submitted PC-I of Interconnection of C3 & C-4 Nuclear Power Plants project to the Planning Commission for approval. These interconnection schemes have been proposed for the dispersal of 630MW power in a reliable manner from C-3 & C-4 Nuclear Power Plants to the National Grid under normal and N-1 contingency conditions. The scope of work of the schemes is dispersal of power from C-3, a 220 kV D/C transmission line , approx 2 KM long on twin bundled Rail conductor for looping in and out of one circuit of existing C-1 and C-2 - Ludewala 220 KV D/C at switchyard of C3/C4. Afterwards, for dispersal of power from C-4, a 220 KV D/C transmission line, approx. 125 Km long on twin bundled rail conductor from C3/C4 switchyard to Bannu is proposed. The existing installed capacity of the integrated system as of December 2011 is 21,036 MW. The installed capacity of hydroelectric power system is 6,516MW, thermal 4,829MW, IPPs 9,026MW and nuclear power system is 665MW.

Copyright Business Recorder, 2012

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Khyber Pakhtunkhwa, ADB sign pact to harness hydel potential

The Khyber-Pakhtunkhwa government has signed an agreement with the Asian Development Bank (ADB) for the development of hydroelectric power potential in the province at an estimated cost of Rs 6,026.41 million, provincial Minister for Finance Mohammad Humayun Khan said on Saturday. He was talking with reporters in Batkhela, the district headquarters of Malakand. He said that Daral Khawar hydel power project with a generation capacity of 36-megawatt would be completed in three years at an estimated cost of Rs 6,958.42 million. According to him, work on the project had already been inaugurated by Chief Minister Amir Haider Khan Hoti. He said that Sarhad Hydroelectric Development Organisation (Shydo) had prepared Action Plan 2011-25, which envisaged construction of eight hydel projects in the province with an installed capacity of 628MW, adding that these projects would help overcome the problem of energy shortage. Referring to the construction work on the Batkhela Express Feeder-II, which was inaugurated the other day, he said that after completion, the project would help mitigate power problems in Batkhela and adjoining areas. He said work on this feeder would be completed within a week. Minister Finance added it was a long-standing demand of the people of Batkhela for which he personally requested Pesco''s Peshawar Chief. Humauyn Khan also thanked the Pesco chief for taking personal interest in initiating work on the Express Feeder-II with Wapda Fund. He said that the already installed feeders would now cater to the needs of Batkhela while the new one will supply electricity to inhabitants of Oxford Colony and Sangeena in Batkhela and other villages, including Piran, Rangmala and Jalal Kot. Later, the finance minister visited the Chakdarra Darbar in Lower Dir and offered Fateha on the demise of father of the DCO Buner.

Copyright Business Recorder, 2012

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US sponsors study tour for energy sector officials

A team of senior planning and engineering officials from Pakistan’s power distribution companies (Discos) will visit several well-run power utilities in the United States from September 14-22. This US government-sponsored exchange programme will help strengthen the planning and engineering functions at Discos throughout the country. The US government is committed to helping the government of Pakistan improve its power distribution system, said Jock Conly, Director of the US Agency for International Development (USAID) Mission to Pakistan. Planners and engineers who experience well-run utilities in the United States firsthand, return to Pakistan with practical ideas to improve Discos operations, reduce losses and ultimately to make sure consumers have a more reliable supply of power. The team will visit power utilities in Cincinnati, Ohio and New Haven, Connecticut. This is the fifth study tour for Discos officials. This training would help rehabilitation of the Tarbela and Mangla Dams and Jamshoro, Muzaffargarh and Guddu power plants, as well as the construction of the new Satpara, Gomal Zam and Kuram Tangi Dams. These projects are expected to add 900 megawatts to the national power grid by 2013-equivalent to 20 percent of the country’s energy shortfall and enough energy to power two million households and businesses.

Published in Daily Times, 2012

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USAID to consider funding for Khwar hydropower projects, small dams

Besides providing financial support to WAPDA for its three ongoing projects in water and hydro-power sectors, the United States Agency for International Development (USAID) will also consider provision of funds for two of the Khwar hydro-power projects, as well as small and medium-sized dams. This was the crux of a meeting held Thursday between WAPDA Chairman Syed Raghib Abbas Shah and USAID Mission Director Jock Conly. USAID Deputy Mission Director Roger Garner was also present during the meeting. Speaking on the occasion, WAPDA Chairman said that the WAPDA projects are not only vital in view of the increasing demand of water and electricity in the country, but also instrumental in poverty alleviation from the far-flung areas of Pakistan. He said that the assistance from international financial institutions and donor agencies can play a pivotal role in completing these projects. He thanked USAID for financial support being provided for Gomal Zam Dam project and its recently included Waran Canal system, Satpara Dam and rehabilitation of the existing Tarbela Hydro-power Station. The matters relating to providing funds for under-construction Allai Khwar and Duber Khwar hydro-power projects, Kurram Tangi Dam and other small and medium-sized dams were also discussed in the meeting.

