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News Headlines for the month of
APRIL 2013

Gomal Zam power house to begin generating 17.4 MW shortly

The 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 and it will start supply electricity to the national grid station shortly. Official sources told APP here that Gomal Zam Dam is the first-ever mega project in water sector constructed in the Federally Administered Tribal Areas (Fata) and the power house was currently on test run. Gomal Zam Dam project located in South Waziristan Agency, consists of three main components including dam, power house 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. They said 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 power house. Another $40 million are also being provided by the USAID for completion of irrigation component of the project and $12 million are committed for development of Waran Canal System.

Copyright Associated Press of Pakistan, 2013

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Linemen safety training programme launched

The USAID Power Distribution Programme in partnership with Peshawar Electric Supply Company (Pesco) launched one of its major interventions with the practical start-up of linemen safety training for Pesco. The overall purpose of this training is to build capacity of Pesco linemen for the implementation of technical projects which will result in loss reduction and increased revenue for Pesco.

Copyright Business Recorder, 2013

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Khyber Pakhtunkhwa governor for installation of solar power systems in Fata

Khyber Pakhtunkhwa Governor, Engineer Shaukatullah has given go ahead signal to take practical initiatives to explore possibility for installation of solar power generation systems in various parts of Fata with at least 10 megawatt electricity at each station. Presiding over a meeting at Governor House, Peshawar on Friday, he said keeping in view the vast gap between supply and demand ration in respect of electricity in FATA in particular, there is a need to opt for solar energy system which offers tremendous opportunities for its development. The meeting which was second of its nature was also attended by certain experts from the private sector enterprises, beside the Chief Executive, Tesco, Parvez Khan Swati, and the senior officials of the FATA Development Authority. Talking on a point, the governor said, spade work has to be initiated without any further delay to get the proposals documentised and approved and cleared from the respective forums. However, he pointed out, one point is very much clear that both demand for electricity and potential of its generation through solar system very much exist in abundance in FATA and this state of affair in itself provides sufficient ground to opt for this system.

Copyright Business Recorder, 2013

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Power sector to get Rs 45 billion, 150mmcfd gas to add 2,700 megawatts

Ministry of Finance and the Ministry of Petroleum would provide Rs 45 billion and 150 mmcfd gas to power sector to add 2,700 MW to the system, which would help reduce power outages by three hours in coming days. This was announced by Advisor to Prime Minister on Finance, Dr Shahid Amjad Chaudhry, Minister for Petroleum Sohail Wajahat Siddiqui and Minister for Water and Power Musadik Malik at a joint media briefing, here on Friday. The Advisor said that Rs 10 billion would be released immediately to the power sector and Rs 35 billion in the next two weeks as short-term measures to reduce loadshedding. He said the Petroleum Ministry has agreed to provide 150 mmcfd gas to power plants, which would add 1,500 MW to the system immediately and another 1,200 MW in next 15 days. Amjad said these recommendations were formulated by a committee constituted by Prime Minister Mir Hazar Khoso and comprising ministers of finance, water and power and petroleum. The recommendations were approved by the Prime Minister on Thursday. He said despite these measures it could not be guaranteed that there would be no loadshedding because of over 4,000 MW gap between generation (9,200 MW) and demand (13,500 MW). Minister for Water and Power said these measures would help reduce by three to three and a half hours loadshedding. He said there is 4,000 tons capacity in the IPPs which require Rs 10 billion monthly to generate 1,100 MW electricity and provision of 150 mmcfd gas by the Ministry of Petroleum would add 800 MW. He said some hydel power generation is also likely to be added to the system following availability of water in a few days. Replying to a question, Secretary Finance Dr Waqar Masood said that power subsidy would not exceed revised target of subsidy on electricity and all this amount was being provided on account of tariff differential which was underestimated in the budget for the outgoing fiscal year. Dr Amjad said the available option with the caretaker government was either to pass on full generation cost to consumers by raising electricity tariff or providing subsidy. He said there was an agreement in the caretaker government that decision to increase tariff is a political decision, which must be left on the next elected government. Minister for Water and Power said caretaker government would leave recommendations for the next government to deal with the problem of circular debt and power generation. He said there is need for fixing the system because it is not sustainable to generate per unit electricity at Rs 14 and sell at Rs 9 per unit. Minister for Petroleum said 150 mmcfd gas would be provided to power sector through adjustment and inefficient captive power plants would face penalty.

Copyright Business Recorder, 2013

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Government to shift resources from public sector generation plants to IPPs

