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News Headlines for the month of
DECEMBER 2012

Pakistan would have first LNG terminal in two months

LAHORE: SNGPL Managing Director Arif Hameed on Monday said that Pakistan would have first LNG (Liquified Natural Gas) terminal within two months, while mega projects would take another six months to come on line. Speaking at Lahore Chamber of Commerce and Industry, he said the SNGPL (Sui Northern Gas Pipeline Limited) was endeavouring to bridge the gas availability and consumption gap to mitigate sufferings of consumers in Punjab, Khyber Pakhtunkhawa and other areas of its jurisdiction. The ongoing augmentation of the system would help plug the over and underground line losses, which according to him, have already been brought down significantly. Arif Hameed said the SNGPL was also working on the LPG plant and this environment-friendly gas would be marketed by the company soon. Efforts for exploration of tight gas in Punjab were underway and availability of this gas would help overcome energy crisis, he said, asserting, the SNGPL was also launching 'solar geyser' programme to help decrease the dependence of heating equipments on natural gas, as the geysers would be provided to consumers on subsidized prices. The prices of the equipment would be recovered from the consumers in two-year instalments, he maintained. He said that Inter-State Gas System Company was exclusively working for execution of Pak-Iran Gas Pipelines Project, and for this, tenders have been floated. While, the LCCI President Farooq Iftikhar expressed concerns over gas shortage, citing, since the start of winter season, the industry had been experiencing worst scenario under gas load-management. He underlined the need for exploring new gas reserves, as the existing ones were depleting. He urged the SNGPL to be very careful, while expanding its system considering the increasing gap of gas supply and demand, moreover, the priorities of SNGPL needed to be reset particularly giving industry its due share to continue their production. The LCCI President also called upon the SNGPL authorities to initiate a media campaign to educate public about gas conservation. Gas used in the steam units should be diverted to combined-cycle plants that operate at an efficiency of 48 percent as compared to almost 30 percent for the existing steam units. LCCI Vice President Mian Abuzar Shad, former Presidents Mian Anjum Nisar, Mian Muzaffar Ali and a number of other industrialists also spoke on the occasion.

Copyright APP (Associated Press of Pakistan), 2012

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Pakistani, US officials to discuss energy projects

ISLAMABAD: Even as President Asif Ali Zardari’s plane takes him to Teheran on Friday (today), where he will discuss the implementation of a financing plan for the Iran-Pakistan gas pipeline project, US officials in Islamabad will be goading their Pakistani counterparts towards pursuing energy import projects that do not involve the sanctioned Iranian regime. The Pakistan-US Energy Working Group has a lot on its plate. When it meets, senior officials from both countries will hold lengthy negotiations on cooperation in the energy sector: including the multibillion dollar Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, potential LNG import projects, and the oft-delayed Diamer Bhasha Dam. Power sector reforms will also be among the top issues taken up in the meeting. According to a copy of the agenda of the meeting, petroleum ministry officials will update the US on the energy supply and demand situation, the distribution of the fuel mix, the climate of investment for US energy companies interested in the country, and progress on the TAPI gas pipeline project. A petroleum ministry official told The Express Tribune that Pakistan will seek assistance for the TAPI gas pipeline project from the US government’s Overseas Private Investment Corporation (OPIC). Officials said the petroleum ministry will also brief the visiting delegation on prospects for LNG import projects in Pakistan, for which Pakistan seeks US engagement and investment. OPIC is reportedly interested in financing private LNG importers: it had signed a nonbinding agreement with Pakistan GasPort (PGP) in October 2011 for the financing of the latter’s LNG import project. According to sources, other private parties working on LNG imports have now been invited to the working group’s meeting. However, “For reasons best known to the Ministry of Water and Power, PGP has not been invited; even though its competitors – Global Energy Infrastructure and Engro – will be there.” “The petroleum ministry is framing a shale gas policy, and US input will be sought so as to attract US firms towards undertaking exploration in Pakistan,” officials from the ministry revealed. The US has recently discovered significant shale gas reserves on its soil, and the petroleum ministry wishes to learn a lesson or two from its experiences. Possible roles of the US and international financial institutions in the funding of the Diamer Bhasha Dam will also be considered. “The US has [already] proposed securitisation of dam assets to generate funds for the [Diamer] Bhasha Dam. An implementation model will be shared with US authorities [in the meeting],” officials added. Pakistani officials will also update the US team on reforms implemented in the power sector – a longstanding demand of donors. However, it is doubtful whether they will succeed to impress. Under past proposals, the government was urged to dissolve the Pakistan Electric Power Company, grant autonomy to power distribution companies and eliminate all subsidies extended to the power sector. For four years now, the Pakistani government has failed on all these counts. The regulatory environment and improvements required in the National Electric Power Regulatory Authority (Nepra) will also come under discussion. “Nepra currently approves a tariff for consumers on account of the fuel adjustment surcharge on a monthly basis and revises its base tariff every quarter. Donors want the base tariff to be adjusted on a monthly basis as well, so as to end electricity cost distortions and do away with the need to extend subsidies,” officials from the Ministry of Water and Power said. The circular debt –another thorny issue with donors – will also come under discussion. The US team will seek a briefing on the current volume of the debt, which has crossed Rs500 billion despite the issuance of term finance certificates worth Rs82 billion against reserves held by the Oil and Gas Development Company. It is widely believed that circular debt is a major hindrance in investment in the energy sector.

Published in The Express Tribune, December 7th, 2012.

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Durrani opens 132 KV grid station

Sindh Minister for Local Government Agha Siraj Durrani on Tuesday inaugurated newly constructed 132 KV Grid Station at Garhiyasin. The project was constructed by Sukkur Electric Power Company (SEPCO- WAPDA) at the estimated cost of Rs 340.00 million with the financial assistance of World Bank. The six acres land for the grid station was provided by Agha Siraj Durani free of cost.

Copyright Associated Press of Pakistan, 2012

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Japan shows interest in Mangla Refurbishment Project

Japan is reportedly said to be considering financing Mangla Refurbishment Project after announcement by the US ambassador that USAID will allocate $150 million to the project, sources close to chairman Wapda told Business Recorder. The sources said, Wapda carried out a feasibility study for ''refurbishment and upgradation of Mangla power station generating units'' with the objective improve the efficiency of existing old units, especially for optimal utilisation of additional water potential and storage as a result of Mangla Dam raising. The consultant, ie a Joint Venture of M/s MWH (USA) and Nespak (Pakistan) considered different alternatives and recommended the most viable and beneficial option which envisages on one hand the capacity enhancement of the power plant from 1000MW to 1310MW with the average annual incremental energy benefit of 1632GWh and replacement of old plant worthy of operating over the next 35 years. The sources said, the estimated cost of the project is $397.24 million while the total implementation period for the whole scheme is about 10 years. The preparation of detailed design, tender documents and strategy for contracting is in hand. USAID has allocated $150 million to support Mangla Refurbishment Project and it was formally announced by the US ambassador to Pakistan during his visit to Mangla Dam on 28th November, 2012. According to sources, this amount will be spent on the upgradation of units 5 & 6 and refurbishment and modernisation of balance of plant. The remaining amount of the project cost, ie $247.24 million will have to be arranged from other source. The sources maintained that Kato Ken, Advisor South Asia Division JICA along with Nishikata Takatoshi Chief Advisor JICA (Pakistan Office) met Chairman Wapda, Syed Raghib Abbas Shah on 8th December, 2012 and showed their interest to finance Mangla Refurbishment Project. "It is the appropriate time to proceed for availing the said opportunity which suits the best for project implementation," the sources continued. The sources said, Wapda has requested the Ministry of Water and Power to request Economic Affairs Division (EAD) to send a formal proposal to JICA for providing finances for the remaining project cost amounting to $247.0 million to carry out refurbishment /upgradation of the remaining units (1 to 4,7-8 &9, 10) along with other related works on the balance of plant. It is pertinent to mention here that Wapda is facing financial problems due to which a number of projects including Neelum Jhelum are behind the schedule. Wapda is also unsure about funds for Diamar Bhasha multipurpose project and Project Director, a close friend of Water and Power Minister with the status of Chairman Wapda is just overseeing developments. Both the incumbent Chairman Wapda and Project Director, a former Chairman Wapda, sources claim are not on the same page as both want authority.