Copyright Business Recorder, 2012

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Import of power generators may increase owing to power crises

More and more generators' sale and repair shops are coming up in the city in the wake of increasing demand of generators owing to long hours load shedding and frequent power failure. Import of power generating machines may increase substantially owing to prevailing power crises in the country. Beside imports the ongoing power outages have also increased the sale of generators, which are dual fuel operated - with petrol and natural gas. The increase in demands has also pushed the prices of generators upwards owing to rupee's depreciation against the US dollar and the rise in freight charges due to hike in fuel charges. The shopkeepers said the demand of Chinese generators was more as compared to generators made in other countries including Japan because of price difference. The dealers, dealing in Japanese manufactured generators, are also selling Chinese-assembled generators. The prices of Chinese generators range from Rs 35,000 to 950,000 with different brands and power generating capacities, and of varying quality. Last year these generators cost Rs 30,000 to 70,000. Similarly, the rates of Chinese-assembled, Japanese brands have reached Rs 55,000 to 195,000, with different power generating capacities, which last year were in the range of Rs 45,000 to 145,000. Total import bill of generators for the July-May 2011-12 period rose to 951 million dollars as compared to 919 million dollars in the same period of last year. The import of power generating machines rose to 72 million dollars in May 2012 as compared to 50.58 million dollars in April 2012. The traders said that majority of imported generators were finding way in Punjab province which was already in the grip of very serious power crises. "Everyone, who can afford to spend 30,000 to 40,000 rupees, is purchasing a small generator that can operate on oil and natural gas, just to be able to sleep at night", the dealers said. They said the sale of generators in Karachi was increasing day by day owing to frequent power failure and loadshedding in residential areas.

Copyright Business Recorder, 2012

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Six power projects: Pakistan seeks Russian investment prior to Putin''s visit

Pakistan has sought Russian investment in six power sector projects worth $12.66 billion, prior to the scheduled visit of Russian President Vladimir Putin on October 2, 2012, official sources toldBusiness Recorder on Monday. Two of these projects are related to Water and Power Development Authority (Wapda) ie implementation of 2,800MW Hydel Power Project Thakot at an estimated cost of $5 billion and implementation of 2,800MW Hydel Power Project Pattan at an estimated cost of $6 billion, the sources added. Three units (1, 2 & 3) of Thermal Power Station (TPS) with a cumulative capacity of 630MW which are being converted to coal at an estimated cost of $300 million have also been offered to Russia. According to sources, Russia has also been requested to invest in a 500MW power project (on coal) at Jamshoro at an estimated cost of $700 million. Other power sector projects of National Transmission and Dispatch Company (NTDC) which have been offered to Russia for investment are as follows: (i) power dispersal from 747MW CCPP Guddu at an estimated cost of $91 million; (ii) power dispersal from 969MW NJHP with an estimated cost of $251 million; (iii) power dispersal from 650MW C3 & C4 (Chasma nuclear) with an estimated cost of $35 million; (iv) power dispersal from 1,200MW Thar coal power project at a cost of $245 million; and (v) 220 KV DI Khan grid station along with allied transmission line project with an estimated cost $44 million. According to sources, mining and power generation project at any one of the Thar coal blocks to be approved by Sindh Thar Coal and Energy Board (TC&EB) will be offered to Russia later on. Pakistan and Russia are expected to sign agreements on currency swap and opening of bank branches in the two countries during the visit of President Vladimir Putin. The list of agreements to be inked during the visit of the Russian President are as follows: (i) Muzaffargarh and Guddu thermal power plants; (ii) Thar Coal project; (iii) Kandra gas thermal power plant; (iv) Tarbela-IV extension project; (v) currency swap arrangements; (vi) opening of bank branches; (vii) assistance to the Heavy Mechanical Complex(HMC); (viii) assistance to the State Engineering Corporation (SEC); (ix) joint ventures in auto sector (manufacturing of spare parts); (x) partnership in water sector; (xi) co-operation in agriculture sector, and (xii) assistance to the National Centre for Rural Development (NCRD). Sources said that the Presidency had directed all ministries/divisions concerned to finalise agreements in consultation with the Ministry of Foreign Affairs.

Copyright Business Recorder, 2012

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Alternative energy: Harnessing Biogas

We are living in an era of energy shortage. At a time of increased prices, rising inflation, diminishing resources and intense global demand for energy, we need to have options and must continue to research ways to meet challenges. Renewable energy technology is definitely one option that the country must look into closely. Gone are the days of cheap labour and resources to maintain a healthy standard of living, at optimum energy costs, which is why we must look into the depth of the energy crisis and identify solutions. Biogas is a natural resource, abundantly found in forests, organic industrial waste along with human and animal waste. It can be recycled to produce efficient and usable energy. By converting animal waste into methane bio-gas, hundreds of cows can generate over hundred billion kilowatts of energy, enough to power millions of homes across the country. One cow alone can produce enough waste in one day to generate 3 kilowatt hours of electricity whereas only 2.4 kilowatt are needed to power a single 100 watt bulb for the day. Moreover, converting waste to biogas leads to a decrease of global warming gases by 4%. Major benefits have been attained by many developing nations. In China, over 30 million households have applied biogas alternative energy, leading to reduced air and water pollution, saving money, improving hygiene conditions, producing high quality fertiliser, saving cooking time, saving time collecting firewood, using crop residue for animal fodder instead of fuel and improving rural standards of living. In Texas, cow manure is being used to power ethanol power plants, where plants are saving almost 1,000 barrels of imported oil by switching to methane bio-gas. UK has introduced this concept recently in 2010, as many countries look inwards towards generation of energy through the agricultural sector. Today biogas is running diesel engines, gas generators, kitchen ovens, geysers and other utilities in Pakistan. This process is feasible for small holders, with livestock producing 50kg waste per day, produced by three cows. According to the World Energy Council, Pakistan started a biogas scheme in 1974 and commissioned 4.137 biogas units by 1987. These were biogas plants (small scale) with a capacity varying from 5 to 158 cubic metres gas production per day. Unfortunately, lack of funding resulted in early termination of the projects. Till 2006, the government helped fund over 1,600 household biogas. By 2008, another 2,500 plants were installed after realisation of the importance of biogas came through following a study conducted in 2007. The outcome of the study further revealed that Pakistan has one of largest unexploited biogas resources in the region with an estimated potential of over 5 million biogas digesters in the country, with the most optimum climate and temperature conditions, specially in areas of northern Punjab. At the grass root levels, over 6,000 digesters were installed all over the country, leading to the popularity of this method as a long-term viable solution. The credit goes to the PCRET – Pakistan Center for Renewable Energy who led efforts to boost this alternative. In Pakistan, the initiative by the NGO called Initiative for Rural and Sustainable Development (IRSD) led to the installation of over 150 biogas plants with support from the UNDP small grants programme. Another NGO “Koshish” in Sialkot, Punjab has helped villagers set up 200 biogas plants successfully. There is definitely a need in our country to improve conditions to let biogas production flourish. The government needs to proactively assist by providing subsidies to build efficient biogas plants and by reworking the energy conservation bill, which is aimed at replacing old equipment and machinery to the rural farming communities with new technological gadgets. Banks and leasing companies should also venture into this market through microfinance schemes with an objective to create a more robust agricultural system, with abundant water resources and food for the cattle and livestock. We must build the resolve to think on the way forward to find more natural means of energy conservation and optimum energy production for our potential future to remain a prosperous one.