Caretaker Minister for Water and Power Dr Musadik Malik said on Thursday that the government had decided to shift resources from public sector generation plants to efficient Independent Power Producers (IPPs) to ease power loadshedding. Talking to a four-member delegation of USAID led by Jonathan M Conly, who called on him, he requested enhanced co-operation with regard to energy crisis especially in financing of power sector projects and improvement in Discos. He briefed the delegation on the current energy situation and said Pakistan was passing through an energy deficiency regime which was causing huge loss to the national economy. There was unease in cities and towns due to electricity outages. The caretaker government is trying its level best to reduce the crisis and provide relief to the people. "We have identified problems in generation, pilferage, transmission and distribution losses, inefficiency and mismanagement are major causes of the crisis," he added. As a short-term solution to reduce the hours of loadshedding, Ministry of Water and Power has planned to shift the resources from inefficient plants to efficient plants by providing them oil and gas to generate additional 1,000 MW. The government has been asked to provide Rs 150 billion and 150 mmcfd gas to run efficient power plants at capacity. Malik also revealed that allocations of oil and gas would be uploaded on website and made public. Performance guarantee agreements would also be signed with the CEOs of Discos. The Minister observed that construction of dams, run of river hydel projects, coal and alternative energy generation projects were the solution to energy crisis on sustainable basis. The US participation in these projects would ease the situation. Jonathan Conley said United States and Pakistan together were carrying out large-scale energy projects that would add 900 MW of capacity to the power grid by end 2013. These projects include renovating the power plant at the Tarbela Dam, modernising the generators of the Mangla Dam, upgrading the Guddu, Jamshoro and Muzafargarh power plants and construction of Gomal Zam Dam. US technical assistance is also supporting crucial policy and management reforms which are underway in Pakistan''s Ministry of Water and Power. The reforms are focused on reducing technical losses on the power grid and on increasing receivables. A five-year USAID funded programme is already under progress which aimed at improving the performance of Discos in terms of reduction in losses and improvement in revenues and customer services to bring them at par with best global practices, he maintained. Government to shift resources from public sector generation plants to IPPs Jonathan M Conly, who called on him, he requested enhanced co-operation with regard to energy crisis especially in financing of power sector projects and improvement in Discos. He briefed the delegation on the current energy situation and said Pakistan was passing through an energy deficiency regime which was causing huge loss to the national economy. There was unease in cities and towns due to electricity outages. The caretaker government is trying its level best to reduce the crisis and provide relief to the people. "We have identified problems in generation, pilferage, transmission and distribution losses, inefficiency and mismanagement are major causes of the crisis," he added. As a short-term solution to reduce the hours of loadshedding, Ministry of Water and Power has planned to shift the resources from inefficient plants to efficient plants by providing them oil and gas to generate additional 1,000 MW. The government has been asked to provide Rs 150 billion and 150 mmcfd gas to run efficient power plants at capacity. Malik also revealed that allocations of oil and gas would be uploaded on website and made public. Performance guarantee agreements would also be signed with the CEOs of Discos. The Minister observed that construction of dams, run of river hydel projects, coal and alternative energy generation projects were the solution to energy crisis on sustainable basis. The US participation in these projects would ease the situation. Jonathan Conley said United States and Pakistan together were carrying out large-scale energy projects that would add 900 MW of capacity to the power grid by end 2013. These projects include renovating the power plant at the Tarbela Dam, modernising the generators of the Mangla Dam, upgrading the Guddu, Jamshoro and Muzafargarh power plants and construction of Gomal Zam Dam. US technical assistance is also supporting crucial policy and management reforms which are underway in Pakistan''s Ministry of Water and Power. The reforms are focused on reducing technical losses on the power grid and on increasing receivables.

Copyright Business Recorder, 2013

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Satpara Power House No 3 begins generation

Power House No 3 of Satpara Dam Project with installed capacity of 2360 kilowatt (KW) has started power generation on Friday. The under-construction Power House No 4 with an installed capacity of 1400 KW is also scheduled to go into operation by the end of this month. With the completion of these two power houses, Satpara Dam Power Complex will attain the installed capacity of 17.36 megawatt (MW). Power House No 3 and 4 utilise the water used for running the Power House No 2, as cascade system for electricity generation. It may be mentioned that Power House No 1 and 2 of Satpara Dam Project have been in operation since October 2007 and December 2008, respectively, and have contributed over 140 million units of low-cost hydro electricity providing much needed relief to the local populace. Satpara Dam - the first-ever mega water and power project in Gilgit-Baltistan is located in the vicinity of Skardu town. The project consists of three components including a dam, irrigation system and a power complex comprising four power houses. The dam was completed in July 2010 and the irrigation system in 2012. The United States Agency for International Development (USAID) provided a grant of US $26 million to help complete Satpara Dam Project. The dam has a water storage capacity of 93,000 acre feet to irrigate more than 15,000 acres of land. The project is also providing 3.1 million gallons of potable water daily to the local populace.

Copyright Business Recorder, 2013

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Senate panel's resolve: efforts to be made to generate 45,000 megawatts power from NAs

Senate Standing Committee on Foreign Affairs, Kashmir and Gilgit-Baltistan Affairs Monday expressed the resolve that efforts would be made to generate 45,000 megawatts electricity from Northern Areas. The panel which met with Senator Haji Adeel in the chair here at the parliament house, was informed by Secretary Kashmir affairs Kamran Ali Qureshi that Northern Areas have the capacity to generate 45,000 MW electricity and China and some other countries are also ready to provide soft loans for the generation of electricity. Member of the committee Senator Farhatullah Babar said that the panel should call WAPDA and other relevant departments for its next meeting to chalk out future strategy to get rid of the power crisis. Jahangir Badr was of the opinion that electricity demand is rapidly increasing and the country needs to take advantage of the latest technology to cope with the energy crisis. Chairman of the committee observed that the glaciers in Siachen are rapidly melting due to meaningless war between Pakistan and India, which is also resulting in heavy land sliding, besides posing threats of floods. He said the two countries should hold meaningful dialogue to resole the Siachen issue so as the natural calamities should be controlled effectively. The panel was also briefed on the on-going development projects in Gilgit-Baltistan, Atta Abad and Shigar lakes created due to land slide, and the damages caused by lakes to road infrastructure and the steps taken to repair the damaged infrastructure.