Copyright Associated Press of Pakistan, 2012

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Thermal power plants: MoP begins supply of 22,000 tons of furnace oil daily

The Petro-leum Ministry has started supply of 22,000 tons furnace oil on a daily basis to thermal power plants, payment of which will be made by the Finance Ministry directly to Pakistan State Oil (PSO). Talking to Business Recorder, Prime Minister''s Advisor to Petroleum and Natural Resources, Dr Asim Hussain said that the issue of furnace oil supply vis-à-vis massive loadshedding in Punjab was discussed in detail at a high-level meeting presided over by the Prime Minister Wednesday night wherein it was decided that PSO should start supply of 22,000 tons furnace oil daily to Gencos. Presently, hydel generation has dropped to 12,000-1,300 MW due to annual canal closure whereas thermal generation is about 6,500 MW as thermal power plants are not being run at full capacity. The Ministry of Water and Power argues that it is current in payment to PSO but the latter is not supplying the required furnace oil to thermal power stations. Secretary Water and Power, Nargis Sethi took the issue at the meeting as textile sector is accusing Ministry of Water and Power of the current power crisis. An official of the Ministry of Water and Power told this scribe that the ministry is engaged in arranging liquidity to run the system as installed and generation capacities are available but the main issue is liquidity for generation. Cabinet Secretary Nargis Sethi, who has been given additional charge of Secretary Water and Power, is spending most of her time in the Ministry of Water and Power personally supervising the bill recovery process considered to be a major reason for the intractable inter-circular debt. "Discos'' average per month collection is about Rs 39 billion, ie, Rs 230 billion collection in six months. This implies that the government has to arrange liquidity of Rs 320 billion to run the system during the next six months," said an official on condition of anonymity.

Copyright Associated Press of Pakistan, 2012

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Setting up of 1,161 megawatts projects: Khyber Pakhtunkhwa government, Wapda sign two MoUs with South Korean firms

In yet another significant development for harnessing the indigenous water resources for electricity generation, two MoUs were signed on Monday among Khyber PakhtunKhwa (KP) government, Water and Power Development Authority (Wapda) and Korean firms to develop two hydropower projects in public private partnership (PPP) mode with cumulative power generation capacity of 1161megawatts. This milestone has been achieved as a result of the recent visit of the President of Pakistan Asif Ali Zardari to Korea. The first MoU was signed with Korea Midland Power Company (KOMIPO) for the 496 MW-Lower Spat Gah Hydropower Project, while the second with K-Water/Daewoo consortium for the 665 MW-Lower Palas Valley Hydropower Project. Wapda Chairman Raghib Shah, KP Shydo Managing Director Bahadur Shah, KOMIPO Chairman/Chief Executive Officer Choi Rak and K-Water representative in Pakistan No Hyuk Park signed the MoU on behalf of their organisations. Korean Ambassador to Pakistan Choong Joo Choi was also present on the occasion. Addressing the ceremony, the ambassador termed signing of the MoU to bring the two countries closer in the vital sector of hydropower. He appreciated Wapda Chairman's efforts for this achievement. Speaking on the occasion, Wapda Chairman said that the Korean firms, selected through international competitive biddings, will together bring in with them an investment of more than US $2 billion for construction of Lower Spat Gah and Lower Palas Valley hydropower projects. This investment shows the confidence, the international financial institutions have in Wapda for implementation of the projects in water and hydropower sectors, he added. Shah further said that the two projects will contribute more than 4.5 billion units of electricity to the National Grid annually. Wapda Chairman said that the two projects are a part of the strategy for optimum utilisation of the water resources to help overcome electricity shortage and stabilise power tariff for the consumers. Dilating upon the efforts for developing water resources, he added that Wapda is implementing more than 20 projects to generate about 20,000MW of electricity and store 12 million acre feet of water. It is pertinent to mention that Lower Spat Gah Hydropower Project is located on left bank tributary of River Indus with its confluence some 8 kilometers downstream of Dasu town in district Kohistan of Khyber Pakhatunkhwa province, while Lower Palas Valley Hydropower Project is also located on another left bank tributary of River Indus with its confluence some 12 kilometres upstream of Patan town in Kohistan district of Khyber Pakhatunkhwa province.

Copyright Associated Press of Pakistan, 2012

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Zardari inaugurates wind power project

President Asif Ali Zardari on Monday inaugurated the country''s first ever 50MW wind power project terming it an important milestone and landmark achievement in country''s efforts towards finding environmental-friendly, indigenous and low cost energy solutions. Addressing the gathering on the occasion of inauguration of wind power project, in Jhampir near Thatta, the President said that with the commencement of the first ever wind power project, Pakistan has entered the new era. The President termed the commencement as the first concrete step towards tapping country''s vast renewable energy resources. He congratulated the FFC Energy Limited, Ministry of Water and Power, Governor and the Chief Minister of Sindh, Alternate Energy Development Board, federal and provincial agencies and all others who were associated with the setting up of the wind power project. The President remarked that Thatta region was bestowed with immense potential of wind energy. The President said, once Thatta was a hub of civilisation, a seat of learning and a centre of art and craft. However, it also remained in oblivion for centuries adding that now Thatta will soon become the Wind Power Centre of Pakistan. The "Baab-ul-Islam", Sindh (Thatta) will Insha Allah soon regain its past glory and become power house of development of Pakistan, he said. The President said that commencement of commercial operation of FFC Wind Farm was the beginning of exploiting the wind potential of Gharo-Keti Bandar Wind Corridor. This is an area that has power generation potential of 50,000MW, he added. The President said that it was a matter of great satisfaction to learn that many more wind power projects were in pipeline and would commence commercial operations soon. The President said that Pakistan was an energy deficient country and continued population and economic growth has placed great demands on energy. He said reversal of previous energy policies, depleting oil and gas reserves and price hike has made the country vulnerable. "We cannot afford inaction as it was not an option," the President said. Complimenting the role of AEDB in the project, the President said that he looks forward AEDB''s contributions in other sectors of renewable energy as well. The President said, "We need to have similar successful projects in producing energy from waste, small hydro and sugar co-generation." He said that promotion of alternate modes of energy generation would not only reduce country''s dependence on costly fuel import but would also address many environmental issues caused by burning of the fuel. He also expressed satisfaction that Fauji Fertiliser would be adding 10MW solar project to this 50MW wind project. The President said that the launch of the First Wind Farm was an auspicious occasion which clearly demonstrated the commitment of the government to address the issue. He said that the government assumed office in the midst of energy crisis when the people of Pakistan were searching for alternatives. He said the country has tremendous resources of wind, solar and hydro power. Unfortunately, he said, these resources have not been fully exploited. The President said that converting potential into actual energy requires enabling environment, investment and state of the art technology is need of the hour. He said it requires bankable data, infrastructure, financing, creating incentives to investors and public support. The President expressed satisfaction that the government has proceeded in the right direction and with a strong will to succeed. On this occasion, the President also recounted various measures undertaken by the government in the energy sector which included addressing policy and technical issues, initiating supportive measures, developing infrastructure, offering lucrative incentives, collecting bankable data and creating enabling environment and investor confidence. He said the government also took measures seeking support of international financial institutions and attracting top manufacturers of the world through a co-operative approach. While, acknowledging the role of all partners in efforts to overcome energy shortage, the President said, the government provided a level-playing field to all investors, both local as well as foreigners. He said that the government provided them one window facility through AEDB. The President invited the local and foreign business community again to invest in energy sector, saying "we offer the best incentives in the entire region". He called upon the private entrepreneurs to take great advantage of the incentives being offered by the Government of Pakistan. Spokesperson to the President Senator Farhatullah Babar said that the President also advised Sindh government to set up an industrial zone in the area so that the business community could take advantage of uninterrupted and continued availability of power. He said that the government would continue to facilitate the business community through one-window facility as to help them take maximum advantage of available business opportunities. The President also stressed upon the need to make appropriate plans and to work keeping in view the future requirements of the country with an increased population and greater requirements.

