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News Headlines for the month of
MAY 2013

Neelum Jhelum hydropower project: EXIM Bank of China to provide $448 million

The EXIM Bank of China signed an agreement with the Government of Pakistan to provide $448 million for strategically important 969MW-Neelum Jhelum hydropower project. According to the APTMA spokesman, this agreement is a significant development in the efforts to secure requisite financial resources for the remaining works of under-construction Neelum Jhelum Hydropower project. Neelum Jhelum Hydropower project is being constructed on River Neelum in Azad Jammu and Kashmir. In addition to generating much-needed low-cost hydel electricity to help mitigate power shortages in the country, the project is also equally important for Pakistan to establish priority water rights. In view of its significance, Wapda is making all possible efforts to complete Neelum Jhelum Hydropower Project by 2016. At present, the construction work on all sites of the project is progressing satisfactorily. Out of total 67-kilometre (km) tunnels, 34.24km long tunnels (51pc) have so far been excavated, while excavation of under-ground power house stands at 75.24 percent and transformers hall at 96.33 percent. It is pertinent to mention that Neelum Jhelum Hydropower Project, on completion, will contribute 5.15 billion units of cheap electricity every year to the National Grid. Annual benefits of the project have been estimated at about Rs 45 billion.

Copyright Business Recorder, 2013

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Sethi inaugurates solar traffic signals system

Punjab Chief Minister, Najam Sethi, inaugurated solar traffic signals at Faisal Chowk, Shahra-e-Quaid-e-Azam on Monday. Commissioner Lahore Division, Secretary Information, DCO Lahore, DG LDA, DG PHA and other officials were present on the occasion. The CM inaugurated the new system by pressing the button of switch room of solar penal installed for solar traffic signals at Faisal Chowk, Shahra-e-Quaid-e-Azam. Sethi said that the installation work of solar traffic signals has been completed in a short period of one month and the co-operation of sponsors in this regard is commendable. He said that due to installation of solar penal, traffic signals will continue to function even during loadshedding and traffic will not face any problem. The CM told that LED lights have been installed for traffic signals which consume minimum energy. He disclosed that the work of installing solar traffic signals at four other places of the city has been started.

Copyright Business Recorder, 2013

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US willing to help end energy crisis: Olson

US Ambassador Richard Olson on Friday met Pakistan Muslim League-Nawaz (PML-N) President Nawaz Sharif at his Raiwind residence and discussed with him various matters of mutual interest. This was the second meeting of the US diplomat with the PML-N head after May 11 elections. Shahbaz Sharif and Ishaq Dar were also present in the meeting. Olson said that the US wanted to strengthen its ties with Pakistan and was willing to help the country overcome energy crisis. Meanwhile, Indian High Commissioner Sharat Sabharwal and German Ambassador Cyrill Jean Nunn also met Nawaz Sharif separately and discussed issues of mutual interests. Talking to the Indian HC, Nawaz said Pakistan wanted to resolve all issues with India through dialogue. He also said that Islamabad wanted to move forward the dialogue process with New Delhi for resolution of all issues. Sabharwal congratulated Nawaz on his party''s victory in the general election.

Copyright Business Recorder, 2013

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New co-generation projects: Rs 10.41/kWh upfront tariff approved

The National Electric Power Regulatory Authority in its meeting held Thursday approved a levelled upfront tariff of Rs 10.41/kWh for new co-generation power projects based on bagasse to be set up in the country. The announcement of upfront tariff for new co-generation projects is aimed at harnessing potential generation capacity of around 1,500 MW from bagasse - by-product of sugar mills - for supply to the grid. This would reduce processing time and help prospective investors for fast-track development of co-generation power projects in the country. The upfront tariff will be applicable for all new co-generation projects based on bagasse with expected capacity range of 1-50 MW, to be set up as per the framework envisaged by the Government of Pakistan under the Policy for Development of Renewable Energy Projects 2006. This initiative is expected to go a long way in curbing the energy deficit that has stifled Pakistan''s economy. Under the approved terms of upfront tariff, the energy produced from these co-generation projects will be sold to power purchaser (respective distribution companies or NTDC) at 11 kV or 132 kV level. The option for accepting upfront tariff by co-generation projects will be available for one year from the date of approval of upfront tariff by submitting an unconditional formal application to Nepra for approval by the authority in accordance with the Nepra Upfront Tariff (Approval and Procedure) Regulations 2011 and GoP Policy for Renewable Energy 2006 (approved Framework for Power Co-generation 2013 (Bagasse/Biomass). The project sponsors will be required to achieve Commercial Operations Date within two years from the date of approval of upfront tariff. -PR

Copyright Business Recorder, 2013

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Civilian nuclear technology: Nawaz seeks China help to help ease energy crisis