Copyright Business Recorder, 2013

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South Asian states urged to develop cooperation in energy field

Senior economist Dr Akmal Hussain has stressed upon the South Asian countries to develop co-operation in the field of energy and share their energy recourses by establishing a South Asian grid. He also said Pakistan, Nepal and Bhutan have lot of potential of generating power and these countries are capable of fulfilling the energy needs of the whole region. Akmal was addressing a seminar on energy crisis organised by South Asia Free Media Association (Safma) on Friday. Akmal said that Pakistan's biggest problem in the power sector is circular debt and the government should arrange eight billion dollars to pay the debt. He also said Pakistan should also buy electricity from Iran and India to meet its need. While quoting the data of Pakistan Institute of Development Economics (PIDE), Akmal said 68 per cent losses are line losses, including power theft. He said Pakistan is producing 70 per cent electricity from thermal and only 30 per cent from hydel. We should construct small dams so that we can generate cheap hydel electricity, he added. Speaking on the occasion, senior economist Dr Ijaz Nabi said if we want to solve the problem of circular debt then there should be no subsidy on electricity and we should take steps to make power companies profitable. He said there is a concept in South Asia that cheap electricity is the right of every person and we need to change this concept. Electricity and gas should be given to the industries on priority basis, he added. Energy expert, Dr Omar said after paying the circular debt we should introduce two slabs of rates, normal rate and peak time rates. He said during peak time rates should be more and industries will get electricity without interruption. He said the government should take steps to generate power from coal, adding that it is a wrong perception that electricity produced from solar and wind is cheap.

Copyright Business Recorder, 2013

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USAID to boost role of women in energy sector

"Women already play a key role in Pakistan's economy and strengthening their role in energy sector will create a real difference in national prosperity," said Craig VanDevelde, Chief of the United States Agency for International Development (USAID) Power Distribution Programme at a gender equity workshop organised by the USAID to reinforce the role of women in the energy sector. With inflation spiking to 12.7 percent against the 1.4 percent it has been for the past seven years, the single salary of the earning male member can no longer feed a family. It is becoming imperative to double the number of the female workforce at a rapid pace; in order to achieve this missed opportunities for women must be identified. Further to this it is incumbent to pave the way for improvement of the working environment vis-à-vis gender balance, and instil an atmosphere that accepts women as assets and resources. The USAID Power Distribution Programme is currently holding Gender Equity Training sessions at all government-owned Power Distribution Companies (Discos) of Pakistan. These trainings are in line with the Constitution of Pakistan, which discourages discrimination on the basis of sex and allow for measures to ensure the total participation of women in all spheres of economic life. "Women's equality is a prerequisite for the development of any country. The national economy is experiencing important losses because of low participation of women in the economy," said Craig VanDevelde. The USAID Power Distribution Programme is a five-year USAID-funded project.

Copyright Business Recorder, 2013

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Power supply improves

The power situation has improved due to 1,500MW increase in electricity generation by hydel power units and Independent Power Producers IPPs, Wapda spokesman said on Monday. He said UCH power house has resumed operation and is generating 550MW of electricity after repairs of its damaged gas pipeline. The fuel supply to Hubco and Pak Gen has also improved and IPPs contribution to the National Grid System has increased to 5,010MW. The spokesman said that in view of the alarming shortfall between the demand and supply, the Indus River System has increased outflow from the Tarbela dam from 20,000 to 25,000 cusecs, which has added 400MW more electricity to the country. He said the hydel, IPPs and Gencos produced 9,100MW against the demand of 12,600MW leaving a deficit of 3,500MW, which was met by about 12 hours load-shedding. Hydel units generated 2,600MW, IPPs 5,010MW and Gencos 1,490MW. 540MW electricity was exported to KESC.

Copyright Business Recorder, 2013

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Government urged to take steps to overcome energy crisis

While lamenting the poor situation, Pakistan Economy Watch (PEW) has urged the caretaker government to take measures for overcoming energy crisis which has adversely affected country's economic growth. In a statement issued here on Monday President Pakistan Economy Watch Dr Murtaza Mughal said the electricity load-shedding has increased once again across the country as shortfall has reached 4000 megawatt. He said electricity load-shedding has created a shocking situation in the country which is being badly affected the country's nascent economy. People of urban as well as rural areas are bound to suffer at the hands of Water and Power Development Authority (Wapda) which has pushed the country into abyss of degradation. He underlined the need that proper management and good governance will go a long way to control the power deficiency to great extent. Dr Murtaza Mughal said power load shedding mostly depends on the supply of furnace oil and natural gas to the power sector, it is therefore government should ensure fuel supplies on urgent basis to power sector otherwise the power shortfall might further increase in the end of April. The government, he said has provided about Rs 250 billion subsidies so far on electricity in the current fiscal year 2012.13 whereas the target for the entire year was set Rs 185 billion. "The International Monetary Fund (IMF) didn't say to increase the power tariff rather insisted to control the budget deficit. There are persistent power cuts, its widespread theft and line losses," he added.-PR

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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Judicious usage of gas, furnace oil: power generation can be enhanced by up to 2,000 MW

