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News Headlines for the month of
MARCH 2013

Oil & gas sector makes 10 discoveries

KARACHI: Following a lacklustre period of several years, when things remained quite on the oil and gas exploration sector, in the face of heightened security situation and circular debt issues, the oil and gas fields have started to buzz with activity. In the current financial year-to-date (July 1, 2012 to March 11, 2013) the country’s oil and gas sector has spudded as many as 56 wells. It represents a big leap over the 31 wells drilled in the same period last year. The sector has drilled 20 new exploratory wells as against 12 wells same time last year, depicting a significant increase of 67 per cent. On the discovery side, the picture was a lot brighter than the earlier years as a total of 10 discoveries have been made by the sector in FY13 so far. The sector’s drilling of a total of 56 exploratory and development (E&D) wells during the period also represents achieving 61 per cent of the full year target set at 91 wells. Even in that sphere, the sector fared better than the comparable period last year when only 41 per cent of the target 76 wells could be drilled. “O&G sector’s focus continues to remain on the development wells”, says Nauman Khan, analyst at Topline Securities. Of the total wells drilled, 36 were development wells (representing 64 per cent of total activity). It reflected improvement over 19 wells or 61pc of total wells drilled in the comparable period last year. Apart from the development wells, the activity on the exploration side also represented encouraging growth. Although, contribution of the exploratory wells had slightly declined to 36pc as against 39pc in the same period last year, the overall trend was heartwarming. The sector spudded 20 exploratory wells, which was significantly more than 12 wells drilled in the comparable period last year while it represented 45pc of full year target of 44 wells. Analyst said that amongst the listed companies, Pakistan’s largest oil and gas explorer, the Oil and Gas Development Company (OGDC) had drilled 13 wells which were 63 per cent higher than eight wells drilled last year. Included in those 13 wells, were two exploratory wells and 11 development wells. Pakistan Petroleum Limited drilled five wells (one exploratory and four development), up from two development wells in the comparable period last year. However, with full year target of 16 wells (six exploratory and 10 development), sector watchers expect the drilling activity of the company to significantly intensify in the remaining of the year. The third major oil and gas E&P company, the Pakistan Oilfields Limited drilled only one exploratory. In the comparable period last year, POL had drilled two exploratory wells. Though much of the success eluded the E&P companies on the listed sector, the revival and discovery would benefit the country. The darkest hour for the sector came possibly in late 2010 and early 2011, when exploration and development work had started to limp. According to the data compiled by Pakistan Petroleum Information Services (PPIS), 28 E&P companies in the country, that hold operator licences, together had drilled only 19 wells in first half of the year 2011, compared to 80 wells targeted for all of the FY11.Besides the poor security situation, the two major reasons for the underperformance of E&P companies were the nagging circular debt, which had affected the drillers’ liquidity thereby restricting their drilling portfolio and secondly, the continuation of the carry over wells of the earlier year that stalled companies from launching into new wells, keeping them focused on already drilled ground.

Copyright Dawn, 2013

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Byco's new refinery completes 72-hour test-run successfully

Byco's newly completed 120,000 (ie 6.00 million tons per annum) bpd oil refinery, largest in the country, successfully completed its 72 hours continuous performance test run at 60% of its capacity over the week-end. During the performance of test run operation the refinery produced fully on-specification petroleum products such as naphtha, kerosene, HSD and HSFO. Following the 72 hours run the newly constructed refinery has completed all critical tests which render assurance to credible mechanical integrity and operability. As a result, the refinery is ready in all respects for production of petroleum products. Speaking on this momentous occasion, Qaiser Jamal, CEO, Byco Oil Pakistan Limited, said, "We are thankful to Allah that this refinery project once a vision has today been transformed into reality. It is also a matter of pride that project construction and proving trial run has all been done using indigenous expertise thus BOPL reposed huge confidence in pure Pakistani human resource. This has not only given exposure to our people but also saved considerable foreign exchange for the government. We had to counter many detractors who, despite their unrelenting efforts, failed to dim our spirits. The result, today Pakistan's largest refining complex is ready to serve the nation".-PR

Copyright Business Recorder, 2013

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Gomal Zam Power House on test run

The Pakistan Water and Power Development Authority (WAPDA) has successfully completed the 17.4 megawatt (MW) Gomal Zam Power House - a component of the Gomal Zam Dam Project. Gomal Zam Dam is the first-ever mega project in the water sector constructed in the Federally Administered Tribal Areas (FATA). The power house is currently on a test run and will start providing electricity to the National Grid in a month. Gomal Zam Dam Project located in South Waziristan Agency, consists of three main components including dam, powerhouse and irrigation system. The dam was completed last year, the power house is now complete, while the irrigation system is at the advanced stage of completion. Gross storage capacity of the project is 1.14 million acre feet (MAF) of water to irrigate 163,000 acres of land. The power house will contribute 91 million units of electricity annually to the system, which is sufficient to supply power to about 25,000 households. Gomal Zam Dam Project is of immense importance for socio-economic uplift of the populace of remote areas, particularly FATA and Khyber Pakhtunkhwa. The project would ensure availability of water for irrigated agriculture, control floods and provide low-cost hydel electricity. The United States Agency for International Development (USAID) had provided $40 million to help complete the main dam and the powerhouse. Another $40 million are also being provided by USAID for completion of irrigation component of the project and $12 million are committed for development of Waran Canal System.

Copyright Business Recorder, 2013

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Interim government gears up to deal with power crisis

As the previous government completes its 5-year term and the general elections are fast approaching, the interim government is gearing up to deal with the acute power crisis responsibly by making all-out efforts to stop circular debt from increasing any further. The country has 17,000 MW capacity to generate but currently it is being operated at 9,000 MW against the demand of 14,000. The difference of 2,000 MW is understandable because hydel is not at full capacity but the rest 6,000 MW can be generated through making full payments to oil based plants and reallocation of gas from less efficient consumption to most efficient consumption. It will be too much to ask from the interim government to minimise the circular debt but by fully utilising production capacity of efficient power plants, the government can at least make sure that the circular debt doesn't climb further up, said an official of an IPP. One way is to allocate the fuel to most efficient plants (oil and gas based plants both). It will save Rs 25 billion annually. Another important thing is to make payment in time and save the delayed payment charges amounting to Rs 28-30 billions annually. Recently a report released by Planning Commission stated the way the power sector was governed in last five years. It explained the bad governance in the power sector entities, saying that all the power sector entities need to be run under corporate culture and then they should be sold out ensuring zero interference of the government. The performance of Discos and Gencos grossly deteriorated in last five years. The steps recommended by donors and lenders were never implemented with sincerity and commitment. Sources at the Ministry of Water and Power said the previous government added enormously to circular debt just because of worst governance at top level by not following the rules. The economic order which list down the cheaper sources of power generation was not only criminally ignored but was also ridiculed by generating power from most inefficient plants adding to circular debt which ballooned to new heights in previous regime. The data during the period from January to September last year shows that the per unit fuel cost of IPPs under 2002 policy on furnace based power plants stood at Rs 14.095 against the fuel cost of Rs 21.04 of Gencos. The per unit saving on gas based plants was Rs 2.36. However, the authorities did not use these IPPs to the fullest and made Gencos run to full capacity thus inflicting a huge loss on account of efficiency and eating up more fuel to generate as much power as IPPs would have made in less fuel. If the interim government makes similar mistakes, a wave of complete chaos is in sight. In the coming summer, either the whole country will be facing huge power breakdowns due to gap in power generation and consumption or will add up to circular debt. This prolonged issue has always been a big problem for every government in the past many years. For example, in 2006 total circular debt stood at Rs 111.26 billion; Rs 144.99 billion in 2007; Rs 161.21 billion in 2008; Rs 235.65 billion in 2009; Rs 365.66 billion in 2010; Rs 537.53 billion in 2011; and Rs 872.41 billion in 2012. The severity of the situation can be gauged from the fact that an amount of Rs 453.953 billion Pepco has to pay to gas companies, oil companies, Independent Power Producers, Discos, and others. According to the break-up of this payable as on January 11, 2013, Pepco owes Rs 36,265 million to Gencos on gas and Rs 15.344 billion to Gencos on oil. Despite the fact that they are saving billions of rupees of the government through their efficient plants, the IPPs are suffering the most due to this payment crises on the part of the government. The six IPPs under 2002 policy run on furnace oil have bill of Rs 59,737 million and six of them run on gas and diesel need Rs 21,734 million to be paid by Pepco. In total, the Pepco owes Rs 284,897 million to IPPs, with 196,841 million bill of those power producers run on furnace oil and Rs 65,296 million running on gas. It also includes the bill of Rs 22,760 million of those power producers running on nuclear fuel.