Copyright Associated Press of Pakistan, 2012

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$50 million investment: IFC, ADB become equity holders in KESC

Karachi Electric Supply Company (KESC) has confirmed receiving the investment of $25 million each, from International Finance Corporation (IFC) and Asian Development Bank (ADB), which now makes these two Multilateral Agencies, equity holders in KESC. IFC (a member of the World Bank Group) and ADB have subscribed to additional share capital by converting $50 million of their original $275 million financing facility to the power utility. As per the loan financing agreement signed by IFC and ADB with KESC in 2010, the two international institutions had the right to convert up to $50 million of their debt into equity before December 31, 2012. This debt financing was provided by the two institutions to partly finance KESC''s state-of-the-art and one of the most efficient power plants, the 560mw BQPS-II. This 560mw plant has successfully been installed and commissioned mid of this year 2012, ahead of its planned schedule. This encouraging endorsement by IFC and ADB is being hailed by KESC as a positive sign paving way for international investor confidence not only in the utility but also in the country''s economy.-PR

Copyright Business Recorder, 2012

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Implementation Agreement for another 100 megawatts wind power projects inked

Foundation Wind Energy-I Limited and Foundation Wind Energy-II (Pvt) Limited entered into an Implementation Agreement (IA) with the Government of Pakistan for the establishment of two wind power projects of 50 MW each, in Gharo, Sindh, here on Tuesday. Formal Financial Close of the two wind power projects would be done, shortly. Foundation Wind Energy Limited- I and Foundation Wind Energy Limited- II are two independent subsidiaries of a prestigious national organisation, Fauji Foundation. The agreement was signed by Brigadier Dr Ghulfam Alam (Retd), Member Board / Project Director of the two power project entities, on behalf of Foundation Wind Energy-I Ltd and Foundation Wind Energy II Ltd and Mr Arif Alauddin, CEO AEDB, on behalf of the Government of Pakistan. Managing Director of the two companies, Lieutenant General Muhammad Mustafa Khan (Retd) speaking on the occasion briefed about the projects. He informed that the two wind farms having total project cost of approx. US $251 Million are being financed by Asian Development Bank and Islamic Development Bank and syndicate of local banks led by National Bank of Pakistan. The debt financing, which is 75percent of the project cost, is purely Sharia Complaint and is the first of its kind in Pakistan. The remaining 25 percent of the project cost is being financed via equity investment, arranged by Fauji Foundation group (Fauji Foundation and Fauji Fertiliser Bin Qasim Ltd), CapAsia Singapore and Tapal Group Karachi. He said that the Engineering, Procurement and Commissioning (EPC) Contractor of both the projects is with a consortium comprising M/s Nordex Germany & M/s Descon Engineering Limited, Pakistan. Both the projects are being installed with a cumulative of forty Nordex Wind Turbines each having a capacity of 2.5 MW. The combined total energy output of both the projects in approx. 288 Gwh per annum. He said that the two projects were targeting to have their Energy Purchase Agreement, signed in December 2012 and achieve financial closure immediately thereafter. Financing agreement was signed in May, 2012. The completion period, of each project, is 15 month from Financial Close, and both the projects are being targeted to be operational during second quarter of 2014. He said that FFC Wind Energy Limited (FFCEL) has already established a 50MW Wind project, which is ready to be commissioned during the current month.

Copyright Independent News Pakistan, 2012

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Donors urged to focus on energy as high priority area

Energy sector is a big and pressing challenge for Pakistan because it is affecting business in the country badly, said Deputy Chairman Planning Commission, Dr Nadeem Ul Haq here on Thursday. Speaking at the opening session of the of two-day annual conference arranged by the United States Agency for International Development (USAID) to review a range of policy issues to reduce rural poverty in Pakistan, he said the policies framed by the country have failed to deliver and the country does not have adequate resources for research and development and consequently nothing could be done indigenously. Haq said Pakistan's biggest problem is energy but the country was not being extended any help as donors have been talking about social sector. He added that energy crisis has been dominating everything and agriculture was no exception. He said capacity building would not help unless it is based on local experience. Later, talking to media, he said reforms in the power sector are going to take time and serious efforts were made by the Planning Commission recently to bring about improvement. However, he remained tight-lipped to a question whether efforts to reform the power sector yielded any result and the major hurdles in this regard. Talking to media Deputy Mission of the USAID Rodger Garner said the purpose of the event and programme was to empower the policy makers and academia in finding indigenous solution to the problems. He said that the USAID has been helping Wapda in improving supply issue in the power sector and have been trying to make the people understand that how other countries have tackled the energy crisis. Dr Paul Darosh, Divisional Director Internal Food and Policy Research Washington underlined the need for making investment in the agriculture sector of Pakistan especially in livestock. He said that use of better seeds and technology could be very helpful in moving towards production of high quality produce. The two-day conference funded by the US government was launched on Thursday to support Pakistani researchers and the government to make evidence-based policy reforms that addresses rural poverty. The Pakistan Strategy Support Programme (PSSP) is a programme of the USAID. Rodger Garner said that the US supports Planning Commission and many Pakistani researchers to help them reduce poverty in Pakistan. "These efforts will contribute to a stronger, brighter future for all Pakistan," he added. The PSSP is a four-year US-funded initiative under the Pakistan Planning Commission's framework for economic growth implemented by the International Food Policy Research Institute (IFPRI).