The government can increase current power generation by up to 2,000 megawatts through judicious usage of natural gas and furnace oil, a senior Petroleum Ministry official said. "About 1.9 million tons of furnace oil supplied to IPPs instead of Gencos in 2010-11 would have resulted in a net additional generation of 2,000 MW of electricity, or, 1.898 Million tons of HFO given to Independent Power Plants (IPPs) instead of Gencos (in 2010-11) would have resulted in saving of 0.442 million tons of HFO for same generation saving $288 million worth imported HFO," the official added. "We are wasting precious gas, around 300 Million Cubic Feet per Day (MMCFD) of natural gas by supplying it to Captive Power Units as these houses are producing only 900 megawatts of electricity from this gas, but efficient use of 300 MMCFD of gas could produce 1,800 megawatts," the official added. Similarly 0.681 million tons of HFO given to IPPs instead of KESC would have resulted in saving of 0.128 million tons of HFO for same generation saving $83 Million worth imported HFO. Sources said that Engine plus Steam Turbine power plants are the most efficient users of the HFO fuel and should be given top priority for HFO consumption. Gas turbine combined cycle power plants (CCPP) with IPPs are the most efficient users of gas fuel and, therefore, should be given the top most priority for gas consumption. According to sources there is a striking difference between the generation efficiencies of plants in government and private sector. According to 2010-2011 published data, the thermal generation efficiency (HHV based) for Government owned Power Generations Companies (Gencos) remained 27.5 percent on gas and 30.2 percent on furnace oil (HFO). KESC operated plants were slightly better with a gas based efficiency of 32.5 percent while Independent Power Plants (IPPs) collectively demonstrated a generation efficiency of 43 percent on gas and 39.4 percent on HFO. Government, especially Ministry of Water and Power, has been hell bent on diverting all the gas to power sector especially the inefficient government sector gas-based plants which deprived other efficient sectors of the economy from getting gas in 2011 and 2012. New set-up should focus on judicious usage of this precious reserve which is fast depleting too. Every sector should get gas on equal terms and in equal quantity. Main reasons for this huge production difference between Gencos and IPPs are old technology and equipment installed at Gencos, efficiency down gradation due to improper maintenance, and operational mismanagement possibly including theft of fuel. For Boiler+ Steam Turbine configuration (Mostly HFO based) the most efficient users are IPPs like AES Lalpir, AES Pakgen and HUBCO, and these should be the priority plants after the Engines + Steam Turbine plants for the HFO use, KESC and Gencos should be the last plants to get HFO for power generation, sources added. NTDC dispatch instruction should also consider this efficiency table to make sure that the most efficient plants are given dispatch instruction for a given fuel. If we want to solve the energy related issues of the country with limited resources in hand, we must ensure efficient utilisation of natural gas, which is a depleting indigenous resource, and less burden on our economy due to expensive FO imports, sources added. Sources said that due to massive gas curtailment, four SNGPL-based fertiliser plants in Pakistan lost production by 89 percent in year 2012. Out of the total production capacity of over 2.2 million tons, SNGPL-based fertiliser plants produced only 256,500 tons of urea in year 2012, which is lowest ever production by these fertiliser plants in the history of this sector. Producing only 11.6 percent of the total urea production capacity of SNGPL-based fertiliser plants shows the worst ever gas curtailment being faced by the fertiliser plants in the country. The combined urea production figures are also very dismal as the whole fertiliser sector on SNGPL as well as Mari network only produced 4.1 million tons of urea compared to 4.8 million tons it produced last year against an installed capacity of 6.9 million tons. The overall production loss of 2.8 million tons in a year has never been witnessed before. Year 2011 and 2012 have been the worst years for fertiliser sector as instead of providing gas to local fertiliser plants to produce economical and affordable urea domestically, the government preferred to import urea by spending a hefty amount of over US$ 1 billion from scarce foreign exchange reserves. It's not just the fertiliser plants that suffered losses due to gas curtailment but the government has also incurred significant losses by importing urea worth over $ 1 billion and providing subsidy of over Rs 50 billion on imported urea in the last 2 years. Urea is the most expensive form of energy that is imported costing around $23/MMBTU, whereas RFO and LNG would be 30-50 percent less expensive than urea on a MMBTU basis, he added.

Copyright Business Recorder, 2013

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AEDB initiates study for introducing solar water heaters

The Alternative Energy Development Board (AEDB) on Friday signed an agreement with a foreign firm having representation in Pakistan to undertake a two-phased study for the introduction of solar water heaters in the country with the World Bank’s support. The overall objective and purpose of the study is to develop a national program to replace conventional gas geysers with solar water heaters (SWH) by identifying the potential areas for the intervention with minimum stakeholder involvement and to determine technical, financial, economic and social viability of the intervention under different implementation models. The study also includes the pilot testing of the program through practical demonstration of the models in different areas and regions. It will also review the existing technology and identify the most appropriate technology to be adopted for consumers in Pakistan including the assessment of the local market potential and capacity. The study is designed to be implemented in two phases i.e. the design phase and the pilot phase. This study has been awarded to M/s Electra Consultants with M/s Integration Environment & Energy of Germany after being shortlisted as per the set procedures and with the prior approval of the World Bank. CEO AEDB Arif Alauddin told The News that the government was taking all possible steps to introduce alternative / renewable energy (ARE) technologies in order to reduce reliance on conventional energy sources. “The world is moving fast to adopt these emerging technologies, but the government is adamant to catch up with the countries ahead in ARE sectors,” he added. He maintained that the government has already exempted solar water heaters from customs duty and sales tax as a result over 12,000 SWHs have been imported. According to him, these heaters are deployed all over the country, especially in Balochistan, Gilgit-Baltistan, Khyber Pakhtunkhawa and Northern Punjab. Some Pakistani companies are also manufacturing SWHs locally, and more are in the pipeline for local manufacturing. “Alternative energy resources are no more considered as alternative to the conventional resources but are now being seen as the main energy resources for the future,” Alauddin said. “Sooner we adopt and promote them better it would be for the country to cover up its existing and future energy demands,” he observed. The CEO of AEDB said that the board has been supporting private and public sectors, especially provincial governments, for on grid and off grid applications of solar energy. The AEDB has been working on standardisation of documents relating to solar power projects, which would help reduce timeline periods required for project implementation. So far on grid projects with a capacity of over 250 MW are at various stages of development. Under the Solar Village Electrification Program, 3,000 solar home systems have been installed in 49 villages of District Tharparkar, Sindh. Another 51 villages in Sindh and 300 villages in Balochistan have been approved for electrification using solar energy and the same will be implemented following release of funds. Under the Parliamentarian Sponsored Village Electrification Programme, 32 feasibilities have been prepared and submitted for approval and release of funds. Funds for three schemes have so far been released under PWP-II and the schemes are being implemented. Arif Alauddin disclosed that during the last few years, the government allowed duty free import of a large number of solar panels and solar modules to private sector companies for the installation and generation of over 25MW of energy. The AEDB has also been helping installation of solar water pumping systems in the country and so far around 800 systems have been installed mostly for drinking and agriculture projects for communities all over the country.