Copyright Business Recorder, 2013

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84 megawatts New Bong Escape hydropower project: Country''s first hydel IPP begins operation

Pakistan''s first hydroelectric Independent Power Project (IPP) - the 84-megawatt New Bong Escape hydropower project - has commenced commercial operations after obtaining certification by an independent engineer appointed by the power purchaser (CPPA/NTDC). The hydropower project, which is located about 7.5 kilometres downstream of Mangla Dam in Azad Kashmir, will utilise River Jhelum water which is being wasted for almost five decades. The project has been developed under Build-Own-Operate-Transfer (BOOT) basis, whereby it would be transferred to the government of Azad Kashmir free of cost at the end of a 25-year term. "The project, which started on December 28, 2009, commenced commercial operations on March 23, 2013 and is a pride for Pakistan," said Khalid Faizi, Director, Laraib Energy Limited, the project owner. The project has been established with an investment of $233 million at 75:25 debt-equity ratio. New Bong Escape Hydropower complex has been built by EPC contractors of Sambu Construction Company of South Korea. The energy generated by the project is being purchased by a single buyer ie Pakistan''s National Transmission and Dispatch Company Limited (NTDC) under a long term Power Purchase Agreement (PPA). Under the PPA the hydrological risk is borne by the Power Purchaser through guaranteed payment for fixed costs like debt servicing, O&M, ROE and insurance. A cost-plus-tariff mechanism is in place under the PPA and the Project has been allowed a tariff of Rs 6.8362/KWh (cents 8.5256/KWh). In May 1995, the government announced a hydel policy to encourage proposals for power generation based on indigenous hydel resources. The plan for 18-MW proposed for installation on the New Bong Escape was shelved and an LoI for 45MW was obtained under the Hydel Policy to develop the existing potential at the New Bong site. However, things did not change much and the public sector domination of hydropower meant very little encouragement to the private sector. Applications were received for development of some 2,000MW of hydropower projects under the 1995 Policy but all the projects failed and fizzled out as WAPDA offered tariff of 3.3 US cents per kWh, but refused to buy power at the policy tariff of 4.7 cents supported by a decision of Cabinet Committee on Investment (CCoI) which bypassed the policy and directed hydropower companies to negotiate tariff with WAPDA, the sole power purchaser. However, the New Bong Escape sponsors did not give up and continued their struggle. This short sighted approach of Government, by not being able to foresee that oil had a finite life and diminishing supply would ultimately drive up prices. Government''s policies damaged private hydropower due to inordinate delay in implementation of agreements by at least two decades, said an official of PPIB on condition of anonymity. "Had the policy been implemented some 2000MW of projects would be generating electricity at under 3.3 cents per kWh today, with a remaining useful life of at least 50 years and the current power crisis would have been mitigated to a large extent," said one of the experts. Finally, when the price of oil exploded, the realisation set in that hydropower development was very important as a hedge against high imported oil price and as an essential element for energy security of the country. The sources said, ADB decided to strongly support the project as a trailblazer in Pakistan''s efforts to develop private hydropower which was vital in laying the seed for limited-recourse project finance whereby lenders rely on the to-be-constructed project revenue stream as their prime security thus requiring a very tight and structured arrangement to manage and mitigate lenders risks.

Copyright Business Recorder, 2013

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OPIC approves $288 million for two wind power projects

The Board of Directors of the Overseas Private Investment Corporation (OPIC) approved a total of $288 million in financing for two wind power projects poised to deliver much-needed electricity to Pakistan and Peru. Affirming OPIC''s commitment to support efforts by Pakistan, OPIC President and CEO Elizabeth L. Littlefield said OPIC it would help diversify its energy production to include important contributions from renewable energy sources, says a press release issued on Saturday. "The wind power projects will enable both countries to take advantage of their massive renewable energy potential to help meet unmet demand for electricity," Ms Littlefield continued. "We are thrilled to partner with innovative US companies to bring these highly-developmental projects to realisation. "The provision of clean and reliable electricity is an essential building block of any economy," she added. The OPIC credit facility would help build a 50MW wind power plant in Gharo-Ketti Bandar Wind Corridor, designed to generate 133 Giga Watt hours of emission-free electricity annually. Using GE Wind turbines, the Sapphire Wind Power plant would help Pakistan diversify its power generation beyond reliance on high-priced fuel oil by tapping vast renewable energy potential, which the corridor alone possesses generation capacity of over 132,000MW - virtually equal to the world''s entire installed wind capacity for 2010. To date, OPIC has supported more than $200 billion of investment in over 4,000 projects, generated an estimated $75 billion in US exports and supported more than 277,000 American jobs. Talking about the OPIC financing the CEO AEDB, Arif Alauddin stated that he has been trying for OPIC funding for Pakistan projects for some time, and is glad to see it coming now. OPIC is already funding a SSJD Energy''s 12MW Baggass based Renewable Energy Project in Pakistan. In the wind sector, following Sapphire, Fina Energy of Turkey is the next project in the OPIC pipeline for Pakistan. CEO AEDB also stated that RE has already become the sector attracting the largest investment of any sector in the country. He expects that in the next two years Thatta alone will attract more than $2 billion in wind sector. This amount is expected to increase as soon as the solar tariff is announced.-PR

Copyright Business Recorder, 2013

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Khyber Pakhtunkhwa sets up first-ever solar energy system

The Chief Secretary, Khyber Pakhtunkhwa, Ghulam Dastagir Akhtar inaugurated the first ever solar energy system and Strategy and Analysis Wing (SAW) here Monday separately at Home and Tribal Affairs Department Civil Secretariat Peshawar. The Home Secretary gave a detailed briefing about the newly established SAW to the Chief Secretary with the help of data on maps and charts regarding law and order, Jails, Afghan Refugees, price hike and allied issues and exhaustive discussions were made and certain decisions for improvement of the system were taken on the spot. While speaking on the occasion, the Chief Secretary highly appreciated the efforts of the Home and Tribal Affairs Department which was the need of the hour and emphasised on continuous efforts for bringing more improvement in the system in order to enable the government for quick response for maintenance of law and order along with the provision of weekly, fortnightly, monthly and yearly data analysis on any issue. He also appreciated the installation of solar energy system in the Home and Tribal Affairs Department and said that now the electricity supply would be available round-the-clock in the Home Department. He said that such a system should also be introduced in other departments of the provincial government, which will go a long way to overcome energy crisis and on the other hand it will also enhance the overall performance of the officials without losing any more time during the load shadings. Besides others, Additional Chief Secretary Planning and Development Attaullah Khan, Secretary Finance Sahibzada Saeed Ahmad, Secretary Information, Azmat Hanif Orakzai, Secretary Home and Tribal Affairs Department, Muhammad Azam Khan, Secretary Establishment Department, Arbab Shah Rukh Khan, Secretary High Education, Ms Farah Hamid, Secretary Administration, Hifzur Rehman, Special Secretary Home, Syed Alamgir Shah, Additional Inspector General of Police, Special Branch, Akhtar Ali Khan, Additional Inspector General of Police Investigation, Liaqat Ali Khan, Inspector General of Prisons, Khalid Abbas and other high ranking officials were also present on the occasion.