Copyright Business Recorder, 2012

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10-year hydropower action plan to meet growing energy needs in Khyber Pakhtunkhwa

The ANP-led coalition government in Khyber Pakhtunkhwa on Monday claimed that it had executed several mega hydel power generation projects during last four and half years to overcome with growing energy needs in the province. "A 10-year hydropower action plan had been prepared under which 24 different power generation projects would be carried out to generate 2100 megawatts electricity, said Ejaz Zafar Iqbal, Secretary Energy and Power Khyber Pakhtunkhwa, while giving a presentation regarding achievements of provincial government in the sector during four and half years. On the occasion, Khyber Pakhtunkhwa Minister for Information, Mian Iftikhar Hussain, Senior Minister, Rahimdad Khan, Additional Secretary Energy and Power KP, Syed Zainullah, Provincial Information Secretary, Azmat Haneef Orakzai and other officials of relevant department were present. The Khyber Pakhtunkhwa coalition government has decided to apprise masses about different initiatives it had undertaken during its tenure. In this connection, ministers and secretaries of all departments would come one by one before the media and give information about the government's achievements. The Secretary Energy and power informed that the department with efforts of provincial government had obtained three mega hydel generation projects from Federal government and private sponsors. A total capacity of power generation of 24 hydel generation projects is 2004 megawatts, which would be completed at cost of Rs 334.497 billion, he added. Of the total projects, he informed the Matilan HPP, Swat of capacity of 84 megawatts, Lawi HHP, Chitral with capacity of 69 megawatts, and Daral Khwar, Swat of total capacity 36 megawatts has so far executed. A total power installation capacity of Khyber Pakhtunkhwa is about 20514 megawatts against the actual generation capacity of 13857 megawatts, he said. While he said the two feasibility studies had also completed, including Shusghai in district Chitral with power generating capacity of 144 megawatts, while Shogosin with capacity 132 megawatts. The both projects, he said, would nominal cost at Rs 6.06 million against the total cost of Rs 301.369 million. A total of three projects would be completed under short term hydel development programme to generate 56.20 megawatts electricity with completion period of three years. Under the medium-term plan, eight projects would be initiated of total capacity of 625 megawatts, while around 13 projects would be executed of total capacity of 1322 megawatts under the long-term hydro power generation strategy. On head of royalty from hydro carbon sector, he said the province is received total revenue of Rs 22157.543 million. Of which, he said Rs 11747.050 million on head of crud oil, Rs 4242.290 million on natural Gas, excise duty on gas Rs 2468.620 million, while Rs 3700.583 million on head of gas development surcharge. The revenue had been doubled due to increasing production of natural gas and oil during last four and half years, he claimed. While the provincial government will fetch Rs 145 million per annually by water usage charges on equal basis from private sector along with power house situated in Azad Jammu Kashmir. Regarding the hydro carbon production and reserves in KP, he said that a total of oil production is about 7,806,263 BBL, while gas production is around 124, 853 million metric cubic feet. The total estimated reserves of oil are about one billion barrels, while gas reserves touched at four trillion cubic feet. The KP government will own assets of such private hydro-power projects after abolishment of concession period, while the department has successful put off bar on 50 megawatts on private sector for development of hydro projects in the province, the secretary energy and power informed. The secretary said the government took an initiative for establishment of oil and gas company and oil refinery for exploration of natural resources in the province. He said that the oil company would be functionalized without a year, while the refinery would take two and half years to become operational in the province. The Khyber Pakhtunkhwa government, he said, is being carried out two projects in PPP mode in collaboration with Wapda and private sector with equal distribution of 24 percent, which was including Lower Palas Kohistan with capacity of 665 megawatts, and Lower Spat Gah Kohistan 496 megawatts. He informed that provincial government was also working on renewable energy programme for which carrying out a feasibility study for determining solar and wind potential along with establishment of power plant. While speaking on the occasion, Khyber Pakhtunkhwa Minister for Information, Mian Iftikhar Hussain said that the government had started work for development of hydro power while keeping in view the growing energy need in the province.

Copyright Business Recorder, 2012

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USAID Energy Policy Project: 15 engineers begin internship at Guddu Thermal Power Station

Fifteen young engineering and business graduates including one female engineer started their internships at the Guddu Thermal Power Station on December 12. The six-month internship programme, designed with support from the US Agency for International Development (USAID) Energy Policy Project, seeks to provide young graduates with valuable practical experience in the energy sector to help them obtain employment more quickly. "We hope that this internship programme will go a long way in building the capacity of power sector entities by engaging the youth for a brighter future of Pakistan," said Daniel Vincent, Deputy Chief of Party, USAID Energy Policy Project. "Through the internship programme, the interns will have the opportunity to apply their intellect and knowledge in a real working environment and gain experience which will help them transition to the professional world." The interns were selected through a competitive process, consisting of an aptitude test and panel interview with particular focus on merit and transparency. The selected candidates hail from 8 different areas of Sindh, including Sanghar, Khairpur, Hyderabad, Tharparkar, Kashmore, Larkana, Ghotki and Mirpurkhas. Speaking at the ceremony, Farooq Jamshed, an intern belonging to village Pir Jo Goth, Khairpur said, "I am thankful to USAID for providing me with this great opportunity to learn and build my career. I am hoping to know more deeply and gain experience in the field of electronics and its use in the power sector." Other speakers at the ceremony included Aslam Sheikh, CEO Guddu Thermal Power Station, and Munir Ahmed from USAID Energy Policy Project.-PR

Copyright Business Recorder, 2012

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'Global production of biofuels increases'

In recent years global production of bio-fuels has increased dramatically, this phenomenon has been most marked in highly energy consuming regions such as the European Union and North America, and in primary producer regions such as Brazil, Malaysia and Indonesia. This was stated by Speakers at a Seminar on "Current Progress towards the efficient Micro algal Bio-fuels" organised by Institute of Soil and Environmental Sciences at New Senate Hall. The seminar was chaired by UAF Vice Chancellor Prof. Dr. Iqrar Ahmad Khan Korean Scientist Jung In Han was the Guest of Honour, Dean Faculty of Agriculture, Prof. Dr. Muhammad Arshad (TI) presented welcome address. Dr. Iqrar Ahmad Khan said that the future prospects for 2nd generation fuels such as bio-hydrogen and feed stocks such as lingo-cellulosic biomass should be examined by scientists keeping in view the broader aspects of bio-fuels and their long-term future in the context of global food production, population growth, fossil carbon substitution, and climate change. He maintained that Scientists should device bio-fuel cropping strategies by utilising un-cultivated, barren and desert soil resources otherwise food security for the future generations could not be occurred. Jung In Han said that United States has planned to replace 75 percent of its imported fuel (>9.2 billion tones by bio-fuel up to 2025, and that total gasoline use would be reduced by 20 percent (4.1 billion tones) by 2017. He added that the fuel shortfall would be replaced by renewable, especially bio-fuels. However, even using the best bio-fuel crops, generation of this 4-9 billion tones oil equivalent (TOE) would require over a billion hectares, or 5-6 times the US total arable land area. He was of the view that over recent years, US policymakers have favoured bio-fuel production by granting subsidies to farmers and processors and by greatly increasing public and private investment in R&D, especially relating to lingo-cellulosic biomass. He said that another major global trading bloc, the European Union, has set a minimum 10 percent obligation for transport bio-fuel use in the EU27 nations by 2020 In addition to increased imports, especially of palm biodiesel, this obligation will require the use of large amounts of current domestic oilseed production, as well as about 60 million tones (MT) of cereals for bio-ethanol production. Dr. Muhammad Arshad said that Institute of Soil and Environmental Sciences is working on cultivation of Bio-fuel Plants on Sewerage Water and results of this research outcome would be translated into business with the collaboration of industrial sector. He added that conversion of plant carbohydrate to ethanol requires relatively complex and highly energy consuming fermentation; distillation and dehydration processes and ethanol fuels are less efficient in engines than either diesel or gasoline. He urged the scientists to find solution for the realistic options for generating this quantity of bio-fuels Current bio-ethanol fuels which are most commonly (and most efficiently) obtained from starch- or sugar-rich carbohydrate crops such as sugar cane or maize, "although they can also be derived from other renewable sources such as some grasses and fibrous plants," he added.

Copyright Business Recorder, 2012

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Solar firm chief meets Zardari

The Chief of CX Solar Company called on the President Asif Ali Zardari in Seoul and discussed co-operation in the field of solar energy. A delegation of GS Engineering and Construction Company led by its President also called on President Asif Ali Zardari.