Published in The Express Tribune, 2012

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Installation of solar power system: small household needs Rs 50,000 for 24-hour electricity, says Jamali

Minister for Science and Technology, Changez Khan Jamali has revealed that the households, who use only two bulbs and one fan, can enjoy electricity for 24 hours by installing solar system worth Rs 50,000. Official sources told Business Recorder, in a recent meeting of Federal Cabinet, the Minister for Science and Technology apprised the Cabinet of conversation to the solar energy by taking following steps; (i) Rs 50,000 would be needed for a small household, which could utilise two lights and one fan;(ii) Rs 100,000 would be required if they also want to use a TV or another electric appliance;(ii) Rs 2, 500,000 would be needed for tube well with 300 feet depth and ;(iii) Rs 4,000,000 to be needed for tube well with 600 feet depth. He also informed the Cabinet about the outcome of Ministry of Science and Technology regarding feasibility of the water based fuel, reportedly developed by a scientist from Sukkur, who according to renowned scientist Pervez Hoodbhoy, is lying with the nation. The water based fuel is said to be capable of running 1000 cc vehicles. The Minister for Science and Technology requested the Prime Minister for grant of Rs 10 million to initiate a pilot with direction to give demonstration within one month. In response, the Prime Minister stated that this water-based fuel is not being owned nationally as well as internationally. He, therefore, suggested that it should be tested and authenticated by scientists of Ministry of Science and Technology in the first place, before start of any pilot project.

Copyright Business Recorder, 2012

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MoU for 50MW wind power with foreign firm

The Sindh government has signed a memorandum of understanding with a Czech Republic company, WIKOV Wind, for the generation of 50 megawatts of electricity at the so-called wind corridor in Gharo-Jhimpir in Thatta district. The MoU was signed by Sindh Board of Investment director general Mohammed Riazuddin and Czech Republic company head Martin Wichterle in the presence of Sindh Chief Minister Syed Qaim Ali Shah, Finance Minister Syed Murad Ali Shah and Information Minister Sharjeel Inam Memon and others on Wednesday. A high-level investment delegation from the Czech Republic also witnessed the ceremony. Addressing the ceremony, the Sindh chief minister said that with the grace of the Almighty the province was blessed with natural resources like wind and coal which could not only fulfil the energy requirements of Sindh, but also the whole country. “Sindh is first province to take lead in power generation through wind and it has the potential of generating 50 thousand megawatts of power through wind in coastal belt of the province,” he said. He said that previous governments did not add even a single megawatt to the national grid and it was the PPP government under former prime minister Benzair Bhutto which initiated the power generation projects in Badin. “However, unfortunately this important project was shelved by the Nawaz Sharif government. If that project had not been abandoned, the country would not have been facing the energy crisis these days,” he added. He said President Asif Ali Zardari took keen interest in the wind power generation and always supported initiatives of the provincial government for the betterment of the people. He said that investment-friendly polices of the Sindh government were attracting more and more foreign investment in the province. Later speaking to journalists, the chief minister said that a foreign company wanted to invest in power generation through coal in Badin district. Briefing about details of the MoU, the Sindh finance minister said that the Sindh government would execute the project, arrange funds while the Czech Republic company would provide the required material, machinery and technology. He said that financing for the 50MW power project would be arranged before December 31 this year while the construction would start in January 2013. Czech Republic delegation head Martin Wichterle said that it was a great opportunity for them to invest in the power generation through wind. “We will bring more business for local industry,” he said and added that the Czech Republic wanted to enhance business and investments opportunities in Pakistan and many other power generation projects were under consideration which would help in resolving the energy crises faced by Pakistan and the bilateral cooperation in the field of trade, business and investment would also get a boost. He said that the WIKOV Wind was a subsidiary of WIKOV holdings of the Czech Republic and specialised in all kind mechanical equipment. “WIKOV Wind is specialised in wind turbine technology development, wind turbine main component assembly, developer’s process, actual realisation of construction of wind turbines and wind turbine monitoring, service and maintenance.” He appreciated the efforts of the Sindh government for helping foreign investors in all sectors of the economy. Sindh chief security Raja Mohammed Abbas, additional chief secretary of finance Aijaz Ali Khan, additional secretary (planning and development) Malik Israr, secretary information Kazi Shahid Pervaiz, Czech Republic company representatives Jidrich Prokopee and others attended the ceremony.—PPI

Copyright Dawn News 2012

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Closer cooperation with China: Zardari seeks multi-sectoral partnership