Copyright Business Recorder, 2013

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Government decides to start 7,100 megawatts Bunji hydropower project

The government on Wednesday decided to start 7,100MW Bunji hydro-power project in the public sector, in addition to allowing Private Power Infrastructure Board (PPIB) to execute direct agreements with lenders as banks take extra time in processing IPPs. These key decisions were taken by the PPIB Board in its meeting presided over by the Minister for Water and Power, Ahmad Mukhtar. Mukhtar, however, exaggerated the performance of PPP government by stating that his government at the end of its current tenure will pass on a much better electricity situation to the next government than what it had inherited from the preceding government. Cynics maintain that the Minister is perhaps unaware of on ground power supply situation as rural areas are facing at least 15 hours of unscheduled load shedding every day. The Minister claimed that during the government''s five year tenure, it took important decisions for new projects and made the procedures easy and investor-friendly. He further said that serious work has been initiated for generating power through bagasse and furthermore power generation through wind and hydro resources has got a boost during the tenure of the current government thus paving the way for enhanced reliance on wind power in the future. Managing Director Private Power and Infrastructure Board (PPIB) highlighted PPIB''s initiatives to tackle the power situation prevailing in the country. He said that with reference to indigenous resources, PPIB has undertaken fifteen hydropower projects of around 6,500 MW power generation capacity in different locations of the country, some of which are at an advanced stage of completion. The meeting decided to execute 7,100MW Bunji Hydropower Project by Wapda which will soon start studies on development of infrastructure, ie transmission lines, access roads, land acquisition etc. It was also decided with consensus of Punjab and AJ&K governments that PPIB shall develop 590MW Mahl Hydropower Project in the private sector. In order to facilitate and reduce the processing time for IPPs in obtaining working capital financing from banks, the Board approved the execution of direct agreement by PPIB with working capital lenders. To encourage cheaper coal based power generation, the Board approved procedures for development of private power projects under upfront tariff. This will standardise and reduce the approval time once Nepra announces tariff for coal based projects. The minister appreciated the efforts of PPIB for its efforts to bring in power from the private sector and remarked that 2530MW have been added to the national grid in the last five years. Power sector experts maintain that the performance of Ahmad Mukhtar was a poor and his key focus was on administrative matters instead of operational issues. He changed at least two Secretaries, ie Zafar Mehmood and Ms Nargis Sethi because they wanted to bring some basic changes to deal with the corrupt system but they failed to execute their proposals because of an effective corrupt mafia in the power sector, especially in Discos. The meeting was attended by Additional Secretary Ministry of Finance, Additional Secretary Ministry of Petroleum and Natural Resources, Member (Water) Wapda, Secretary Energy Government of Khyber Pakhtunkhwa, Secretary Electricity Government of Azad Jammu and Kashmir, Additional Secretary Energy Department, Government of Punjab, Additional Secretary Energy Department, Government of Sindh, representatives from Planning Commission, Fata and private sector member from Khyber Pakhtunkhwa besides Executives Directors and Directors of PPIB and other senior government officials.

Copyright Business Recorder, 2013

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4,500 megawatts of electricity to be generated: Asim

Advisor to the Prime Minister on Petroleum and Natural Resources Dr Asim Hussain on Monday said that construction of Iran-Pakistan (IP) gas pipeline would provide job opportunities to an estimated 10,000 people in Pakistan, adding that the gas transported through the pipeline would help generate about 4,500 megawatts of electricity. He was talking to media persons on the occasion of groundbreaking ceremony of IP gas pipeline held at Gabd Zero Point on the border from where the Pakistan section of the IP gas pipeline starts.

Copyright Business Recorder, 2013

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Wapda completes rehabilitation of Tarbela power station

With financial assistance of the United States Agency for International Development (USAID), the Pakistan Water and Power Development Authority (Wapda) has successfully completed first phase of the rehabilitation of Tarbela Hydel Power Station, restoring 128 megawatt (MW) electricity to the system. This was stated by Wapda Chairman Syed Raghib Shah while briefing the US Ambassador Richard Olson during his visit to Tarbela Power Station. "We appreciate the support of the United States to the energy sector in Pakistan. Projects like these will help minimise power shortages in the country," he said. Dilating upon the two-pronged strategy for optimal utilisation of hydel resource, the Chairman said that Wapda was not only constructing the new projects but also rehabilitating and up-grading its aging power houses. Besides adding a good quantum of electricity to the system to cater for increasing demand, Wapda projects will also help provide cheap electricity to the people, he added. During his visit Ambassador Olson said, "US understands that Pakistan is facing an energy crisis and we are committed to doing our part. The work completed here at Tarbela contributes enough electricity to supply to two million customers, and helps provide relief to those suffering from extensive power shortages." To restore electricity generation at Tarbela, the USAID provided $16.5 million to Wapda to repair three power generation units and to train staff to operate the upgraded equipment. Relieving Pakistan's energy crisis is a top priority for US assistance to Pakistan. In addition to Tarbela, the US is also funding other high impact projects in hydropower sector, such as rehabilitation of the Mangla Power Station. The US Government is also co-financing the completion of Gomal Zam and Satpara dams which will add more 35MW electricity and irrigate more than 200,000 acres of land.

Copyright Business Recorder, 2013

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Tameer Energy, Planetary Power to offer low-cost energy solutions

An international energy solutions company is gearing up to help the Pakistani business community by offering latest and low cost energy solutions. Saeed Zuberi, CEO of Tameer Energy, a group company of Tameer Foundation, said that his company intended to introduce state-of-the-art technology developed by NASA engineers. Saeed, who was accompanied by Angus Jackson OBE, Director Planetary Power, visited the FPCCI office here on Sunday on the invitation of Tariq Sayeed, VP CACCI, where they addressed the business community. "The technology has not been employed anywhere in the world which I want to introduce in collaboration with Planetary Power Incorp, a US-based company working on cutting-edge technology in the energy sector," Saeed said. VP FPCCI Mirza Abdul Rehman, President ICCI Zafar Bakhtawari, Presidents and office-bearers of other chambers including Raja Zaheer, Ch Pervez Waraich, Malik Zubair Ahmed, Shahid-ur-Rehman, Munawar Mughal, Tariq Mehmood, Malik Sohail, Chairman Media and Diplomatic Affairs FPCCI and others were also present on the occasion. Tameer Energy was also represented by AVP Imran Ahmed and CTO Syed Fahim. Saeed Zuberi has worked intensively in the social and infrastructure sectors of Pakistan. Among other projects, Tameer Foundation is credited with its reconstruction efforts after the floods of 2010 and 2011. Seed said that with the right technology solar energy was easy to capture and use. "Our ability to harness the sun's energy is crucial for our civilisation's survival as well as current and future prosperity. Our hybrid technology is highly dependable which can cut electricity and maintenance costs by 50 percent while it can be monitored and controlled through satellite, landline or a mobile phone," he added. He said that ultra-modern diesel and solar-powered electricity generation units could be installed in villages with no access to national power grid and small businesses which are easily upgradeable. He further said that he had detailed meetings with the energy officials of the federal and provincial governments whose response was encouraging. Speaking on the occasion, Angus Jackson OBE said that "we would like to use Pakistan as a production hub for our company's units workable with any fuel and at any altitude, which will not only help masses overcome energy issues but would also initiate exports to regional markets."

Copyright Business Recorder, 2013

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Prime Minister urges South Korean businessmen to invest in energy sector

Prime Minister Raja Pervez Ashraf on Thursday invited the Korean businessmen to invest in Pakistan's power and energy sectors. Talking to a delegation of Korean investors who called on him at the PM's House, the Prime Minister said Pakistan's natural resources, trained and dynamic workforce and a growing market presented a huge opportunity to foreign investors. The Prime Minister said that Pakistan attached great importance to its relations with Republic of Korea and looked forward to further deepening the multifaceted ties. He lauded the hard work of Korean people, which he said had transformed their country into one of the leading economies of the world. He said the business community of Korea deserved compliments for putting their country among the most developed countries of the world. He expressed hope that Pakistani businessmen would benefit from their Korean counterparts and learn business management, techniques and processes to put Pakistan on the trajectory of sustainable economic development. He congratulated the Korean people on the elections of Madam Park Geun-hye, as the first woman President of their country and expressed hope that she would steer the country to greater glory and prosperity. He mentioned Shaheed Mohtrama Benazir Bhutto who was the first woman to become head of the government in the Muslim world and the first woman Prime Minister of Pakistan. He said there was a political consensus in Pakistan on pursuing liberal economic policies in the country and added that the investment policies of the present government allow 100 per cent ownership and repatriation of capital and profit to foreign investors. The Prime Minister expressed satisfaction that the bilateral trade between the two countries had steadily increased. In 1983, the bilateral trade was 94 million dollars, which in 2011 crossed the 1.5 billion dollars mark. Speaking on the occasion, Kim Chang Gyou, Sr. MD Lotte Chemical Corporation who was leading the delegation thanked the Prime Minister for inviting them to Prime Minister's House. He said the delegation was visiting Pakistan in wake of the successful visit of President Asif Ali Zardari to Republic of Korea last year. He said the leading investors from Korea were visiting Pakistan to explore new vistas of investment in the country and they were keen to explore avenues of investments in Pakistan. Kim Chang Gyou expressed the confidence that government of Pakistan would extend all possible support to the potential investors in their endeavours to start businesses in Pakistan.