Copyright The News Karachi 2013

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Pak envisions $11b Chinese Investment in Energy Sector

Beijing—Ambassador to China Masood Khan has said that Pakistan envisions a Chinese investment of more than US $ 11 billion in the energy sector during the next five years. The Ambassador expressed these views in his introductory remarks at a Road Shows held here for the management, operation, maintenance and rehabilitations of the nine public sector thermal power complexes through private sector Operation and Maintenance contractors by Pakistan’s Private Infrastructure Board (PPIB). He said that a major part of Pak-China economic cooperation is focused on energy development. He pointed out that PPIB is a prestigious organization. Since 1994, under its aegis, the energy generation capacity of the private sector has increased to more than 8000 megawatts. PPIB have even more ambitious plans for the future and expects to add an additional 8000 megawatts in the next 5-6 years. The Government of Pakistan has now asked PPIB to outsource management, operation, maintenance (O&M) and up gradation of nine public sector thermal power plants, with an installed capacity of around 4500 megawatts, to the private sector. These plants are currently producing only 1400 to 2000 megawatts of electricity. Chinese enterprises have undertaken numerous projects in Pakistan in hydropower, thermal, nuclear and alternate energy sectors, he said adding The 5- year development programme in particular encompasses the whole spectrum of economic cooperation but lays special emphasis on energy cooperation. The Mangla dam raising, Kohala dam, Neelum Jhelum dam, the Nandipur and the Chichokimalian Thermal power projects are some of the important projects being undertaken by Chinese enterprises in Pakistan. A number of big hydro, coal and alternate energy worth billions of dollars are in the pipeline, he noted. Last year, our top leadership decided to set up a Pakistan China Joint Energy Working Group (JEWG). The Group’s first session held in August this year has indentified a vast array of coal, hydro, thermal, and alternate energy projects. This Ministerial level working group will ensure that all projects undertaken between Pakistan and China have the full support of our governments. He said that most economic analysts now believe that a major portion of future global growth is going to take place in developing countries, particularly in Asia. In Pakistan, despite the adverse international economic situation due to weak demand in Europe and the recent financial crisis, the economy remains essentially robust with high demand for consumer goods and energy. During recent years, Khan said that in tandem with our strong political and strategic ties, economic cooperation with China has grown substantially. Last year our overall bilateral trade with China grew by 28 %.

Copyright Pakistan Observer 2013

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China reiterates desire to invest in energy sector

China is already working on 120 projects in Pakistan with around a quarter related to energy. PHOTO: EXPRESS ISLAMABAD: China is committed to invest heavily in Pakistan’s energy and other sectors to improve lives of Pakistani citizens, Deputy Chief of Mission of the Chinese Embassy Yao Wen said Thursday. Speaking at a function at a local school here, Wen said China is already working on 120 projects in Pakistan with around a quarter related to energy. In addition, Wen said, during the last five years volume of bilateral trade has grown by 70% cent to over $12 billion with Pakistani exports increasing two-fold from $1 billion to $2.2 billion. Wen stressed the need for enhancing collaboration between educational institutions and exchanges of students and researchers to promote intellectual cooperation. Lauding the role of Pakistan in regional and global peace, stability and development, he said that Pakistan has offered great sacrifices to ensure peace. Speaking on the occasion, former president Chinese Association Raza Khan lauded Chinese assistance and cooperation in various fields, terming it a great service to people of Pakistan. He lauded the active involvement of Chinese Ambassador Liu Jian in capacity building of students and said that supporting needy students was a great service for social development. Joint Secretary Ministry of Education Professor Muhammad Rafiq Tahir termed China a sincere friend, and said that two countries should fully unleash their potential of cooperation to benefit masses. Pakistan and China need to work closely together to seize opportunities and meet challenges to develop economy and improve people’s well-being.

Published in The Express Tribune, March 29th, 2013.

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Iran, India to discuss extension of IP gas pipeline next week

Iranian and Indian oil ministers are due to discuss extension of a gas pipeline project which is due to take Iran's rich gas reserves to Pakistan and then to India in a meeting in New Delhi next week. Iranian Oil Minister Rostam Qassemi is stated to visit New Delhi next week to hold a meeting with Indian Petroleum and Natural Gas Minister Veerappa Moily on the gas pipeline. Pricing formula and security of the pipeline will top the topics to be discussed by the two ministers. Earlier this month, Iranian Oil Ministry Spokesman Alireza Nikzad Rahbar announced that New Delhi has renewed interest in the extension of Iran-Pakistan (IP) gas pipeline to India. "Since India has been motivated by Pakistan's seriousness in the construction of the (Iran-Pakistan) peace pipeline, New Delhi is negotiating to join the project," Nikzad Rahbar said. The Iranian official noted that "there has been considerable progress in the IP gas pipeline, with Iranian contractors starting work on the Pakistani section of the pipeline, after finishing nearly 900 kilometers of the pipeline on Iran's soil".