Pakistan wants to promote closer collaboration with China in agriculture‚ irrigation‚ energy‚ infrastructure development‚ railways‚ and security sectors, President Asif Ali Zardari said here on Wednesday. During his meeting with Chinese Foreign Minister Yang Jiechi in New York on the sidelines of UN annual session, the President said that in view of prevailing energy crisis‚ Chinese assistance in the energy sector‚ especially‚ would be critical in helping the country overcome its energy shortages. Reiterating Pakistan’s commitment to bolster its "historical and time-tested all-weather friendship" with China to new heights, President Zardari said that Pakistan would continue working hand-in-hand with China for regional peace and stability and the mutual benefit of the people of the two countries. The President said that Pakistan-China bonds transcended the government level and permeated to the level of the people of the two countries. "What truly sets our friendship apart from other bilateral relationships is the depth of feelings that exists between our two peoples‚" President Zardari said. Expressing satisfaction over the existing multi-faceted relationship‚ President Zardari said that it was highly encouraging to see the traditional friendship transforming into economic ties for the mutual benefit of the people. He said that Pakistan greatly valued China’s economic support and assistance. "Indeed‚ our Chinese brethren have always been there to help us whenever we needed any assistance from their side‚" the President remarked. "Our ultimate goal is closer economic integration with China." Pakistan, President Zardari said, wanted to promote closer collaboration with China in agriculture‚ irrigation‚ energy‚ infrastructure development‚ railways‚ and security sectors. He said that the upward trajectory followed by bilateral trade was encouraging, but "we need to further strengthen our economic and trade ties to fully exploit the existing potential". The President expressed the hope that the recently-signed currency swap deal would help boost trade and economic co-operation between the two countries. Highlighting incentives being offered to Chinese businessmen and investors, the President also mentioned recent legislation on Special Economic Zones which is intended to help business community in reducing the cost of doing business and enhancing their rate of return. Discussing the regional situation‚ the President said that China, being an important player and a source of regional stability, “has a great role in promoting peace‚ stability and socio-economic development of the region". He said that militancy and terrorism were among greatest challenges being faced by the region and needed to be confronted jointly with concerted efforts. Appreciating Chinese support in the fight against militancy‚ the President reiterated Pakistan’s commitment to fighting terrorism in all its forms and manifestations. Among those, who attended the meeting, were: Chairman of the Standing Committee on Foreign Affairs Asfandyar Wali Khan‚ Foreign Minister Hina Rabbani Khar‚ Minister for Overseas Pakistanis Dr Farooq Sattar‚ Secretary General M Salman Faruqui‚ Foregin Secretary Jalil Abbas Jilani and Pakistan''s Ambassador Masood Khan. The Chinese side included, among others, Ambassador Li Baodong‚ Director-General Department of Asia Affairs (Ministry of Foreign Affairs) Luo Zhaohui‚ Director-General of the Department of Policy Planning Cai Run and Director-General of the Department of International Organisations and Conferences Chen Xu.

Copyright News Network International, 2012

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TAPI gas pipeline project: Singapore, New York, London road shows ''well received'': ministry

Turkmenistan, Afghanistan, Pakistan and India (TAPI) gas projects, in co-ordination with Asian Development Bank (ADB), organised three road shows between September 11-20 in Singapore, New York and London to gauge the market response to the gas pipeline project. The project’s working paper, obtained by Business Recorder, showed that last year, based on ADB's request to act as Transaction Advisor (TA) of the project, the governments of four member countries consented the ADB to work as TA for the project on agreed TORs. The ADB had planned these road-shows in major financial hubs to gauge market response. The first and second road shows were held in Singapore on September 11 and in New York on September 13-14, while the third one was held in London that started on September 17 and concluded on September 20. The road shows were attended by representatives from ADB, Turkmenistan, Afghanistan, Pakistan and India. Pakistan delegation is represented by Mobin Saulat, the Managing Director of Inter State Gas System (ISGS), and a team comprising technical, commercial and legal experts from ISGS. The Ministry of Petroleum claimed that the Singapore road show was very well received by the market and renowned companies and financial institutions such as Petronas, Temasek and State Bank of India attended the road show. Invitees were given comprehensive presentation by ADB and TAPI members on overall structure of the project, supply source, the market demand in Afghanistan, Pakistan and India. Invitees were also updated on the current status and way forward. The New York road shows were attended by world leading IOCs such as Chevron and Exxon Mobile and leading financial institutions Citi Group and US Exim. All participants expressed a keen interest in the project. In the London Road Show, TAPI Parties met with representatives of British Petroleum, Shell, British Gas and Morgan Stanley. Invitees for upcoming shows are Mubadala Group, Macquarie, RWE and Deutsche Bank. Prior to road shows, Ministry of Petroleum registered its concern to its government. It says: "ADB''s recent stance that it shall assume role of TA after the Road-Shows as the exact TORs vis-à-vis investors'' expectations as regard to Rate of Return or potential role/participation in upstream (Gas supply source) etc shall be clear after the Road-Shows is a concern for Parties, particularly Pakistan and India being deviation from earlier agreement. Our concern, also shared by Indian side, is that ADB should upfront commence work on transaction advisory as have already agreed by TAPI parties without any delay. ADB should issue the Transaction Advisory Mandate Letters before the Road-Shows to all four countries for approval by their respect governments to commence work of TA". Pakistan, Afghanistan and Indian during trilateral session 16th - 17th April 2012, Islamabad, three countries agreed on the transit fee rate. The three parties held meeting on 2nd - 3rd August 2012 and agreed that Parties shall resolve minor matters such as transit fee indexation mechanism and finalise the agreement before 25th August 201. On indexation mechanism, India proposed a US dollar based indexation as the transit fee rate has been agreed in US dollars whereas Afghanistan side proposed combination of Pakistan and Indian CPIs, however, are likely to agree on Indian proposal. Pakistan side also consider Indian proposal as pragmatic TAPI Parties have already agreed under the Gas Pipeline Framework Agreement (GPF''A) signed in December 2010 that for project financing and Construction, a consortium of technically sound and financially capable companies shall be jointly formed. Further, TAPI Parties shall appoint a Transaction Advisor (TA) to bring in the Lead Consortiuml Lead Financier and broadly for the marketing of the project and updating the prefeasibility of TAPI Project. The Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline Project aims to export up to 33 billion cubic meters (bcm) of natural gas per year through a proposed approximately 1,800-kilometre-long (km) pipeline from Turkmenistan to Afghanistan, Pakistan and India. The estimated cost of the project is $7.6 billion based on pre-feasibility study done by PENSPEN. Pakistan-Turkmenistan and India Turkmenistan bilateral GSPAs were inked on May 23 this year. Turkmenistan-Afghanistan bilateral GSPA is in process of finalisation. Earlier, Pakistan and Indian side recorded their concern that they will have to seek advice from their respective authorities on the participation in upcoming Road-Shows if the Turkmen-Afghan GSPA is not finalised till the start of the road-shows and Afghanistan acts a transit only country in the project. In view of the project''s size and complexities, the Parties agreed that it is necessary to attract and select a consortium lead which can (i) attract financing, (ii) manage construction, and (iii) reliably operate the pipeline. This need is enshrined in the GPFA which was signed in December 2010 by Heads of State in Ashgabat, Turkmenistan.