Copyright Associated Press of Pakistan, 2013

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Power to be imported from four countries

Pakistan will import 2,600 megawatts of electricity from Iran, Tajikistan, Kyrgyzstan and India in a bid to overcome power shortages, Minister for Water and Power Chaudhry Ahmed Mukhtar told the National Assembly on Friday. Giving the break-up in this regard, the Minister told the lower house of parliament that the government would import 1,000MW from Iran, 1,000MW from Tajikistan and Kyrgyzstan and 500MW from India. He said that negotiations on tariffs were under way. Pakistan is already importing electricity from Iran in the Makran Division, including Gwadar, Turbat, Panjgur, Mand and adjoining areas. The imported electricity made Makran division free of load-shedding. The supply had been increased from 35MW to 70MW. Answering another question, the Minister said that Wapda had launched no solar power project. However, he said that solar energy was cheaper than the electricity produced via diesel-run generators. He said that Ministry of Water and Power, in consultation with the Alternative Energy Development Board (AEDB), recommended replacing diesel generators with solar panels during day time and for other off grid applications. He said that currently, there were three factories assembling solar panels in the country, including Akhtar Solar, Islamabad, PV Silicon Technologies (Pvt) Ltd, Raiwand Road, Bhubtian, Lahore, Sara Solar (Pvt) Ltd, Industrial Area, Karachi. Answering another question about the construction of Kalabagh dam, the Minister said that the dam could yield a direct annual benefit of Rs 60 billion through irrigation, power generation and flood alleviation. He said that indirectly, it would boost industrial and food production, besides providing additional employment opportunities. He said that Kalabagh dam would generate an average of 11,400 million KWh annually. He said that average power benefits were estimated at Rs 46 billion per annum. He said that the dam could have saved the country as much as $43 billion in the 2010 floods. He said that after completion, Kalabagh dam would add 3,600MW electricity to the national grid.

Copyright Business Recorder, 2013

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Coal reserves to be tapped for meeting energy crisis: Shahbaz

Punjab Chief Minister Shahbaz Sharif has said that there are large reserves of coal in the Salt Range of Punjab, which can be developed in a scientific manner and utilised for energy purposes. He said the wheel of economy is slow due to energy crisis while electricity can be generated by utilising these coal reserves. He directed that recommendations should be submitted within seven days for development of mining areas. Chief Minister Shahbaz Sharif was presiding over a high level meeting to review the measures for benefiting from coal reserves, at Model Town Thursday. The meeting was attended by Principal Consultant of Australian company SNOWDEN Ross Bradley, Grant Vane Heerden, Business Development Manager of Australian Trade Commission Punjab Imran Saeed, Provincial Minister for Mines and Minerals Chaudhry Abdul Ghafoor, Chairman Punjab Mineral Company Mian Muhammad Mansha, Vice Chancellor Punjab University, Chairman Planning and Development, secretaries of finance, energy, mines, DG Mines and others concerned. The Australian consultant gave the Chief Minister a detailed briefing on drilling and data collection at Salt Range. Addressing the meeting, Shahbaz Sharif said that there is a need to further improve the mining sector at national level and new courses and training should be introduced at mining school. He said, "we can utilise our natural resources in an effective manner by adopting modern methods of mining". He directed authorities concerned to utilise modern machinery for excavating coal in the Salt Range, besides developing mining areas on scientific lines. Shahbaz said that Pakistan is full of natural resources and energy crisis can be overcome by utilising these natural resources effectively. He said large reserves of coal are found in Salt Range of Punjab for which mining industry would have to be promoted on modern lines. Meanwhile, an MoU was signed between Punjab government, Punjab University and UET for increasing co-operation in mineral development sector. The MoU was signed on behalf of Punjab government by Secretary Mines and Minerals while Vice Chancellors of Punjab University and UET signed on behalf of their respective institutions. Shahbaz Sharif, Provincial Minister for Mines, Chairman Planning and Development and Secretary Finance were also present on the occasion. According to MoU, Punjab government, PU and UET will work jointly for mineral development. According to MoU, all signatories would extend co-operation to each other for geological sciences, coal technology, mining and development other projects. Punjab government and teachers, experts, students and authorities of other departments would jointly work on mining projects, besides capacity-building with regard to mineral development.

Copyright Business Recorder, 2013

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30 megawatts wind power project to be set up near Thatta

At a time when local and foreign investors are shying away from investing in new projects because of uncertain domestic economic and security situation, the establishment of Tapal Wind Energy project at Jhimpir in Thatta district by a group of forward looking entrepreneurs is creditable. A conglomerate of three leading business houses, namely Tapal Group, Akhtar Group and Ismail Group, defying all odds have come forward to set up a 30MW wind power project on 200 acres of land. The project will be completed in 12 to 15 months. Leading companies of China, i.e. M/S Hydrochina and Goldwind WTGS are project contractors. Feasibility study has been submitted to AEDB for approval. The three sponsors have executed the mandate with National Bank of Pakistan for arrangement of project debt. To highlight project details, a presentation session was organised by Tapal Group, Akhtar Group and Ismail Group jointly at a local hotel here on Thursday. Asad Iqbal, Director Ismail Power welcomed local and foreigner guests present on the occasion. Later, he invited Mutafa Tapal to give presentation about Tapal wind project. Mutafa Tapal, Director Tapal Wind, elaborated the project, its coast, partners, contractors, land and targeted generation of wind electricity from this project. He also threw light on the brief profiles of the said three groups including Tapal, Ismail and Akhtar with their achievements in power and other specific sectors. Later, representatives from two Chinese companies including HydroChina and GoldWind WTGs gave presentation about their companies, field of operations and achievements world-wide. On the occasion, Zubair Motiwala Advisor to Chief Minister Sindh and Chairman Sindh Board of Investment (SBI) said that Government of Pakistan has timely initiated work on wind power sector and Sindh government is also seriously taking steps for the generation of electricity from this particular sector. He said that Sindh government has planned 32 wind power projects having a capacity of 10 to 500MW which are in-line and work is in progress to make them operative. He said that China and Pakistan are best friends and we can't forget special support of Chinese government and its companies in establishment of wind power projects @ Jhimpir area of Sindh province. "SBI is taking serious efforts to boost up wind energy sector, we took up matter of wind electricity tariff with the Prime Minister and the Cabinet gave approval of sustaining the current tariff for next two years", he said. Zubair said that our previous target was to generate 5,700MW electricity from wind energy but now we are thinking to increase this at 6,200MW. All stakeholders should support us to achieve this, he insisted. In the end, Adnan Tapal, Chief Operating Officer (COO) Tapal Wind wound up the event by thanking all the participation for making the event purposeful.