Copyright News Network International, 2012

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Workshop on Sustainable Energy held

National Productivity Organisation (NPO-Pakistan) in collaboration with United Nations Industrial Development Organisation (UNIDO) Pakistan organised a workshop Friday on projects for "Sustainable Energy Initiatives for Industries in Pakistan" under GEF funding in league with Government of Pakistan. The Chief Guest Muhammad Basharat Raja, Advisor to Prime Minister said that government supports initiatives carried out by UNIDO and NPO. He said that energy stands at the forefront of the complex and interconnected challenges that define our increasingly global world. He stressed that we should ensure universal access to sustainable energy as this is pre-requisite to achieving sustainable development and driving new models of economic growth. Alois Posekufa Mhlanga, UNIDO Project Director said that the United Nations Secretary-General (UNSG), Ban Ki-moon has declared 2012 as the International Year of Sustainable Energy for all. He said that Energy is like a golden thread that connects economic growth, increase social equity and creates an environment that allows the world to thrive. Khawaja Muhammad Yousuf, CEO-NPO said that NPO through its energy audits has successfully been saving energy cost of various industries to 15 percent and thus this mindset need to be created among masses. He said that energy efficiency is more important than energy generation. He said that UNIDO-NPO partnership has always been in favour due to the aligned mandate of both institutions. Ms Ghazala Raza who represents GEF Pakistan said that there is a need to seek market environment in which usage of renewable energy is promoted by adopting energy efficient technologies with defined measurements in Pakistani Industries. Muhammad Ali Ghardazi Secretary Climate Change, Kazi Abdul Muktadi Deputy Governor, SBP, Jan V. den Akker UNIDO International Expert, Syed Hasnain Director SBP, Israr Husnain Director SBP, Muhammad Abdullah Chairman IPP Advisory Council, Ms Ghazala Raza GEF Pakistan and Muhammad Matloob Khan UNIDO present there.-PR

Copyright Business Recorder, 2012

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Russia may back gas pipeline project if asked

Russia would consider supporting the Pakistan-Iran gas pipeline project if Pakistan sought its help, a senior Russian diplomat said on Saturday. Talking to The Express Tribune on the sidelines of a conference organised by the Voice of Russia at the South Asian Free Media Association office here on Saturday, Russian Embassy Political Counselor Vladimir Shreter said Pakistan was a sovereign state and it should take decisions independently. He said ties between Pakistan and Russia would improve in the coming days. “Russian President Vladimir Putin didn’t cancel his visit to Pakistan, rather he just postponed it due to some engagements. He is eager to meet President Zardari at some other place,” he said. He said Russia didn’t want to become just another donor for Pakistan, rather it wanted to engage Pakistan in mutually- beneficial areas. He said both countries wanted cordial ties. Earlier, MNA Naseer Bhutta, addressing the conference, said the ice between Russia and Pakistan was melting. He said the two governments should take steps to improve bilateral ties. He said Pakistan could benefit from Russian assistance in several fields. The Voice of Russia is an international multimedia broadcasting service sponsored by the Russian government. It broadcasts a programme in Urdu every day and has many listeners across Pakistan. The VoR organised the conference to interact with its listeners for the first time in Lahore. V0R South Asia head Irma Maksimenko, speaking in fluent Urdu, said an agreement between Pakistan and Russia to run VoR transmissions on FM radio could be signed in the near future, V0R presenter Mujahid Mirza also addressed the conference. Fahd Younis, president of the Listeners Club in Layyah, talking to The Express Tribune said, “I have been listening to VoR since 2007. Their programmes are very informative and entertaining. I have learnt the basics of the Russian language through the VoR Urdu service. Their programme Mashal-iRaah guides youth on different issues. We get to learn a lot about Russian culture through their Urdu broadcasts.”

Copyright The Express Tribune, 2012

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Work on IP gas pipeline in Pakistan to begin in next 30 days

Construction work of Iran-Pakistan gas pipeline on the Pakistani side will likely commence in next 30 days, Shana news agency said citing Javad Oji, Managing Director of National Iranian Gas Company (NIGC). Iran's private sector companies have started their activities in Pakistan and Iranian banks will provide financial resources for construction of the pipeline, Natural Gas Asia quoted him as saying. The news agency said that there is also a suggestion that Iran will allocate a 500 million dollar credit to the project and the remaining financial needs will be met by collecting taxes from gas consumers in Pakistan. Also, it is planned Iranian and Pakistani companies would form joint venture for completion of the pipeline inside Pakistan territory.

Copyright News Network International, 2012

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OGDCL, joint venture partner discover gas at Zin

The Oil and Gas Development Company Limited (OGDCL) with its partner Government Holdings Private Limited (GHPL) discovered a gas reservoir of 1.06 Trillion Cubic Feet (TCF) at Zin SML-I Block located in District Dera Bugti of Balochistan. This was revealed by Masood Siddiqui, Managing Director of OGDCL during a briefing to Asim Hussain Advisor to the Prime Minister on Petroleum and Natural Resources. OGDCL holds 95 percent working interest in Zin Exploration License and the remaining 5 percent are with its joint venture partner GHPL. Siddiqui said the discovered gas reservoirs are of low calorific value but with the right technology, it could be enhanced to better quality gas. Zin SML-I well was drilled down to the depth of 1050 meters, targeting to test the potential of Sui Main Limestone formation. The target zone age has tested 8.05 mmcfd gas through 128"/ 64" choke. "Significant reserves of hydrocarbons have been found at Zin X-1 well," OGDC MD claimed and added that the first targeted zone Pab Sandstone of Cretaceous age had tested 5.48 mmcfd gas through 32/64 inch choke at well-head flowing pressure of 1050 psi. According to a senior official of OGDCL, "we will have to drill about 25 to 30 more exploratory wells in the areas to determine the exact reservoirs of gas and it will take us up to three years. We are committed to our task and hopefully once necessary explorations commenced we will get between 150 to 250 mmcfd per day gas from the Zin Block," the official added. "This discovery will add to the hydrocarbon reserves base of the company and its joint venture partner," said the company secretary. Asim Hussain while congratulating the OGDCL and GHPL said the government is providing substantial incentives to the oil and gas exploration companies. He said successful road shows were held in USA and UK to attract foreign oil and gas exploration companies. Hussain emphasised on balancing the current energy mix of Pakistan, which is heavily dependent on natural gas. Advisor on petroleum expressed confidence that this discovery will add to the hydrocarbon reserves base of the JV partners, bringing significant earnings for the country.