Copyright Business Recorder, 2012

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India makes generous offer: 500 megawatts power, pipeline for POL transportation

India has offered Pakistan 500 megawatts (MW) electricity as well as laying of pipeline for the transportation of refined petroleum products to Pakistan, a senior Commerce Ministry official said. Both the countries also held discussion on resumption of air link between New Delhi and Islamabad, revision of agreement on avoidance of double taxation and starting of railways service on Lahore-Amritser and Lahore-Ludhiana tracks. "Indian government has offered Pakistan 500 Megawatts (MW) of electricity as well as laying of a pipeline for the transportation of refined petroleum products to Pakistan and we are keen to import petroleum products and electricity from India," a high official who attended the meeting told Business Recorder here on Thursday. The official informed about the quantity of petroleum products, Pakistan wanted to purchase from India said that it will totally depend upon the requirement of Pakistan and the Indian government is ready to fulfil Pakistani oil needs. When he was asked about the quality of Indian refined petroleum products which is on Euro-II standard against Pakistan''s Euro-IV standard, he said that the Indian government will provide Pakistan refined petroleum products as per Pakistani standards so it was not an issue. Pakistan consumes 6.9 million tons of diesel every year, of which domestic oil refineries produce 3.2 to 3.4 million tons and the rest is imported. Furnace oil demand stands at about 9 million tons, of which domestic refineries produce about 2.5 million tons and the remaining is imported. The country is working on some new power plants, which will increase demand of furnace oil in years to come. Both the sides also discussed import of 200 million cubic feet of Liquefied Natural Gas (LNG) per day from Delhi, for which it would be able to swiftly start deliveries. Pakistan Commerce Secretary Muneer Qureshi led the Pakistani delegation while Indian delegation was headed by his counterpart S R Rao. The high-level 19-member Indian delegation led by the Indian commerce secretary had arrived in Islamabad on Wednesday for two-day talks, which are expected to conclude today (Friday). During the talks both the countries agreed upon promotion of regional co-operation by opening of the air services and land routes among the two neighbours. Both the countries on the second day of bilateral talks discussed following issues: (I) Review of decisions took at the sixth round of talks held November 14-16, 2011 (II). New areas of co-operation among the two countries, which includes (a) removal of investment restrictions (b) liberalising air services (c) start of courier services and (d) co-operation in telecommunication services. (III) Promotion of Small and Medium Enterprises (SMEs) (IV) Trade via Wagha-Attari border (V) Removal of Non-Tariff Barriers (NTBs) and (VI) Phasing out of negative list. Pakistan and India are expected to formally sign three crucial agreements at the end of the talks to boost economic activity between the two countries as they move ahead with the trade liberalisation process adopted a few months ago. Both the sides also discussed up-gradation or revision on the convention on avoidance of double taxation singed between Pakistan and India. Both countries had already vetted the draft agreements from their respective cabinets for signing. Pakistan had already opened the doors for trade with India by raising the number of items that can be imported from that country from 1,946 to almost 5,600 since March 1, 2012. To reciprocate this major shift in Pakistan''s policy towards India, the Indian government had last month lifted ban from foreign investment from Pakistan to create goodwill for further deepening the liberalisation process between the two countries.