Copyright Business Recorder, 2013

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Sweden offers green energy solutions to Pakistan

A number of energy-generating companies from the public and private sector of Sweden are willing to offer renewable energy solutions to the energy-starved Pakistan. "I am overwhelmed by the great interest shown by the participants here in different Swedish energy-related technologies," Swedish Ambassador to Pakistan Lars-Hjalmar Wide told reporters here at a seminar on "The Case for Swedish renewable energy in Pakistan" on Thursday. Bashir Ali Mohammad, the honorary consul general of Sweden, Charlotte Kalin, CEO of Chamber Trade Sweden (CTS), Yawar Mian of Capital Business Sweden (CBS) and Jonas Rottorp of Swedish Environmental Research Institute (IVL attended the event. Terming the event as a first step in the right direction, the Swedish envoy said next step would be the arrival of Swedish businessmen in Pakistan to look for ways and means to jointly work with the local stakeholders in the energy sector. "The core of this is to promote business-to-business co-operation, "Wide said adding such initiatives would certainly lead to a significant growth in bilateral trade between Sweden and Pakistan which stands in the former's favour at 300 million euros. Also, he said, his country was in contact with local stakeholders for the export of mangoes and other agricultural products. "This, however, would take some time to materialise," the ambassador said. "The European Union is working on a five-year engagement plan for Pakistan to engage the country on issues of mutual interest ranging from trade relations to joint counter-terrorism efforts," Wide said. Honorary Consul General of Sweden Bashir Ali Mohammad dubbed the Pak-Swedish future joint ventures as much helpful for Pakistan's energy needs saying the Swedish had the required know-how and finances to share with Pakistan. "The ball now is in our court whether or not we avail this opportunity," Mohammad said. He said Karachi had a great potential for energy production using the Swedish green technology. "We have a big Slaughter House in Landhi (Karachi), cattle farms and a vast meat industry that provides a natural potential," said the honorary consul general. He said the Swedish side had completed their first round and would now as a second step come back on a weeklong visit to Pakistan to visit local industries to see how the waste can be capitalised on. Charlotte Kalin of CTS spoke about the new role of chambers of commerce and industries and business organisations to make trade and development sustainable between the nation states. She underlined various opportunities for promoting bilateral trade between the two countries and how CTS could facilitate Pakistani firms to find partners, customers and new markets in Sweden and Scandinavia. Jonas Rottorp of Swedish Environmental Research Institute (IVL) gave a presentation in which he talked at length about various case studies of key Swedish green technology expertise areas and the successful hi-tech ventures thereof and their benefit for other countries. Yawar Mian of CBS told the audience how the energy-starved Pakistan could benefit from Swedish technologically-advanced experiences to bridge the ever-widening gap between supply and demand in the country.

Copyright Business Recorder, 2013

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SSGC inks MoUs with eight reputable organisations

SSGC created a record of sorts on March 27, 2013 when Memorandums of Understandings were signed and exchanged with eight reputable and renowned educational institutions and NGOs out of eleven such organizations that would be benefiting from the gas utility's CSR initiatives during FY 2012-13. Zuhair Siddiqui, MD, SSGC exchanged MoU documents with the representatives of the collaborative partner organisations, that included, The Citizens Foundation, NED University, Institute of Business Management, Family Educational Services Foundation, Omair Sana Foundation, Dowites-78 Operations, Thardeep Rural Development Programme and Indus Resource Centre in an elegant and well attended ceremony organised on March 27, 2013 by the Company's Corporate Communication Department at the Head Office auditorium. Yusuf J. Ansari, SGM (Corporate and Legal Affairs) and Nasreen Hussain, Dy. General Manager (Corporate Communications) were also seated on stage to witness the exchange of MoUs. Apart from the above mentioned organisations, SSGC also previously inked MoUs with Sukkur IBA, Balochistan University of IT, Engineering and Management Sciences, Quetta and Forman Christian College, Lahore to supplement the scholarship programmes for their deserving and meritorious students. The officials of these institutions, however, could not make it to this signing ceremony. In his welcome speech, SGM (Corporate and Legal Affairs) reiterated that the management was pleased to note that while the Company has been collaborating in its CSR efforts with some well established names, this year it has also partnered for the first time with organisations such as Dowites-78 Operations and Thardeep Rural Development to help achieve their health and community development objectives. In his keynote address, Zuhair Siddiqui, MD, SSGC said that education is a panacea for all the problems that the country is faced with. This explains why SSGC in its CSR initiatives focuses largely on supplementing educational efforts of other organisations-PR

Copyright Business Recorder, 2013

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PPL undertakes oil, gas exploration work in Iraq

Pakistan Petroleum Limited (PPL) has formally undertaken development and exploration of gas fields in Diyala and Wasit provinces of Iraq, after winning the contract last year. The initial contract to this effect has already been approved by the Iraqi Council of Ministers. The fields are spread over areas of 6,000 sq kms. The winning bid was a major success for PPL, and it has become the first-ever public sector company of Pakistan to enter into international exploration and production, said Pakistan ambassador to Iraq Shah M Jamal, while talking with the visiting media delegation here Tuesday. The contract won by PPL is basically a service contract on which $5.38 per barrel of oil eventually extricated would be paid by the government of Iraq. The PPL has also worked out the price of crude oil and condensate with gas to incorporate it in the contract. Now, the project is going through implementation process, he added. Ambassador Jamal further said, the contract paved the way for Pakistani investment of approximately $100 million in the development of gas fields and export of Pakistani skilled and unskilled manpower to Iraq oil sector. He said there are bright prospects for other Pakistan companies to come to Iraq for finding investment opportunities and to develop more and more economic collaboration between the two countries. Pakistani businessmen need to explore here the available opportunities to run their businesses in various fields such as health and education on long-term basis, he added. The Iraqi government has already assured its all-out support to Pakistani entrepreneurs for undertaking joint ventures with their Iraqi counterparts. The ambassador said bilateral trade between the two countries is also showing upward trend and it is heavily in favour of Pakistan.

Copyright Independent News Pakistan, 2013

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Hascol Shikarpur begins operations

The inauguration ceremony of Hascol's Shikarpur installation was held on March 17 by Oil & Gas Regulatory Authority (Ogra) Vice Chairman Sabar Hussain. Hascol is the fourth oil marketing company to have commenced operations at its state-of-the-art oil installation, connected to the Papco white oil pipeline system, in Shikarpur. Also present at the occasion were President Summit Bank Husain Lawai, Hascol Petroleum Ltd Chairman Mumtaz Hasan Khan, Hascol Petroleum Ltd COO Saleem Butt, Director Logistic & Marketing Ministry of Petroleum & Natural Resource Abdul H Baloch, Executive Director Oil Sarmad Aslam, President First Women Bank Shahida Javed, Joint Executive Director Finance Ogra Atif Sajjad and Group Head Cooperate & Investment Banking, Summit Bank Ahsan Durrani. While welcoming the guests, the Hascol Chairman announced that Hascol's storage facility in Machike (near Lahore) will also be ready in six months. This will make Hascol the only Oil Marketing Company besides the established three viz PSO, Shell, Chevron, to have two oil installations in locations outside Karachi. This will give a great boost to the supply and distribution model of Hascol.-PR

Copyright Business Recorder, 2013

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Khyber Pakhtunkhwa Governor launches natural gas project in F R Kohat

Khyber Pakhtunkhwa Governor, Engineer Shaukatullah, while launching natural gas project, costing Rs 76.468 million at Darra Adam Khal in F R Kohat on Saturday, has also announced to establish an industrial estate in the area. The 17-kilometre long main pipeline laying project for the supply of natural gas on completion within next couple of months besides offering 50 commercial will also provide 3,500 domestic connections to a population of about 45,000 of the area. He also announced to expedite efforts for establishment of a grid station, besides exploring possibility for launching socio-economic uplift project in the area that included upgradation of a historic high school at Zarghunkhel; working since pre-partition era. The Governor was accompanied by his Principal Secretary Mohammad Abid Majeed and Secretary Social Sector, Fata, Aftab Akbar Durrani besides Commissioner of Kohat, Sahibzada Muhammad Anis and Deputy Commissioner of Kohat, Saadat Hassan who also acts as Political Agent for the region, Ex-Federal Minister, Senator Abdul Razzaq, ex-parliamentarians Haji Noor Sher Afridi and Haji Baz Gul Afridi were also present on this occasion. The Governor also conveyed good wishes on behalf of President of Pakistan Asif Ali Zardari through the tribal elders of F R Kohat to all the tribal people of frontier regions and the tribal agencies and said "before coming to launch this first project of its nature in Fata, he had met him to discuss development programmes meant for Fata in future." Initiation of gas supply project coupled with commitment for establishment of an industrial estate in the area would lead to launch of more projects of similar nature in rest of Fata in a gradual way, he remarked.