Copyright Business Recorder, 2012

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Byco announces completion of largest oil refinery

Byco Oil Pakistan Limited on Wednesday announced the completion of the country's largest oil refinery at Mouza Kund, District Lasbella, Balochistan. At present the Refinery is in state of pre-commissioning and preparatory activities wherein different plants, equipment & instrumentation are being put to confirmatory checks and tests. Cold circulation of crude oil has already been established and sustained. Also furnaces of different Process Units have been test fired. The Refinery is ready for hot commissioning and start up. This newly commissioned petroleum refinery will have an installed refining capacity of 120,000 barrels per day. Combined with existing and fully operative smaller refinery, the cumulative capacity shall be over 155,000 barrels per day which is 55 percent higher than the existing largest refinery in Pakistan. Thus it will enhance overall crude oil refining capacity in the country from existing 12.25 to 18 million tons per year and will significantly contribute in reducing import of deficit refined petroleum products in the country. This Refinery can be further expanded up to 180,000 bpd. Along with this new Refinery, the country's first Isomerisation Plant is being commissioned. The introduction of Isomerisation technology in Pakistan will not only enable this refinery to produce higher volumes of motor gasoline to meet the country's demand but this will be the first environment friendly motor gasoline, with almost nil content of Benzene. The first parcel of crude oil for this refinery will be brought to the country's first single point mooring installed 10km into the Arabian Sea for direct discharge to the refinery storage tanks. This facility can discharge tankers carrying over 100,000 metric tons of crude oil. With an investment of significantly over 600 million dollars and rising, Byco also operates a fast growing petroleum marketing business network comprising 222 retail outlets.-PR

Copyright Business Recorder, 2012

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An offer you cannot refuse: Iran offers crude supply on deferred payment

Iran has given Pakistan an offer that looks like it is too good to refuse. Tehran offered 100,000 barrels per day of crude supply to fuel-starved Pakistan on a long term deferred payment. This offer comes amid US efforts to block Iran’s oil exports to the world to build up economic pressure in an attempt to curb Tehran’s ‘going nuclear’ ambitions. Sources told The Express Tribune that the Iranian government made the offer during the visit of the petroleum adviser Dr Asim Hussain to Tehran earlier this month. According to sources, Iran had also offered to enhance supply if the two sides moved ahead on the proposed oil exports plan. The crude oil imported will be processed by Pakistani refineries. “Iran is losing half of its oil revenues because of international sanctions imposed over its disputed nuclear programme,” AFP quoted Iran Economy Minister Shamseddin Hosseini as saying on Monday. Hosseini put down the loss to difficulties in repatriating oil money. According to the International Energy Agency, Iranian exports in November were estimated at 1.3 million barrels per day, down from nearly 2.3 million last year. The US is making efforts to block Iran’s oil exports as it estimates that crude sales provide about half of Iranian government revenues and that oil products make up nearly 80% of the country’s total exports. US is already working to convince the Government of Pakistan to shelve the Iran-Pakistan (IP) gas pipeline project, designed to import 750 million cubic feet per day (mmcfd) of gas from Iran to meet its domestic requirements. The recent Iranian offer may further anger the US and pressure may build upon Pakistan to refuse. “At present, Pakistan is facing problems in repayment of the International Monetary Fund (IMF) Stand-By Arrangement $7 billion loan and long term oil credit facility may ease pressure on foreign exchange reserves,” a senior government official said, adding that however, Pakistan many not be able to materialise the offer due to payments issues. Pakistan was importing 73 megawatts (MW) to meet the requirements of Gwadar in Balochistan but payment issues were hampering these imports. Previously, Tehran supplied 45,000 barrels of crude oil to Pakistan on a three-month deferred payment plan until January 2011. However, the United Nations imposed sanctions halted imports due to difficulties in opening letters of credit from global banks. Since then, Iranian oil is largely smuggled into Pakistan. “So, the payment issue may again halt the oil supplies if offer materialises,” official said. An official said that Pakistan Refinery Limited (PRL) was designed in 1962 to process Iranian oil. “But consumption of Iranian oil in Pakistan is very low and therefore PRL has made modifications,” he said, adding that no refinery in Pakistan can process 100% Iranian crude oil. “The oil pipeline between two countries may be feasible If Iran sets up a refinery in Pakistan,” he added. Sources said that petroleum adviser Hussain had also discussed a plan of establishing a Iran-sponsored refinery in Gwadar and laying an oil pipeline between two countries. “Under the plan, an oil pipeline is to be laid right up to the Gwadar Port, where a crude oil refinery will be set up. Pakistan and Iran may enter into a joint venture partnership to set up the refinery,” sources said. Iranian oil had more component of furnace oil and Pakistan furnace oil requirement had increased from three to four million tons in 2004-05 to nine million tons in the ongoing financial year. The production of furnace oil capacity of local refinery is up to 3.5 million tons annually. At present, the Pakistan State Oil (PSO) is a major importer of furnace oil to meet requirements of the power sector. “Pakistan may also meet furnace requirements by importing crude oil from Iran,” an industry source said, adding that Pakistan may save 20 cents per barrel as it will no longer have to bear the costs of transporting Iranian oil.

Published in The Express Tribune

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PPL gets Corporate Philanthropy Awards

Pakistan Petroleum Limited (PPL) was adjudged the largest corporate giver by total volume of donations for 2011 at the Corporate Philanthropy Awards hosted by Pakistan Centre for Philanthropy in Karachi on December 12. The company bagged the award for the eighth consecutive year in the same category. Sindh Assembly Speaker Nisar Ahmed Khuhro presented the award to PPL's Deputy Managing Director Moin Raza Khan. The event was attended by leading businessmen, representatives of multinational companies, government and civil society representatives, donors and media. Khuhro, speaking at the event, highlighted the government's inability and constraints in reaching out to disadvantaged segments of society and commended the corporate sector for bridging the gap. As a responsible corporate organisation with a stake in the country's development spanning over 60 years, PPL believes in sharing the benefits of development with underprivileged communities, primarily in and around its operational areas with initiatives in community healthcare, education, livelihood generation, infrastructure development and disaster relief and rehabilitation.-PR

Copyright Business Recorder, 2012

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Eni to buy new exploration block

Italy''s Eni has strengthened its hand in Pakistan by agreeing to buy offshore gas acreage as the oil and gas major continues to channel cash into more profitable upstream activity. In a statement on Thursday Eni said it had signed a deal with Pakistan and state oil company OGDCL to acquire 25 percent and operatorship of the offshore Indus Block G licence, located in Indus Basin. Eni is the leading foreign producer in Pakistan with an equity output of 58,000 barrels of oil equivalent per day (boed). In September it announced a significant onshore gas discovery in a country which it is counting on as part of its strategy to develop assets and bring them to market rapidly. Huge cost overruns and delays at Kashagan, the world''s largest oil development, have raised questions about its ability to deliver large-scale projects on budget and on time. Eni, the world''s No 7 oil company in terms of production, is selling non-core assets like gas transport group Snam and Portuguese energy group Galp Energia to focus on oil and gas exploration. The company, which produced 1.7 million boed in 2011, has said it is looking to add more than 1.3 million boed of new production by 2022. Over the past year, Eni has dispelled some of the scepticism about its profitability and growth potential by clinching a deal with Russia''s Rosneft and scoring exploration successes in Norway and Mozambique.

Copyright Reuters, 2012

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Petroleum policy: Asim invites investors to benefit from price regime