Copyright Business Recorder, 2012

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Government to go for fast-track projects: 200 mmcfd LNG to be imported on tolling basis

The government has decided to go for fast-track projects to import 200 mmcfd Liquefied Natural Gas (LNG) on tolling basis, it was learnt. Sources told Business Recorder that it was decided by the committee constituted by the Prime Minister for development of LNG infrastructure that fast-track projects would be done on tolling basis wherein subsidiary of SNGPL/SSGC would procure LNG from international market either on term supply contract or on spot basis. Dr Asim Hussain, Advisor to the Prime Minister on Petroleum and Natural Resources was quoted as saying that short-term means the project(s) involving utilisation of existing terminals to receive RLNG which can bring in around 200 mmcfd RLNG in six to eight months and would cover a minimum supply period of about two years. The advisor reportedly stated that vessels having onboard re-gasification facilities would be used for shipment of LNG and the terminal would be used for RLNG receiving from the vessels against a tolling fee. The funding of the projects would be done by using the Gas Infrastructure Development Cess (GIDC) as the advisor was quoted as saying that section 4(1) of the GIDC Act, 2011 allows utilisation of cess for LNG projects contingent to the approval of competent forum. Therefore, he said the federal government can inject money in subsidiary of SNGPL and SSGC as its direct equity. As the meeting was informed that the technical feasibility of the terminal acquired by the subsidiary of the SNGPL/SSGC has not yet been done, the advisor was of the view that the project should be initiated on competitive basis where other terminals may be given a chance to compete. The meeting also discussed about long-term LNG project, which the advisor stated could take 18-24 months to complete with one-year ramp up period. The tenure of the long-term LNG project would be 10 to 15 years extendable with mutual consent. The subsidiary of SNGPL and SSGC will invite private companies, including existing capacity holders, terminal construction license holders to bid for supply of RLNG or construction of terminal. The subsidiary of SNGPL and SSGC would also be eligible to construct new LNG terminals. The meeting also noted that LNG procurement from international market could be through negotiations which are not allowed under PPRA Rules and to keep things simple and transparent, it was agreed to process the long-term LNG projects on integrated basis.

Copyright Business Recorder, 2012

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ENI announces major gas discovery in Sindh

Italian energy group ENI on Wednesday announced that it had made a significant gas discovery onshore Pakistan, located in the Kirthar Fold Belt region, 350 kilometres north of Karachi. The size of the discovery is currently estimated at between 300 to 400 billion cubic feet of gas in place and its delineation will require further appraisal wells. "The drilling of Badhra North B-1 is part of ENI''s new strategy in Pakistan which aims to refocus exploration activities in the neighbouring areas to productive fields and confirms the presence of significant exploration potential that can be exploited through the application of new geological models," the Italian group said. ENI said it has started discussion with the Pakistani regulator in order to speed up the production of the discovery through a long-term production test that will allow for the commercialisation of gas, and help to reduce the national gas deficit. ENI has been present in Pakistan since 2000 and is the largest producer in the country, with an average equity production at approximately 54,800 barrels of oil equivalent per day in 2011. "Based on news reports ENI has announced successful test results from two formations tested in Badhra B North - 1 exploratory well in the Badhra B Exploration Concession (part of Badhra Field) where OGDC has a 20 percent stake in the asset", Naveed Vakil, Director Research and Business Development at AKD Securities said. He said the well has flowed from two pay zone formations yielding 25mmcfd and 35mmcfd to total 60mmcfd. "Based on flow rate and adjusting for OGDC''s working interest we estimate an annualised EPS impact of Re 0.20/share (assuming application of Badhra pricing)", he added. "However based on our discussions with joint venture partners, gas processing will take place at Bhit Gas Processing Facility which has spare capacity of only 13mmcfd", he said. If approved by Director General Petroleum Concession (DGPC) for processing at Bhit, lead time for pipeline installation should be 2-3 months with initial production flow of 13mmcfd bringing down estimated annualised EPS impact to Re 0.05/share. Future potential production can be realised to offset gradual depletion of Bhit or if appraisal activity proves successful a development plan may be initiated for the area, he added.

Copyright Business Recorder, 2012

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Significant O&G discoveries

Islamabad—Dr. Asim Hussain, Minister for Petroleum & Natural Resources has expressed confidence that the new Petroleum (Exploration & Production) Policy 2012 provides significant incentives for Exploration and Production (E&P) Companies operating in Pakistan’s Oil and Gas sector. He further said that E&P companies should take advantage from the incentives offered in the new Policy. To reduce the prevailing demand and supply gap, the E&P companies have been successful in discovering new hydrocarbon reserves. Encouraged with the steps taken by the Ministry of Petroleum & Natural Resources to enhance indigenous production, E&P companies have made following discoveries during 2012. United Energy Pakistan Ltd has made discoveries in their Badin Blocks that include Gharo-1 Oil and Gas discovery in July, 2012 which is producing 520 Barrels of Oil per day (BOPD) and 0.03 Million Cubic Feet per Day (MMCFD) gas, Mohano-1 discovery in February, 2012 which is producing 300 BOPD and 0.03 MMCFD gas, Pir Apan-1 discovery made in March, 2012 producing 375 BOPD and 18 MMCFD gas, Piraro Deep-1 discovery made in April, 2012 which is producing 483 BOPD and 15.2 MMCFD gas, Nurpur Deep-1 gas discovery in May, 2012 producing 4.5 MMCFD gas, Mulaki-1 Oil and Gas discovery in July, 2012 which is producing 25 BOPD and 7 MMCFD gas, Shekhano-1 discovery made in August, 2012 that is producing 84 BOPD and around 17 MMCFD gas.

Copyright Pakistan Observer, 2012

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The Pakistan Petroleum Exploration and Production Companies Association (Ppepca) has welcomed the Petroleum Policy-2012, saying that internationally competitive rates would help promote this sector.