Copyright Business Recorder, 2013

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Iran gas pipeline good omen for peace, cooperation: Hina

Foreign Minister Hina Rabbani Khar on Thursday declared that the recent launch of Iran-Pakistan gas pipeline project will be a good omen for peace and co-operation, and made it clear that the only force that defines the country's foreign policy is the national interest. Addressing her last press conference as the country's foreign minister, she said: "The (Iran gas pipeline) project is certainly in Pakistan's national interest should not be portrayed as hostile to any other country or any region or any other entity abroad... Pursuing national interest should not necessarily be defined by hostility towards any other country. So, the pressure that defines a country's foreign policy is the national interest," she said, adding that there was nobody to convince her that Pakistan should not go for a cheaper and quickest source of gas. Currently, she pointed out that 50 percent of the industries do not have the gas because of the shortage. "Now can we allow our GDP to dwindle away...? Or can we allow our export to continue to suffer...?", she asked, adding that Pakistan will pursue what it considers in its best interest. She said that Pakistan was also working on all other options to cope with the energy crisis. She said relations with Iran are extremely important for Pakistan and the recent launch of IP will be a harbinger of good news for peace and co-operation. Khar said that she did not see that the next government will face difficulties with the US or any other country because of the project. At the same time, she pointed out that Pak-US relations are extremely important and Pakistan considers the US as its best friend and will continue to have a strong relation with it. She said that the engagement with the US was guided by Parliament and is based on mutual respect, adding that both the countries recognise each other's importance and have complete alignment of interests in Afghanistan. To a question, she said as the ROZs did not happen and now Pakistan was hopeful to have preferential market access to its products in the US market, adding that US Secretary of State John Kerry was also a strong supporter of greater market access. Khar also referred to initiation of strategic dialogue with Gulf Co-operation Council (GCC) countries and focus on improving economic ties with the Russian Federation. She hoped that the European Union would grant GSP Plus status to Pakistan in the beginning of next year, which will give boost to the exports of Pakistan. To a question regarding the involvement of the military establishment in the country's foreign policy, she said that military has no constitutional role and it is consulted for its input on issues relating to security and defence. Giving an overview of the challenges confronted in the domain of foreign policy during the last five years and how they were dealt with and converted into major opportunities, she said that the democratic government pursued a proactive foreign policy focusing on region and taking decisions purely in national interests. She maintained that the foreign policy was driven by confidence rather than fear and the parliament provided guidelines for intensive engagement with the world. She said the priority of the foreign policy has been to provide peaceful and stable regional environment so that people could concentrate not on borders‚ disputes and animosity but on internal growth and stability. In the regional context‚ she pointed out that China has been our strategic ally and the present government focused on transferring politically strong relations into economically strong ties. In this regard‚ she particularly referred to historic Gwadar Port agreement‚ Chinese investment in energy and infrastructure projects and President Asif Ali Zardari's 9 visits to China. About India‚ Khar said the leadership decided to start investing in friendship and trust building instead of traditional hostility and animosity that the two countries witnessed in the past. She said many steps including improvement of trade relations were taken to build trust. To a question, she acknowledged that there were disappointments vis-à-vis relations with India including unfortunate and hostile statements that emanated from that country on cross-LoC incidents. The Foreign Minister said Pakistan wants resolution of Kashmir dispute but pointed out that there was not required level of trust at the moment for resolution of the issue through dialogue. She said Pakistan is willing to work on Sir Creek and then Prime Ministers Benazir Bhutto and Rajiv Gandhi were close to agreement on Siachin but the progress was later marred. About Afghanistan, she said the democratic government demonstrated its commitment to have relations with Afghanistan on the basis of sovereign equality and this context Pakistan considers Kabul is the most important capital for it. "We aspire for no role in Afghanistan than to facilitate Afghan people on the course chosen by them for peace and reconciliation", she added. Responding a query, she said on the desire of Pakistan‚ Afghanistan conveyed in black and white that it wanted co-operation of Pakistan in direct talks with Taliban‚ holding of Ulema conference‚ safe passage for Taliban that wish to travel for peaceful purpose and release of all Taliban prisoners. She said Pakistan accepted all the demands and started responding positively immediately.

Copyright Business Recorder, 2013

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MOL buys into Ghauri exploration block in Pakistan

Hungarian oil group MOL said it had agreed with Mari Petroleum Company Limited (MPCL) to buy a 30 percent stake in the Ghauri exploration block in Pakistan. MOL also agreed to buy a 25 percent stake in the 43B block in Oman, becoming full owner of that block. If Pakistan''s government approves the deal, MOL will co-own the Ghauri block with MPCL and Pakistan Petroleum Limited, with the latter both having 35 percent stakes. "This increases MOL''s presence in both Pakistan, where we had great success in the Tal block and in Oman, one of the main strategic target areas of MOL Group," said MOL chief executive Jozsef Molnar. The Ghauri block is in the first exploration phase and the consortium intends to drill the first exploration well this year.

Copyright Reuters, 2013

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OGDCL, PPL to begin exploration in Sudan

Pakistan''s two leading oil and gas exploration companies - Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) are to start exploration and production activities in Sudan. This was stated by Dr Asim Hussain Advisor to the Prime Minister on Petroleum & Natural Resources and Awad Ahmed Algeez, Minister of Petroleum Government of Sudan, here the other day. A high-level Sudanese delegation visited OGDCL and was welcomed by Dr Asim. The minister said that within next two weeks a high-level delegation of PPL and OGDCL will visit Sudan in this regard. Sudan is one of the promising highly prospective countries having huge potential in oil and gas sector and Pakistan was keen to acquire blocks in Sudan, Asim said. He said PPL has already acquired exploration block in Iraq and wanted to expand its operation to other parts of the world. Further, there exist a number of joint venture opportunities, which can both be materialised by OGDCL and PPL jointly. Likewise, Sudan can also explore possibilities of farm-in in blocks owned and operated by OGDCL and PPL. Briefing the meeting, Mahir Khalil, Manager (Exploration) gave a comprehensive presentation on the oil and gas sector in Sudan with specific reference to the available blocks for farm-in. He stressed that there is a lot of potential in Sudan and a number of international E&P companies are already working in Sudan. He further elaborated that the current oil production of Sudan stood at 145,000 BPD and has further growth potential. Masood Siddiqui, MD OGDCL gave a short and crisp presentation on overall OGDCL activities in Pakistan. He also showed OGDCL commitment in seeking international joint venture opportunities. It was decided that in the first phase, one exploration manager each from OGDCL and PPL will accompany the team to Sudan to examine joint venture opportunities presently available. In the second phase, commercial and technical professionals will visit Sudan for further exploring possibilities of business development opportunities. The advisor thanked the Sudanese delegation for taking interest in Pakistan and assured that Pakistan will do its utmost to help Sudan in the oil and gas sector. Dr Asim presented shields and traditional Pakistani gifts to the members of visiting delegation. Meanwhile, Dr Asim Hussain and Awad Ahmed Algeez inaugurated OGDCL Institute of Science & Technology (OIST). The ceremony was graced by Alshafi Ahmed Ambassador of Sudan in Pakistan, Vice Chancellor of Quaid-e-Azam University Dr Masoom Yasinzai, and Masood Siddiqui MD/CEO OGDCL and Chief Executives of other E&P companies. The institute is starting an MS Petroleum Engineering Programme and Geosciences soon. Oil & Gas Training Institute of OGDCL is a premier institute of petroleum industry in the country, which was established in 1979 with technical assistance from Canadian International Development Agency and now upgraded for higher education and training. The institute has been elevated to a degree awarding institute through affiliation with Quaid-e-Azam University Islamabad and renamed as OGDCL Institute of Science & Technology (OIST). Dr Asim advised professionals from OGDCL and PPL to embark on joint venture projects in Sudan on a fast track basis. He said Pakistan is looking forward to training professionals from Sudan at the Oil and Gas Training Institute (OGTI) in the fields of Petroleum Engineering and Exploration, as an MS degree programme in Petroleum Engineering will shortly be started by the institute. He invited Sudan''s Minister for Petroleum & Natural Resources to present the business development opportunities in the oil and gas sector of Sudan.