Highlighting Pakistan's recently announced petroleum policy and the country's vast potential, Dr Asim Hussain, Advisor to the Prime Minister on Petroleum and Natural Resources, has invited investors to benefit from the price regime. He was speaking at the Pakistan Petroleum Exploration Conference, 2012 sponsored by E&P companies/service companies and organised by Ministry of Petroleum and Natural Resources. As part of efforts to showcase Islamabad's friendly investment policies in oil and gas sectors, the Ministry of Petroleum and Natural Resources is holding Pakistan Exploration and Promotion Conference, 2012 in two important economic centers of the world; Houston and London. He particularly drew attention to the offering of 60 new concession blocks for bidding round of the promulgation of Petroleum Policy, 2012. Dr Asim Hussain described the policy as one of the best in the world since it offers level-playing field for E & P companies, both local and international. The policy offers price up to a maximum of $6.5 per mmbtu for onshore and up to a maximum of $9 per mmbtu for offshore oil and gas discoveries. He also informed that government of Pakistan for the first time in its history has formulated policies on Tight Gas and Low BTU Gas while policies on shale gas, flared gas, Marginal and Stranded oil and gas fields will soon be announced, a news release said. As regards prospects of oil and gas exploration in the country, Dr Asim Hussain underlined that Pakistan is endowed with vast sedimentary area of over 800,000 square kilometres of which over 70% is yet to be explored. The success ratio of oil and gas discoveries is one of the best in the world as is evident from the success ratio of 1 : 3.22 discovery rate. The other speakers included Aquil Nadeem, Counsel General of Pakistan, Houston, G. A. Sabri, former Secretary Petroleum, Qazi Mohammad Saleem Siddiqui Director General, Petroleum Concessions, Masood Siddiqui, MD, OGDCL, Asim Murtaza, MD, PPL, Peter Seitinger, Country Manager, OMV Pakistan. Peter Seitinger of OMV, Pakistan informed the audience of his company's work experience in Pakistan and said that his company benefited immensely from the investor-friendly policies of the Government of Pakistan and the overall experience was very rewarding for OMV. The conference was attended by representatives of leading international and local oil and gas companies. They evinced a keen interest in new Petroleum Policy, 2012 and appreciated its investor friendly contours, which would go a long way in attracting the much needed foreign investment and subsequent discoveries to ensure the energy security of the country. During the conference, a signing ceremony between the Government of Pakistan, GHPL, OGDCL, PPL, United Energy of Pakistan (UEP) and ENI was held regarding farm-in farm-out of shares in Indus-G off shore block of ENI. During the question-answer session, potential investors and E&P companies seeking sought to know about oil and gas sector and policies of the government.

Copyright Associated Press of Pakistan, 2012

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‘US to provide $2.1m for international consultancy on LNG project’

ISLAMABAD: The US has shown its willingness to bailout Pakistan of the energy crisis and to this effect, it has signed a memorandum of understanding (MoU) with Pakistan on international consultancy for LNG project, Dr Asim Hussain, adviser to the prime minister on petroleum and natural resources told The News after attending the meeting of the fourth Pakistan-US Energy Working Group on Friday. The United States will provide $2.1 million to the UK-based company, QED, for extending the consultancy to Pakistan on the project to import liquefied natural gas (LNG), he said. “We are going to open request for proposal from the potential bidders on Monday,” he said. Dr Hussain said that Pakistan will import one billion cubic feet LNG per day. The US has also agreed to help explore shale gas in Pakistan, as it has best expertise in exploring the gas. When asked if the US will also come up as LNG supplier in the project, Dr Hussain said, it will only provide international consultancy for the project. Carlos Pascual, special envoy for international energy affairs of the US, said: “Today, the United States government and the government of Pakistan launched a new initiative to help the latter acquire liquefied natural gas more efficiently.” “This initiative shows that the two countries are jointly working on concrete actions to relieve Pakistan’s electricity shortage. It will accelerate the liquefied natural gas procurement process and offer a cheaper alternative to Pakistan’s current fuel oil imports.” The LNG consultancy, which will commence before the end of the year, will assist the Pakistan government in the assessment of liquefied natural gas supply and delivery from the international suppliers. The effort will speed up the procurement process and help the government save expenses of fuel oil imports that are currently used to generate much of the nation’s electricity. The consultancy will also provide market analysis and technical assistance to the government’s implementer of LNG imports. Earlier, a meeting of the Pakistan-US Energy Working Group was held, which was attended by Carlos Pascual as head of the US delegation. Nargis Sethi, secretary for water and power, chaired the annual Energy Working Group meeting from the Pakistan side. The adviser on petroleum and natural resources and secretary petroleum and natural resources also co-chaired a session during the meeting. The meeting is part of an ongoing bilateral dialogue to help address Pakistan’s energy sector challenges, including power generation, fuel, gas, and reform priorities. The water and power secretary highlighted the need of an improved and sustained governance structure as the key for a sustainable power sector and the steps taken so far. Pascual welcomed the Pakistani government’s commitment to the reform process, improving governance, improving the financial viability and efficiency of the power sector and the energy sector, in general, and attracting private sector investment in the energy production and distribution, in particular. Pascual also welcomed Pakistan’s adoption of the Petroleum Exploration and Production Policy 2012, saying that it has the potential to attract and boost investment in exploration across Pakistan. The water and power secretary expressed appreciation for the US assistance extended under the power distribution improvement project and the energy efficiency programmes. The US and Pakistan together are carrying out large-scale energy projects that will add 900MW of capacity to the national grid by the end of the next year — enough to supply electricity to an estimated two million households. The US technical assistance is also supporting crucial policy and management reforms underway in the ministry of water and power.

Copyright The News, 2012

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OGDCL discovers gas in Khairpur

Oil and Gas Development Company Limited (OGDCL) has discovered 20 Million Cubic Feet per Day (mmcfd) gas from Suleman-I exploratory well located in District Khairpur, Sindh. According to OGDCL spokesman, the company is also operating in Khewari Block Joint Venture and having working interest of 95 percent and Government Holding Pvt Limited (5 percent). The structure of the Suleman-I was delineated drilled down to the depth of 4,575 meter. This is the second discovery of hydrocarbons in the current financial year. Earlier, OGDCL had made discovery of hydrocarbons at Nashpha in District Kohat of Khyber- Pakhtunkhawa (KP) in September 2012. During the on-going financial year the OGDCL has planned to drill 37 wells in the country. Exploration activity in Pakistan remained slow in recent years due to low prices offered by the government and the impact of circular debt in the oil and gas sector. The country has gas reserves of 23 tcf/day. Pakistan''s current domestic gas demand exceeds its production capacity of 4.2 bcf/day by 1.2-1.4 bcf/day, which increases to 2 bcf/day in winter. If adequate gas is not discovered within 3-4 years, the shortfall is projected to increase to 2.5-3 bcf/day.

Copyright Business Recorder, 2012

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Oil and gas sector: advisor assures E&P companies full cooperation