The new policy is offers almost double the production price of natural gas for new discoveries than the current rate of about $3.24 per mmbtu. The association said that the new policy was an important response of the ministry to the changed business environment in the upstream oil and gas sector. “During the last decade the number and size of new gas discoveries has gone down significantly, whereas cost for exploration, appraisal and development of new hydrocarbon resources has gone up,” the Ppeca said, adding, “in this environment, the oil and gas industry suffered in addition to other factors from the low gas price. The upstream sector feels that as a result of Petroleum Policy-2001 where hydrocarbon prices were curtailed at very low level, new foreign investment has not come into E&P sector, as the policy was based on oil prices of 2001 which were quite low. After the 2001 policy, the ministry introduced the 2007 policy and the 2009 policy with improved gas prices. However, those were not providing sufficient incentive for the large risk investments needed to explore and develop hydrocarbon resources. Those policies were, however, never fully implemented. The PPEPCA is a group of 24 local and international oil and gas upstream companies operating in Pakistan, and the Association of Upstream Companies feels that the new policy provides a better investment climate with higher gas prices linked to the high international oil prices in the world market. For its implementation, the policy needs to be backed by a clear set of rules, positive intent for implementation without any delays and bureaucratic wrangling, and a single window operation. The upstream companies said that the capacity building of various regulatory authorities relating to oil and gas sector is also required to make the Petroleum Policy 2012 a success. Despite severe gas shortages, negligible E&P activities have been witnessed in the country in the recent past mainly due to low incentives and law and order situation in many parts. However, an official of the petroleum ministry felt that attractive incentive would encourage upstream companies to initiate operations in Pakistan. He said that better gas price had been given under which a production price of $6 per mmbtu for Zone-III (West Balochistan, Pishin and Potowar), $6.3 per mmbtu for Zone-II (Kirthar, East Balochistan, Punjab and Suleman Basin) and $6.6 per mmbtu for Zone-I (Lower Indus Basin) has been offered. Similarly, an attractive price of $7 per mmbtu has been offered for offshore shallow, $8 per mmbtu for Offshore Deep and $9 per mmbtu for Zone Offshore Ultra Deep. This is compared to existing policy offered $3.13 mmbtu for Zone-III, $3.37 per mmbtu for Zone-II, $3.6 per mmbtu for Zone-I and $3.836 per mmbtu for deep and ultra-deep offshore exploration. Besides on the first three discoveries, the E&P companies would be offered one dollar per mmbtu higher price to encourage them to speed up their development plan.

Copyright Dawn, 2012

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'Iran ready to provide electricity, gas to Pakistan'

Leader of a 27-member delegation of Iran and President Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA), Yahya Al Eshagh has said that Iran is ready to provide electricity, gas and oil to Pakistan. Speaking at a meeting of Karachi Chamber of Commerce and Industry (KCCI) on Tuesday, he expressed his confidence that this visit would strengthen close ties between the two countries and help increase trade volumes in all areas. Referring to gas pipeline project, he said that the pipeline laying work is in progress and expected to be completed in next 8 to 10 months up to Pakistan border. He said Iranian companies are also showing interest in laying pipeline in Pakistan. He said that the delegation comprises people from banking, energy, textile, food, oil and gas sectors and they all were interested in conducting business in Pakistan. He pointed out that non-existence of a banking channel between the two countries is one of the biggest hurdles in increasing two way trade and investment. Yahya Al Eshagh said that Iran also ready to cooperate with Pakistan in power sector and establish power houses in joint venture with their counterparts. Referring to a suggestion of currency swap and barter trade, he welcomed the suggestion and said that Iran is ready for currency swap and barter trade with Pakistan. Iran is already doing currency swap with Turkey, he added. Yahya Al Eshagh said that Iran and Pakistan are two Muslim neighbour countries in Asia sharing the common culture and historical background. Looking back from the starting point and especially during last few years, Pakistan had become one of the important and reliable trading partners of Iran. However, the volume of trade is not satisfactory considering the huge potentials. He said that Pakistan Iran bilateral trade is around 1.2 billion dollars at present which can easily be enhanced to 3 billion dollars in the coming years. He said in spite of all odds Iran bilateral trade is around 200 billion dollars out of which 80 billion dollars come from export of oil. Iran doing good trade with Westerner countries, UAE, India etc, he maintained. President KCCI, Mian Abrar Ahmed said business transactions between the two countries routed through the Asian Clearing Union were more time-consuming than a normal letter of credit, while opening a LC through Iran's sister companies in Dubai also adds to total cost. Therefore, the establishment of bank branches in two countries is mandatory to enhance the trade, he added. Later KCCI and TCCIMA signed a Memorandum of Understanding (MOU) of co-operation.

Copyright Business Recorder, 2012

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Kaira invites Norwegians to invest in energy sector

Minister for Information and Broadcasting, Qamar Zaman Kaira has said that the government has taken many business friendly initiatives and offers best investment opportunities for the foreign as well as the local investors. The law and order situation is improving in the country day by day and the security forces of Pakistan, with the support of masses, have defeated the terrorists and extremists on many fronts, he made these observations while addressing inaugural ceremony of Norway Pakistan Chamber of Commerce in Oslo. "Our economy is growing at a fast pace and we need trade rather than aid for further stabilising our economy," he added. He said the stability of economy will help overcome many challenges facing the country, particularly war against terrorism, says a press release received here on Sunday from Oslo. While referring to the current energy crisis in Pakistan, he said that it is severely affecting the lives of masses and the government has taken many initiatives to overcome this issue. The Minister, referring to the extensive Norwegian potential and expertise in energy sector, particularly asked the Norwegian investors and the government to invest in this sector and assist government of Pakistan in solving the problems of masses. He further said that the establishment of Norway Pakistan Chamber of Commerce is a step in right direction and it would provide a platform for investment and for strengthening trade ties between Norway and Pakistan. Earlier, former Prime Minister of Norway, Kjell Magne Bondevik addressing on the occasion said that although Norway and Pakistan are far away geographically but they have many commonalties and they have decades old close ties. He said that there is vast scope of trade and business between Pakistan and Norway. He added that the Norway Pakistan Chamber of Commerce would help to find new avenues of trade between the two countries. During the ceremony, President of Norway Pakistan Chamber of Commerce, Aamir Shiekh briefed the audience about the objectives and goals of the Chamber.