Copyright Independent News Pakistan, 2013

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Byco's new refinery to commence operation anytime soon

Byco, the country's largest oil refinery, will soon commence with a crude oil refining capacity of 120,000 barrels per day, a move that would reduce reliance on imports of petroleum products. "With a 35,000 bpsd refinery already in place, Byco is set to achieve a refining capacity of 155,000 bpsd which is 55 percent more than the current largest refinery in the country, with a blue print in place for an unprecedented increase to 220,000 barrels per day by year 2018," Qaiser Jamal, Chief Executive Officer, Byco Oil Pakistan Limited said while briefing Islamabad-based visiting journalists. Byco Oil Pakistan Limited outlined the aims of Byco in the Petroleum and Petrochemical sector: "Oil refining and that too putting together Pakistan's largest refinery, has been a gargantuan task. But we were prepared for all challenges and shall soon commence our next big contribution, the petrochemical complex." With operations at full capacity, the total oil refining capacity of 155,000 bpsd equate to almost 39 percent- 41 percent of country's total oil refining capacity, depending on the number of on-stream day factor. The new Byco Oil Refinery recently completed a successful 72-hour performance test run at 60 percent of capacity. During the performance test run operation, the refinery produced on-specification petroleum products such as naphtha, kerosene, HSD and HSFO. Jamal stated, "The 72-hour trial run was the very last of all critical tests, rendering assurance to the credible integrity and operability of the process units and on-site utilities." The Refinery is poised to greatly enhance domestic refining capacity, increasing the current capacity of approximately 12.5 million metric tons per annum to almost 18.5 million metric tons per annum, while full throughput is expected to produce about 1.6 million tons HSFO, 2.4 million tons HSD, 1.1 million tons of MS and 0.8 million tons of LPG on an annual basis, figures much needed for Pakistan's consistently rising energy needs. Anticipating the new 40,000 bpsd, PSO Khyber Pakhtunkhwa Refinery soon becoming operational, Pakistan will become virtually self-sufficient in meeting its petroleum requirements. As a result, the new Byco Oil Refinery will provide substantial import substitution to the country. The deficits are expected to dramatically reduce by about 71 percent in HSDO, 68 percent in Motor Gasoline and 27 percent in Furnace Oil, resulting in substantial foreign savings to national exchequer. "The new Byco Oil Refinery will also be introducing Pakistan's first and only Isomerization Unit. At present, refineries in Pakistan export Naphtha which can be upgraded to gasoline by processing it through the Byco Isomerization plant which has a capacity of 12500 bbl/day. Gasoline obtained from Isomerization, besides rendering value addition to export Naphtha, will serve as an at par substitution for imports, and greatly offsets the necessity of unnecessarily expensive imported Motor Gasoline", said CEO BOPL, Qaiser Jamal. "Byco has resourced its utilities requirements to include maintaining a 23-km access road for the last 10 years, processing its own water needs by reverse osmosis technology and using its refinery gas in place of natural gas and finally generating its own electricity for operation of plant and equipment," he added.

Copyright Business Recorder, 2013

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$5 billion South Korean investment in pipeline, says envoy

South Korean Ambassador to Pakistan Choong Joo Choi has said that an estimated $5 billion investment in Pakistan is currently in the pipeline, will help facilitate even greater Korean investment in Khyber Pakhtunkhwa. Addressing the inaugural ceremony of the honorary consulate of Republic of Korea in Peshawar at the Gulshen-e-Aziz late Thursday evening, Choong Joo Choi said opening the consulate was the symbol of the importance his country attached to "this land of brave people". He said that establishment of the consulate was also a promise that Pak-Korean diplomatic, cultural and economic relations will get stronger in the future. He said Pakistan and Korea were celebrating 30th year of the establishment of their diplomatic relations, but over the last few years ties of both the countries have been strengthened like never before. Referring to the appointment of the honorary consul in Peshawar, Afan Aziz, the Korean ambassador said that it was part of the outreach efforts of the Korean government to upgrade its services by providing inclusive consular services to the people of the KP. Ambassador requested the people of the KP to visit the honorary consul so that he could serve them better. Earlier, the honour consul of Republic of Korea in Peshawar, Afan Aziz said that till seventies the economies of both Korea and Pakistan were parallel, but since then the Koran economy grew and after economic expansion in Korea, where the per capita income in 1961 stood at the paltry $80, it is standing among the world 30 countries in terms of per capita income. It (Korea) has become one of the developed and influential countries in the world, he said. He said the Korea was a role model in so many respects to Pakistan and we can learn a lot from the development model of Korea. He said that government has been perusing "look east" policy and the nation would soon go to the crucial vote and after elections I hope the would try to peruse the same policy and send some teams to Korea to learn and implement the Korean model in the KP because we want to see this province grow. Senator Muhammad Ilays Khan Bilour, Former chief secretary KP Muhammad Azam Khan, and additional chief secretary Attaullah Khan Toru were among over two hundred dignitaries, officials and guests attended the ceremony.