Copyright Business Recorder, 2013

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LNG to be imported from Qatar: Asim

Pakistan is all set to import a huge quantity of Liquefied Natural Gas (LNG) annually from Qatar on government-to-government agreement basis, said Dr Asim Hussain, Advisor to the Prime Minister on Petroleum and Natural Resources. He was briefing the media on the achievements made by the incumbent government, here on Tuesday. Dr Asim said that the ministry of petroleum was going to move a summary on Wednesday (today) regarding the import of LNG from Qatar. He said that the government was going to import LNG from Qatar on government-to-government agreement basis after it was stopped by the court to go ahead with the LNG import project. He disclosed that the Qatar government had agreed to reduce the commodity price and Pakistan would import 200 million tons of LNG annually from the country. To finance the imported gas projects, the government had imposed Gas Infrastructure Development Cess (GIDC) on industrial, fertiliser and CNG sectors, he said, adding that within three years Pakistan would generate sufficient funds to finance these projects through GIDC. He further said that the government was all set to divide gas utilities to minimise losses on account of Unaccounted for Gas and bring reforms in accordance with the international standards. Dr Asim said that to deal with the gas shortage, the government had undertaken numerous steps during the past five years. He said that to expedite oil and gas exploration the government was encouraging E&P companies to undertake offshore exploration. Dr Asim said that the government had notified Petroleum (Exploration and Production) Policy 2012, which offered a maximum price of $6.5 per million British Thermal Units (mmbtu) for onshore and a maximum of $9 per mmbtu for offshore oil and gas discoveries. He was of the view that in order to overcome the energy crisis, the country needed to undertake Iran-Pakistan (IP), Turkmenistan-Afghanistan-Pakistan-India (TAPI), Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG) air-mix projects. He said that the government would soon sign an agreement with Iranian government for setting up a modern and the biggest oil refinery in the country with daily refining capacity of 0.4 million barrels. The government had asked the local refineries to upgrade their units as per international standards and by the end of 2015 only Euro-II standard diesel would be allowed in the country, he added. He further said that to upgrade the local refining units an estimated cost of $2.4 billion was projected of which 20 percent would be borne by the government. Dr Asim said that the government had decided in principle to break up the Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC) to minimise the UFG and bring the latest reforms in the gas distribution system. He said that to resolve the ever-increasing gas prices of fertiliser in the country, the government had arranged provision of gas to fertiliser plants from gas fields directly, which would help reduce farm products prices, besides increasing the produce. Dr Asim said that at present the government was unable to restore seven days a week gas supply to CNG stations.

Copyright Business Recorder, 2013

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Khyber Pakhtunkhwa Oil & Gas Company begins operations

The Khyber Pakhtunkhwa Oil and Gas Company Limited (KPOGCL) on Monday formally went into operation holding inaugural meeting of the Board of Directors with Chairman, Chief Minister Amir Haider Khan Hoti in the chair. Addressing the participants of the meeting, the Chief Minister said the establishment of KPOGCL was a landmark achievement of the provincial government, which would pave ways for the progress and prosperity of the province. He said it would help make the province self-sufficient in the production of oil and gas; and as such overcome the acute shortage of energy not only in the province but in the country as well. The meeting unanimously approved the constitution of human resource committee, technical committee, audit committee and finance committee for the company; and decided that member of that committee would be from among the board of directors of the company. The meeting, besides the financial matter of the company, discussed in detail matters related to the appointment of chief executive officer, executive directors, secretary and other staff of the company, its registration with Pakistan Petroleum Exploration and Production Companies Association and other issues; and important decisions were taken to these effects. The meeting unanimously decided to empower the technical committees of the company in the internal management to ensure the better performance of the company. It also decided to establish the headquarters of the company in Peshawar with the chief executive officer as its head. Senior Provincial Minister for Planning and Development Rahim Dad Khan, Additional Chief Secretary P&D, Secretary Finance, Secretary Energy and Power, Secretary Home and Tribal Affairs, Commissioner Kohat, Vice Chancellor University of Engineering and Technology Peshawar, Rector GIK Institute of Technology and Secretaries, Ex-Managing Director OGDCL, Islamabad, Director National Centre of Excellence in Geology University of Peshawar and other members attended the meeting.

Copyright Business Recorder, 2013

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IP pipeline project: groundbreaking held

The presidents of Iran and Pakistan on Monday inaugurated the construction of a much-delayed section of a $7.5 billion 42-inch diameter gas pipeline linking the two neighbours, Iranian media reported. The project was launched at a ceremony on the Iran-Pakistan border attended by President Mahmoud Ahmadinejad and his Pakistani counterpart Asif Ali Zardari, the reports said. ---- This gas pipeline has nothing to do with the nuclear issue, insists Ahmadinejad ---- World community unaware of regional states'' problems, according to Zardari ---- In Pakistan, stocks close lower, rupee weakens The two leaders jointly unveiled a plaque before shaking hands and offering prayers for the successful conclusion of the project, which involves the laying of a 780 kilometre (485 mile) section of the pipeline on the Pakistani side, expected to cost some $1.5 billion. "The completion of the pipeline is in the interests of peace, security and progress of the two countries ... it will also consolidate the economic, political and security ties of the two nations," they said in a joint statement. Ahmadinejad hailed the fact that work on the new section of pipeline was going ahead despite US sanctions against Iran''s oil and gas sector imposed over its controversial nucleaer programme. "This gas pipeline is a sign of show of resistance against domination," Ahmadinejad said. "There are some nations who are against the progress of people, and so they are using the nuclear issue as a pretext to hinder the progress of the nations." he said. "This pipeline has nothing to do with the nuclear issue, you can not build a nuclear bomb with natural gas," he said, speaking alongside Zardari in comments broadcast live on state television. "This pipeline is peacemaker, so if those countries are not co-operating, then they should not get in the way." Although the pipeline on the Iranian side has almost been completed, Pakistan has run into repeated difficulties, both in financing the project and over the threat of US sanctions. Like the European Union, Washington has slapped crippling unilateral sanctions on Iran over and above UN sanctions imposed over its refusal to suspend uranium enrichment. Iran eventually agreed to finance a third of the costs of the Pakistani part of the pipeline, with the work to be carried out by an Iranian company. Pakistan says it plans to generate 20 percent of its electricity using Iranian gas from the pipeline. The visit was Zardari''s second to Iran in a fortnight and came after officials said a consortium would start work on the pipeline on Pakistani territory despite the US sanctions threat. Analysts said Zardari''s Pakistan People''s Party was likely to seek to exploit its defiance of Washington over the pipeline to boost its popularity ahead of a general election in May. Iran has promised $500 million to help Pakistan with the cost of building its side of the pipeline, but it is unclear whether Islamabad - grappling with a weak economy - will find the remaining $1 billion it needs to complete the work. Iran has the second largest gas reserves in the world, but has been strangled by a Western oil embargo that has seen its crude exports halved in the past year. It currently produces around 600 million cubic metres of gas per day, almost all of which is consumed domestically due to lack of exports. Its only foreign client is Turkey, which buys about 30 million cubic metres of gas per day. India quit the project in 2009, citing costs and security issues, a year after it signed a nuclear deal with Washington. Pakistan has pursued the pipeline scheme as a way of alleviating severe energy shortages that have sparked demonstrations and battered a weak government. At the same time, it badly needs the billions of dollars it receives in US aid. "The Pakistani government wants to show it is willing to take foreign policy decisions that defy the US, particularly when such crucial issues as energy security are at stake," said Anthony Skinner, a director of British-based Maplecroft risks consultancy. "The pipeline not only caters to Pakistan''s energy needs, but also lodges brownie points with the many critics of the US amongst the electorate," he told Reuters. Iran has completed 900 km (560 miles) of pipeline on its side of the border and Iranian contractors will also construct the pipeline in Pakistan, Iran''s national broadcasting network IRIB reported. The two sides hope the pipeline will be complete in time to start delivery of 21.5 million cubic metres of gas per day to Pakistan by December 2014. The project faces security challenges posed by ethnic Baluch militants who have demanded greater control over Baluchistan''s natural resources, and by Iranian Sunni insurgents also based in Pakistan who are fighting for greater rights in Iran. "Having a pipeline running through the region makes it particularly vulnerable to bombings and disruption," said Skinner. "Washington could bolster its support for local elements, causing significant disruption to pipeline infrastructure." President Asif Ali Zardari regarded the Iran-Pakistan gas pipeline project as "very important" for Pakistan. Zardari said the prosperity of Pakistan and Iran was inter-linked and the former was striving to become self-reliant. He said the international community was unaware of the problems of regional countries and was not cognisant of appropriate solutions to many issues. He said the relations between Pakistan and Iran were strengthened through commonality of religion and culture. He said the world peace was correlated with peace in Pakistan and stressed that the country was not against any other state. President Ahmadinejad, in his address terming the gas project a "Peace Pipeline", said it would usher in a new era of prosperity and development for the two countries. "The pipeline is the symbol of determination of the two nations," he said, adding that success was possible through unity of regional states. He said the gas pipeline could be extended to the north of Pakistan as well. He said Pakistan was a great nation with extraordinary talent. He said both Pakistan and Iran needed to stand by each other for the progress of their peoples. He said the gas project was linked with the welfare of masses and categorically added that those who opposed this, had no right to create hurdles in the way. The ceremony was attended by a large number of foreign dignitaries, ministers, members of parliament and political leaders from both the countries. Former Prime Minister Syed Yousuf Raza Gilani and the United Arab Emirates Energy Minister Mohammad Bin Dha''en Al Hameli also attended the event. Federal ministers, including Qamar Zaman Kaira, Makhdoom Amin Fahim, Arbab Alamgir, Mehreen Anwar Raja and Dr Firdous Ashiq Awan, Advisor on Petroleum Resources Dr Asim Hussain and Deputy Speaker National Assembly Faisal Karim Kundi were present. Iranian Minister of Oil Rostam Qasemi and Minister of Industry, Mine and Trade Mehdi Ghazanfari were also present. Pakistan has already brushed aside the foreign pressure regarding the mega project, stating that the project was being commissioned purely to meet its economic needs and being executed by two sovereign states. Earlier, President Zardari on his arrival at the Chabahar Airport in south-eastern province of Sistan, was warmly welcomed by the Iranian President. During a brief meeting prior to the inaugural ceremony of the pipeline, President Zardari and his Iranian counterpart expressed the hope that the project would promote peace, security and progress in both the countries and the region. The two leaders said the project would help enhance economic, political and security ties between Tehran and Islamabad. Tehran-based Tadbir Energy Development Group will undertake all engineering procurement and construction work for the first segment of the project, which starts from the Iran-Pakistan border. The Iranian firm will also carry out the second segment of the project, while the remaining amount is expected to be generated through Pakistan''s Gas Infrastructure Development Cess (GIDC). Reuters adds: Pakistan''s stock market closed lower on Monday after a gas pipeline deal with Iran raised fears the United States would impose sanctions on Islamabad, dealers said. "Across the board selling was witnessed as investors preferred to reduce their exposure before any negative news," said Samar Iqbal of Topline Securities. The Karachi Stock Exchange''s (KSE) benchmark 100-share index ended 2.46 percent, or 441.62 points, lower at 17,522.56 points. The presidents of Iran and Pakistan marked the start of Pakistani construction on a much-delayed gas pipeline on Monday, Iranian media reported, despite US pressure on Islamabad to back out of the project. Oil and Gas Development Company was down 4.01 Percent to 196.70 rupees. Foods and Fertiliser Engro Corporation fell 4.59 percent to 122.11 rupees, while Fauji Fertiliser was down 4.3 percent to 106.99 rupees. In the currency market, the rupee ended weaker at 97.85/97.90 against the dollar, compared to Friday''s close of 97.70/97.75. Overnight rates in the money market rose to 9.40 percent form Friday''s close of 9 percent.