The government of Pakistan has assured the exploration and production companies working in the oil and gas sector of full cooperation. Prime Minister's Advisor on Petroleum and Natural Resources, Dr Asim Hussain while addressing the inaugural session of the Annual Technical Conference (ATC) jointly organised by Pakistan Association of Petroleum Geoscientists (PAPG) and Society of Petroleum Engineers (SPE), here on Tuesday said the government will protect local as well as foreign investment in the oil & gas sector. To facilitate and attract investment in oil, gas and other natural resources, the government has announced Petroleum Policy 2012 and Mineral Policy 2012 has also been adopted by the Council of the Common Interests (CCI). These policies were formulated with an objective to bring investment in the natural resources sector of Pakistan. Within next 8 months about 750 mmcfd of gas would be added to the system, which would increase local gas production by 20 percent. But with each passing day gas supply/demand gap is increasing and to deal with the situation the government is working on multiple options, he added. Asim emphasised upon the E&P companies to take full advantage of these investment friendly policies, which offers investors' international level wellhead gas price as well as protection to their investment. He said the government while re-affirming its commitment towards bridging the widening gap between demand and supply and securing a safe energy future announced the Petroleum Exploration and Production Policy 2012 on August 27, 2012. In addition to the tight gas, Low BTU Gas, LNG and LPG policies issued earlier, this is the second petroleum policy issued by the present Government almost 2 years after the 2009 policy, with an aim to attract new investment for exploitation of indigenous natural resources and decrease reliance on imports. The advisor further said that the primary objective of this comprehensive policy is to optimise the processes and procedures, tax and pricing regime in respect of the petroleum exploration and production. The major incentive provided in the new policy is on wellhead gas price, which has been revised upward to attract investment, both from existing and prospective investors. The government is also working on shale gas policy framework, which is in an advanced stage of finalisation, along with preparation of marginal and stranded gas and low pressure gas policies as well as guidelines for flared gases to tap available resources for the benefit of the country. Shale gas has been the game changer in North America and the same can be replicated in Pakistan if plans are executed in an optimum way. The LPG Policy 2012 is also under preparation. The government is also working on bringing in gas through the Iran-Pakistan (IP) and Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas pipeline projects to meet growing energy demand in the country. Additionally, the import of LNG from Qatar is also being considered. In terms of expanding the gas network within the country and providing new connections, Asim said during the tenure of the present government 1.6 million consumers were given gas connections, while 879-km of transmission lines and 38,828-km of distribution and service lines were added to the gas network. Advisor on Petroleum informed that the Government has recently announced a new exploration bid round offering 60 exploration blocks along with Road Shows in Houston and London scheduled for early December to showcase the Petroleum Policy 2012 and lure the multinational companies to participate in this bid round. Earlier, Moin Raza Khan, Chairman ATC 2012 and Dr Saeed Khan Jadoon Chairman SPE Pakistan welcomed the Advisor on Petroleum and the distinguished guests. The ATC is a premier technical event of the upstream oil & gas industry of Pakistan, which has attracted over 1,000 Exploration and Production (E&P) companies, besides petroleum industry professionals, service providers, scientists, professors and students as well as business community from across the country and abroad. ATC 2012 is an opportune platform to discuss and map a way forward to resolve the country's energy challenges of meeting growing demand in the face of dwindling resources, high oil prices and escalating capital costs. The event is providing an opportunity to E&P industry professionals, service providers as well as academia to present and discuss technical issues, including applications of innovative technologies and evaluate investment opportunities and share operational knowledge and experience of the sector. The conference also provides a forum for industry and academia to come together, collaborate and present their research work and case histories. The ATC is a regular activity in which petroleum sector experts and managers from abroad and Pakistan participate and share experiences in the form of technical sessions and panel discussions. The theme of this year's two-day conference is "E&P Technologies, Innovation & New Frontiers."

Copyright Business Recorder, 2012

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Pakistan, Korea ink six accords for modernization of Railways, LNG terminal, banking cooperation

SEOUL: Pakistan and Korea Tuesday inked six agreements dealing with modernization of Pakistan Railways, construction of LNG terminal, and cooperation in banking sector, in a bid to further solidify their bilateral ties. The signing of agreements in various sectors came during President Asif Ali Zardari's state visit to the Republic of Korea, during which he met his counterpart and had several meetings with the CEO's and heads of various top companies. President Zardari who witnessed the signing of almost all the Memorandums of Understanding urged the Korean investors to benefit from Pakistan's generous incentives. Korean counterpart Myung-bak Lee also witnessed the signing of two accords at the President's Office. The ceremony here at the Cheong Wa Dae, following the Summit level talks between the two sides, was also witnessed by members of Pakistani delegation including Minister for Water and Power Ch. Ahmad Mukhtar, Minister for Commerce Makhdoom Amin Fahim, Minister of State for Foreign Affairs Malik Amad and the leader of PML-Q Chaudhry Shujaat Hussain. A major breakthrough came in the area of modernization of Railways. Pakistan, under the agreement, will seek high speed railways, communication systems, signaling, rail stock, modernization of operation and management, development of logistics parks and freight terminals, exchange of construction and maintenance technologies for infrastructure including tracks, bridges, overhead electrification and power supply systems. The agreement was signed by Muhammad Arif Azim Secretary Railways and Minister of Railways of South Korea Kwon Do-youp. President Zardari in his meeting with President KORAIL Chung Chang-Young said Pakistan desired modern and efficient railways to help meet its growing industrial, agricultural and freight needs. He said the current fleet of Pakistan Railways was unable to meet the needs of a growing nation and there was an urgent need to upgrade it. The President who had a number of meetings with the heads of top Korean business houses said Pakistan was a heaven for foreign investors as the country's large consumer population promised good profits and lucrative business. He said a large number of Korean companies were already operating in Pakistan and doing good business. He said other companies can invest in many new areas while the existing ones can expand and diversify their operations. President KORAIL assured President Zardari that his company was willing to share its experiences and expertise with Pakistan Railways and help it develop on modern lines. The President later witnessed the inking of a MoU under which Pakistan will be able to acquire used diesel locomotives and work for modernization, maintenance, operation and training of existing ones. President Zardari during his meeting with the President and Chief Executive Officer of Samsung C&T said Pakistan needs to augment its energy resources to meet the growing demand of its industrial and domestic requirements. He said Pakistan was diversifying its energy resources and using hydel, natural gas, solar, nuclear and wind energy to meet its needs. The President said Pakistan was looking forward to import of LNG to meet the demand. Under an agreement between Samsung C&T and the Board of Investment of Pakistan an off-shore floating LNG Receiving Terminal will be established. The President also met Governor Bank of Korea Kim Chung-soo and also witnessed signing of a MoU with the State Bank of Pakistan. Under the MoU the two central banks will develop closer cooperation through exchange of information, human resources, technical cooperation, sharing of experiences through seminars, workshops and short-term missions for study. The two countries also inked a MoU for enhanced cooperation in the field of culture, films, sports and tourism. Under the framework agreement on grant aid Korea will extend support to Pakistan through the Korea International Cooperation Agency (KOICA) and was aimed at poverty reduction, sustainable economic and social development besides further enhancing cooperation in diverse development sectors. KOICA was founded as a government agency on April 1, 1991. It was setup to maximize the effectiveness of Korea's grant aid programs for developing countries by implementing the government's grant aid and technical cooperation programs. It provides funding in education, health, governance, disaster relief, agriculture forestry and fisheries, industry and energy, environment and climate change.

Copyright APP (Associated Press of Pakistan), 2012

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Energy and exploration sectors: talks under way with PPL: Turkish CG

Turkey is looking for investment opportunities in the energy and exploration sector of Pakistan, said Turkish Consul General Murat Mustafa Onart. Talking to newsmen during his visit to Karachi Stock Exchange here on Friday, he said that presently talks were underway between Pakistan Petroleum Limited (PPL) and Turkish Petroleum Corporation for the investment in the exploration sector. He said that Pakistan had a lot of investment opportunities and Turkish investors would take full advantage of these opportunities. "Despite improved diplomatic relations between the two Islamic countries, trade relations are not up to the mark, therefore now we are focusing to enhance trade between Pakistan and Turkey," he added. He said that Karachi share market was aggressively progressing and hopefully further improve in the future. On the occasion, Nadeem Naqvi, Managing Director KSE, said that presently Unilever had only sent information to Karachi Stock exchange that its majority share holders were interested for buy-back and de-listing of Unilever shares from Pakistan's equity markets. However, he said, the company has so far not applied officially for de-listing of its shares. "Any company can de-list its shares, however, its KSE's responsibility to protect the investors' interest and a committee will negotiate with Unilever, once the formal application for de-listing will be received by the KSE," he added. "The committee will negotiate with Unilever on the share price, offered by the majority share holders, and will try to fix a valuation, which will be in favor of investors," he said. Talking about the market performance, he said that during the last three years listed companies had performed well and registered 20-22 percent growth. Later, Turkish Consul General rang the bell in the KSE trading hall to start trading of the day. Haroon Askari, deputy managing director, Zafar Moti and other were also present.

Copyright Business Recorder, 2012

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