Copyright Associated Press of Pakistan, 2012

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HMEL products to be marketed in Pakistan: agreement signed

HPCL-Mittal Energy Limited (HMEL), a joint venture between state run Hindustan Petroleum Corporation Limited and Mittal Energy Investment Pte Ltd, a Lakshmi N Mittal Group Company has signed an agreement of representation with Planet Petrochemicals (Pvt) Ltd whereby HMEL products will be marketed in Pakistan through Planet Petrochemicals. HMEL has built a 9 million ton grass roots world class Refinery at Bathinda, Punjab in India, which is just 180 kilometres from Wagah border. The plant has a capacity to produce all major Petroleum Products and one Petrochemical product. Speaking on the occasion Prabh Das, CEO HMEL reiterated that given the deficit of Petroleum products in Pakistan and the proximity of the refinery to the border, this presents a win situation for both the countries. He said that the group envisages Pakistan to be a strategic market. We have plans to increase the present capacity to 18 MMTPA as and when required. Khurram Sayeed, Chief Executive, Planet Petrochemicals said that this agreement was the result of a long standing perception of the group that regional trade is the key to a sustainable economy and that trade with India is in the interest of Pakistan. He said that there are many investment proposals under consideration and one of them is the Petroleum Pipeline from Bathinda to Wagah (AMAN Pipeline). He thanked Das and H.K.Rajora, who he said were instrumental in presenting Pakistan as a significant market for HMEL.-PR

Copyright Business Recorder, 2012

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OGDCL discovers a new hydrocarbon in Khyber Pakhtunkhwa province

Oil and Gas Development Company Limited (OGDCL) has discovered a new hydrocarbon bearing horizon from its appraisal well Nashpa-3, located in District Karak, KP province. The structure of well Nashpa-3 was delineated, evaluated, drilled and tested utilising indigenous expertise. It is a joint venture of OGDCL being operator with Pakistan Petroleum Limited and Government Holdings Private Limited (GHPL). Initially, well has produced 3015 barrel per day of crude oil and 14.35 MMCFD gas through 32/64" choke from Lumshiwal and Hangu formations and 150 barrels per day of crude oil and 0.6 MMCFD gas through 32/64" choke from Samanasuk formation. The total production from these formations is 3165 barrel per day crude oil and 14.95 MMCFD per day of gas respectively. After Drill Stem Testing (DSTs) in new horizons of Samanasuk, Lumshiwal and Hangu formations, significant reserves of hydrocarbons have been confirmed at well Nashpa-03. The actual flow potential of the well would be determined after completion followed by stimulation.-PR

Copyright Business Recorder, 2012

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IP gas to be available by December 2014: Asim

The National Assembly was informed on Monday that work on Iran-Pakistan gas pipeline project is expected to start by December this year, while gas flow would be available by the end of December 2014. Advisor to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain made these remarks in a written reply to the House, saying that currently the government was pursing two projects for the import of natural gas - Iran-Pakistan (IP) gas pipeline project and Turkmenistan-Afghanistan-Pakistan-India (TAPI) project. Updating the House on the IP gas pipeline project, he said gas was to be supplied from Iran''s South Pars gas field and delivered at the Pak-Iran border. He said the contractual gas volume was 750MMcfd and progress on the project was going on in accordance with the schedule. As per schedule, the advisor stated, the Engineering and Project Management (E&PM) had completed a bankable feasibility study, interim Front End Engineering Design (FEED) and a route reconnaissance survey. While work on the detailed route survey and FEED was scheduled to be completed in the current month, he added. He further said the pre-award activities (documentation) for the procurement of Long Lead Items (LLIs) such as line pipe and compressor had been started on the IP project and a response for EoIs for Engineering, Procurement and Construction (EPC) had been received from the interested parties and were being scrutinised. Responding to a supplementary question, Parliamentary Secretary for Petroleum and Natural Resources Shahnaz Sheikh told the House that financing and implementation of the IP project was however‚ becoming increasingly challenging due to geo-political situation. According to her, Pakistan is making all possible efforts towards completing the project on time. About TAPI, the advisor stated that the project aimed at brining 3.2 Bcfd natural gas from Yoloten-Osman and adjacent gas fields in Turkmenistan to Afghanistan (500 MMcfd), Pakistan (1,325 MMcfd) and India (1,325 MMcfd). He told the House that construction and commissioning of the project was targeted to be completed by 2017. He further said that Turkmenistan-Pakistan and Turkmenistan-India Bilateral Gas Sales and Purchase Agreements (GSPAs) had been signed on May 23, 2012 by heads of the respective commercial entities. On the same day, he added, Afghanistan and Turkmenistan signed a memorandum of understanding (MoU) on long-term co-operation in gas sector with a resolve to finalise the bilateral GSPA as soon as possible. Meanwhile, Minister for Science and Technology Changez Khan Jamali told the House that as many as 25,000 biogas plants would be installed in the country after successful demonstration of 4000 plants. He further said that there was also a proposal for large scale utilisation of solar photovoltaic and solar thermal energy system. He said Pakistan Council of Renewable Energy Technologies (PCRET) was in the upgradation process to produce Silicon Solar Cells and Modules up to 80 kilowatt annual capacity. Minister for Defence Syed Naveed Qamar told the House that PIA envisaged replacement of Boeing 737-300‚ Airbus A310-300 and Boeing 747-400 with fuel-efficient aircraft.

Copyright Business Recorder, 2012

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