Copyright Business Recorder, 2013

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PSO launches world's first-ever community-owned station

Pakistan State Oil (PSO), the nation's leading energy company has inaugurated the world's first ever "Community Owned Station" in Pakistan at Khwaspur Chowk, District Gujrat under the leadership and guidance of its CEO & MD Naeem Y. Mir. This retail outlet is the first ever of its kind in the world and the credit of its creation goes to PSO, says a press release issued on Thursday. This station has been established as per the company's new vision of social emancipation through which the management intends to empower local communities and provide them with the tools they need to improve their status quo. The project is another milestone in PSO's long list of achievements and will help support local communities to own their own business, generate employment opportunities for themselves and increase their standards of living. Through this initiative, retail outlets will be developed in underdeveloped areas, the dealership of which will be extended by the company to the local residents. Under the program, the entire worth of the station will be divided into shares for the community. Furthermore, PSO plans to replicate this concept by establishing two such retail outlets in each province of the country, for a total of ten outlets nation-wide in this year alone. The introduction of this station was met with great appreciation by the inhabitants of the locality who thanked PSO for its efforts on behalf of the populace and pledged to maintain the station as per PSO standards. Naeem Y. Mir said, "Today we have proved that PSO is truly a national company and that we go beyond the bounds of business to touch the lives of the people of Pakistan." Zulfiqar Jaffri-SGM Retail & Lubricants along with other members of the Retail Business team were also present on the occasion. PSO in its role of being both a public sector as well as the largest energy company in Pakistan is committed to providing for the people of the nation both today and tomorrow.-PR

Copyright Business Recorder, 2013

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Hyundai, ARL ink refinery upgrading deal

Attock Refinery Limited (ARL) and Korea's Hyundai Engineering Company Limited on Thursday signed an agreement worth $251 million for upgrading the refinery in accordance with international standards. According to the agreement, the refinery's upgrading would include the installation of an isomerization unit to boost the production of premium motor gasoline, a preflash unit (to enhance refining capacity), diesel hydrodesulphurisation (DHDS) unit to reduce sulphur content in High Speed Diesel and expansion of its existing Captive Power Plant. The total value of these projects is estimated to be $251 million. The agreement was signed at a simple, but impressive ceremony held here. Adil Khattak, Chief Executive Officer (CEO) signed the agreement for ARL, while Won Ock Kim, Project Director signed the agreement on behalf of Hyundai Engineering Company. Adil Khattak appreciated efforts of both ARL and Hyundai Project Management Teams for their hard work in concluding these agreements and expressed the hope that the Refinery Upgrading project would be completed on schedule. He also thanked the Ministry of Petroleum and Natural Resources for enabling local refineries to undertake expansion projects.

Copyright Business Recorder, 2013

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PSO, KP sign MoU for $800m refinery

Pakistan State Oil signed a Memorandum of Understanding (MoU) with the Government of Khyber Pakhtunkhwa (GoKP) for the establishment of an oil refinery in the province. The MoU was signed in Peshawar on Thursday. According to the MoU, PSO would set up a technologically advanced refinery with a capacity of 40,000 barrels per day (BPD) on about 400 acres of land in district Kohat-Khyber Pakhtunkhwa. The project was envisaged to be set-up through a public-private partnership and would utilise crude oil from nearby indigenous supply sources. The project was expected to be fully commissioned by 2016-17, a statement by PSO said. The MoU was signed by Additional Secretary, Ministry of Petroleum and Natural Resources Naeem Malik, PSO Managing Director Naeem Yahya Mir and GoKP Secretary Energy and Power Zaffar Iqbal. Also present were KP Chief Minister Tariq Pervaiz Khan, Minister for Energy and Power Muhammad Yunis Marwat and a team of PSO officials. The PSO statement said that the refinery would help improve the overall availability of POL products across the country as well as result in sizeable foreign exchange savings. It would also increase PSO’s operational base through diversification in the midstream segment and lower distribution cost in the related supply envelopes. The refinery was also looked upon to help create job opportunities for the local populace. “It is also expected that substantial foreign direct investment will also take place as a result of this project,” the statement said. In reply to queries PSO MD Naeem Yahya Mir told Dawn on phone that the projected cost of the refinery was $700-$800m. It would be financed by mix of debt and equity in the ratio of 80:20. Naeem Mir was confident that the debt portion would be raised as several large banks had expressed interest in the refinery. He believed that the banking sector was flush with liquidity and required a visibly viable project for investment. In regard to the 20 per cent equity portion of financing, the MD PSO said that GoKP would contribute 20pc share, while the balance would be taken up by PSO. The company would retain the operational and management control of the refinery, he said. Naeem Mir brushed aside the issue of circular debt and said that PSO was financially strong to subscribe to its portion of equity. He pointed out that the company, which has average 60 per cent market share, generates net cash of Rs8 billion daily. He did not think that security issues could surface in setting up the project in the KP. In regard to the bidding for acquisition of Chevron (formerly Caltex Oil Pakistan Limited) Marketing Affiliates in Pakistan, which includes 12 per cent stake in Pakistan Refinery Limited (PRL), Naeem Mir stressed that PSO had the “first right of refusal” to buy out the PRL holdings in Chevron. He said PSO held 18 per cent of PRL while Shell Pakistan had 30 per cent shares. The MD PSO affirmed that PSO was interested in the Chevron’s stake as it still had an eye on an eventual buy-out of PRL.