Copyright Associated Press of Pakistan, 2013

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PPL clinches 11 exploration blocks

Aligned with its aggressive exploration programme to optimise production and reserves replenishment of hydrocarbons, the Pakistan Petroleum Limited (PPL) won provisional grant of 11 strategically-fit exploration blocks offered in the latest bidding round held on March 10 at the Directorate General of Petroleum Concessions, Ministry of Petroleum and Natural Resources (MP&NR). The blocks won by PPL are located in Sindh, Punjab and Balochistan. The company has committed a total of 6,445 work units, which translate into a minimum financial obligation of $64.45 million, though actual investment would be significantly higher on discharging the work commitment. To engage a multinational Exploration and Production (E&P) company in the bidding round, the PPL submitted two joint bids with OMV (Pakistan) Exploration GmbH. Notably, the Austrian E&P company will operate one of the two blocks, marking a first in recent years that a multinational E&P has ventured into the country as operator, a move likely to draw more multinationals to the local E&P sector. PPL was instrumental in bringing OMV to Pakistan during the 1989 bid round and has since partnered with the company in successful ventures, including Sawan, Miano, Latif and Tajjal fields.-PR

Copyright Business Recorder, 2013

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A step forward: Pakistan, Iran to sign MoU for oil refinery on March 11

Pakistan and Iran are preparing to sign a memorandum of understanding (MoU) for setting up the country’s largest oil refinery costing $4 billion at the Gwadar Port on March 11, a project that will not only meet Pakistan’s refining needs but will also open avenues for China to get oil supplies. Iran will set up an oil complex at the Gwadar Port, which will have the oil refinery. According to the original plan, Tehran will also lay an oil pipeline from its territory to Gwadar to transport crude oil for processing. “If Pakistan and Iran succeed in completing the oil refinery and the pipeline, it may prompt China to revive its projects of establishing an oil refinery in Gwadar and laying an oil pipeline from Gwadar to western China to get oil supplies,” an official told The Express Tribune. During the tenure of previous government, China had expressed interest in joining the Iran-Pakistan (IP) gas pipeline project, but did not push ahead with the plan following handover of Gwadar Port operations to Singapore Port Authority, the official said. Now that China has taken over operations at the port, it may reinitiate the projects including oil and gas pipelines. According to sources, the oil refinery that will be established by Iran may serve as an alternative to Khalifa refinery, which was planned to be built with the assistance of UAE’s state-run International Petroleum Investment Company (IPIC). The Khalifa project got bogged down after controversy erupted over the extension in tenure of managing director of Pak-Arab Refinery Company (Parco), a joint venture between the governments of Pakistan and UAE’s emirate of Abu Dhabi. Islamabad and Tehran are set to launch the Iran-Pakistan gas pipeline project on March 11 on their border. On the occasion, they will also sign an MoU for setting up the oil refinery. During a trip to Islamabad on February 20, Iranian Oil Minister Rostam Ghasemi had agreed to build Pakistan’s largest refinery at the Gwadar Port with a refining capacity of 400,000 barrels per day in a joint venture with oil marketing giant Pakistan State Oil (PSO). Prime Minister Raja Pervez Ashraf has given the go-ahead to signing the MoU. China’s coastal refinery plan is part of its programme to invest $12 billion in multiple projects in Pakistan. The refinery will have the processing capacity of 60,000 barrels of crude oil per day. Pakistan and China had also considered a feasibility study for the oil pipeline from Gwadar to western China for transporting oil from the Persian Gulf. But the proposal was shelved after Beijing’s refusal to set up the oil refinery, sources said. Former president Pervez Musharraf had also coined the idea of a trade corridor to meet Beijing’s energy needs and offered help for constructing a strategic pipeline from Gwadar to China’s border for supply of oil from Saudi Arabia. China is heavily reliant on oil supply from the Gulf states, which currently comes through a very long route, via the Strait of Malacca. Oil first reaches Shanghai, or the Chinese east coast, and then covers thousands of miles to reach the west of China. However, “the Gwadar refinery can provide a much safer, cheaper and shorter route to the west of China for oil transportation through Karakoram Highway,” a senior official said. So far, the biggest chunk of Chinese investment in Pakistan has gone to development projects in Balochistan including Saindak copper and gold project in Chagai and lead-zinc mining project in Lasbela. “The coastal oil refinery project may also create scores of employment opportunities for the local people,” the official remarked.

Copyright The Express Tribune, 2013

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