Copyright The Daily Dawn, 2013

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Foreigners eyeing OGDCL

International investment companies have indicated their interest in OGDCL shares, the oil and gas development company announced here on Thursday. There was a reasonable demand and appetite for OGDCL shares in the international market. Investors have raised the issue of non-availability of OGDCL shares in the market and expect that the Pakistani government will decide to make divestment a prompt, positive and encouraging response is expected from the internal market. According to the investors, big lots of OGDCL shares were not available in the market as major share holders preferred to retain their share in the company. The Bank of America Merrill Lynch arranged the Asean Stars Conference in Singapore, attended by various asset management companies and fund managers. OGDCL management attended the conference and highlighted financial state of OGDCL which attracted the fund managers to invest in OGDCL in Pakistan. They raised quires about the overall economic aspects to understand some misconception about certain relevant areas which investors typically consider while making investment decisions. The perception was developed on account of repenting of domestic law and order situation; the institutional investors have a better insight about financial and securities market and were likely to take a mature position with long term investment prospective. The other issues raised during the conference were energy shortfalls with ramifications, effect of circular debt on the ability of OGDCL to meet its funding requirements, gas supply arrangements with the fertilizer sector and resulting benefits for OGDCL. Also raised were issues relating to overall state of revenues, profitability , cost of doing business, earning per share and share value of the company, dividend policy of the company, availability of OGDCL shares in the market and possibility of further divestment by the government, incentives for the exploration and production (E&P) sector under the existing regulatory and policy regimes governing E&P sector, challengers in general and for E&P sector in specific and security situation in the country.

Copyright The Daily Dawn, 2013

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Gas pipeline: Pakistan, Iran to meet to finalise construction contract

Iranian team will arrive for talks to be held on April 15 and 16. ILLUSTRATION: JAMAL KHURSHID ISLAMABAD: Pakistan and Iran are set to resume talks in mid-April to finalise the award of a multi-million-dollar contract to an Iranian firm for laying a gas pipeline inside Pakistani territory, a process that has already been delayed because of some bottlenecks. “An Iranian team will arrive in Islamabad on April 15 and 16 to finalise the award of contract to Tadbir Energy of Iran,” a source said. The contract would have been awarded by the previous government, which completed its tenure on March 16, had the finance ministry approved the term sheet of contract, submitted by Tadbir Energy, and grant of sovereign guarantees on time, sources said. The ministry gave the approval to the term sheet and sovereign guarantees quite late on March 15. Pakistan was set to award the construction contract to Tadbir Energy at the time of the official launch of work on the project on the Pak-Iran border, which was inaugurated by President Asif Ali Zardari and Iranian President Mahmoud Ahmadinejad on March 11. However, no agreement was signed. Earlier, Pakistani officials had held several rounds of negotiations with Tadbir Energy, the firm designated by Iran, for the construction of the pipeline and financing of $500 million offered by Tehran. The two sides had agreed that the finance ministry would issue sovereign guarantees to Tadbir Energy to cover the construction contract and financing, which was one of the conditions for the engineering, procurement and construction contract. The cabinet committee gave the go-ahead to the issuance of sovereign guarantees. “In the final round of negotiations with Tadbir Energy on March 16 and 17 in Tehran, a Pakistani team told the Iranians that the finance ministry had finally approved the term sheet, paving the way for the award of contract,” an official said. Initial agreement has already been reached with Tadbir Energy, but final accord is awaited. The cabinet has waived Public Procurement Regulatory Authority (PPRA) rules to award the contract directly to the Iranian firm. Pakistani public sector firm Interstate Gas Systems (ISGS) and Tadbir Energy inked the initial contract in Tehran. Though western governments have imposed sanctions on Iran, Tadbir Energy does not fall within their ambit. It is controlled by the Imam Khomeini Foundation, one of Iran’s largest charitable groups. Tadbir Energy will undertake all engineering, procurement and construction work on the first phase of the pipeline, starting from the Pak-Iran border, costing around $250 million. In the second phase, the financing facility will be increased by up to $250 million, depending on discussions regarding the involvement of Tadbir Energy in gas distribution in Pakistan. It will act as the lead contractor along with local subcontractors. Under the project, Iran will start supplying 750 million cubic feet of gas per day by the end of December 2014, which will be consumed by power plants to generate 4,000 megawatts of electricity. The engineering and project management consultant, appointed in April 2011, has completed work on bankable feasibility study, interim front-end engineering design and route reconnaissance survey.

Copyright The Express Tribune, 2013

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PSO, Engro sign MoU on Thar Coal project

With an eye towards diversification of its business line, the country's leading public sector company, Pakistan State Oil (PSO) has signed a Memorandum of Understanding (MoU) with Engro Powergen Limited (EPL) to review of the technical and economical feasibility of the Thar coal project. The MoU was signed between Naeem Yahya Mir, CEO & MD PSO and Muhammad Ali Ansari, President and CEO, Engro Corporation Limited. Also present at the occasion were Zubair Motiwalla-Chairman Sindh Board of Investment and Chairman Sindh Engro Coal Mining Company (SECMC) and Shamsuddin Ahmed Shaikh, CEO SECMC along with Mohammad Arif Khan, Additional Chief Secretary (P&D) Government of Sindh, Ejaz Ahmed Khan, Secretary of Coal and Energy Development Department Government of Sindh and other directors of the company. This MoU has been signed keeping in view the fact that as coal is comparatively cheaper and easily available in comparison to other fuel sources, it has become the fuel of choice for developed nations across the world. Therefore, with an aim of responsibly providing for the rising energy needs of the country, PSO is exploring multiple investment opportunities in the energy sector with special emphasis on Thar Coal and intends to acquire 50 percent of Engro Powergen Limited's shares in SECMC as part of this plan. Both PSO and Engro are in agreement that coal is the best possible indigenous fossil fuel resource for Pakistan and has the potential to address the country's severe power shortage and bring energy security to the country. Through this project, not only will the energy chain be strengthened it will also generate extensive economic activity nation-wide while developing Pakistan's human capital through the execution and operation of state-of-the-art coal mining and coal-based power generation projects.-PR

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