Pakistan Muslim League-Nawaz (PML-N) chief Nawaz Sharif on Thursday sought a greater role for China in the revival of Pakistan''s economy as well as broader co-operation in civilian nuclear technology to help ease the crippling energy shortage. During a meeting with Chinese Prime Minister Li Keqiang, Nawaz Sharif recalled that during his earlier tenures, the two countries had co-operated in many important spheres and it would be his endeavour to encourage China to assume a greater role in the revival of the country''s economy. Urging the Chinese premier to extend co-operation to Pakistan in civilian nuclear technology to overcome energy crisis, Nawaz Sharif said that Pakistan was currently facing worst energy crisis and his administration will encourage the Chinese investment in the sector to ease the crisis in a short time, besides generating employment. The Chinese premier also conveyed an invitation to Nawaz Sharif to pay an early visit to China, to discuss how to give shape to the many ideas that had been exchanged in Thursday''s meeting. While conveying his thanks and deep appreciation for the gracious invitation, the PML-N chief confirmed that he looked forward to an early opportunity of exchanging views with the Chinese leadership, as this would be of mutual benefit to both. Dates for the visit would be finalised through diplomatic channels. According to a statement released by PML-N central media office here, both the leaders held in-depth discussions on ways to strengthen existing bilateral and strategic relationship between the two countries in various fields. Nawaz Sharif said Pakistan wants to take advantage of Chinese expertise in infrastructure development. He said both the countries enjoy long lasting and deep rooted friendship. He told the Chinese premier that his government would accord highest priority to reinforcing the excellent relations with China. He said that a strong, stable and prosperous China was an important factor in the maintenance of peace and stability in the region. The visiting Chinese Premier, while offering his congratulations and good wishes to Nawaz Sharif on his party''s outstanding success in the just concluded general elections, reiterated that the Chinese people had deep respect for the former Prime Minister. "China viewed Nawaz Sharif as a sincere and committed friend, whose contribution to expanding co-operation between the two countries was highly appreciated", the PML-N media central office quoted Premier Li to have told Nawaz Sharif during the meeting. The Chinese Premier also gave an assurance that his government would endeavour to expand co-operation with Pakistan in all sectors, especially those that needed urgent attention. Apart from a comprehensive review of bilateral issues, the two sides were also able to touch on a number of regional and international issues of common interest. "This revealed great similarity between their views, which led to renewed affirmation of their resolve to further enhance their co-operation," the PML-N statement added. The Chinese Prime Minister congratulated Mian Nawaz Sharif on the success of his party in the general elections and hoped it will help democracy in the country. Later talking to media persons, Nawaz Sharif said that economic and defence relations would further be expanded with China during the upcoming tenure of his party in government. He said memoranda of understanding (MoUs) signed during the visit of Chinese Prime Minister will be converted into regular agreements. Nawaz Sharif said that both the countries would continue to work jointly for peace and development in the region. He said after taking oath he will visit China at the earliest on the invitation of Chinese leadership. PML N leaders Shahbaz Sharif‚ Chaudhry Nisar Ali Khan, Senator Ishaq Dar and former diplomat Tariq Fatemi were also present on the occasion while the Chinese Premier was assisted by Foreign Minister Wang Yi and other senior officials.

Copyright Business Recorder, 2013

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China offers to help end energy crisis

China and Pakistan should make co-operation on power generation a priority, Chinese Premier Li Keqiang said, as Islamabad seeks to end an energy crisis that triggers power cuts of up to 20 hours a day, bringing the economy to a near standstill. Li arrived in the Pakistan capital under extra-tight security on Wednesday on the second leg of his first official trip since taking office in March and after a visit to Pakistan and China''s arch rival, India. Li''s plane was escorted by six air force fighter jets as it entered Pakistani air space. Security measures also included shutting down mobile phone networks briefly across the city. Li told a lunch attended by Prime Minister-elect Nawaz Sharif and President Asif Zardari that China and Pakistan should remain "trustworthy partners". Li said there was still "great potential" for the relationship. Bilateral trade last year rose above $12 billion for the first time and both sides are aiming to reach $15 billion in the next two or three years. "Our two sides should focus on carrying out priority projects in connectivity, energy development and power generation and promoting the building of a China-Pakistan economic corridor," Li told media. The two countries signed a series of co-operation documents covering the economy, culture, and science and technology. "Both sides have a desire to converge China''s strategy to boost domestic demand and develop its western region and Pakistan''s desire to further deepen its economic development," Li said after the signing. INDIA WARY There are several joint energy and infrastructure projects under way in Pakistan and China has taken over operation of the strategically important Gwadar port. When complete, the port, which is close to the Strait of Hormuz, a key oil shipping lane, could open up an economic corridor from the Gulf, across Pakistan to western China, and could be used by the Chinese Navy, upsetting India. Li this week offered India a "handshake across the Himalayas" and said the world''s two most populous nations could become a new engine for the global economy - if they could avoid friction. "I wish to reiterate solemnly China''s continued firm support to Pakistan in its efforts to uphold independence, sovereignty and territorial integrity," Li said in a possible reference to India and to the United States, which angers many with drone strikes targeting militants in Pakistan. China''s Xinhua state news agency said Beijing was looking for "pragmatic" military co-operation with Pakistan, "which is in the front line of the fight against international terrorism". "The military exchanges are not directed against any third party and contribute to peace and stability in both the region and the whole world," it said in a commentary.

Copyright Reuters, 2013

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MoU on energy to be inked: Chinese Prime Minister due today

Pakistan and China are expected to sign a number of Memoranda of Understanding (MoUs) in various fields including energy and science and technology during the two day (May 22-23) visit of Chinese Prime Minister Li Keqiang who is arriving in Islamabad on Wednesday (today), official sources told Business Recorder. The sources said both countries will ink one MoU according to which Joint Marine Research Facility (JMRF) will be established with an integration observation centre in Karachi. "We are signing a MoU with National Development and Reforms Commission (NDRC) China which is laying special emphasis on establishment of Pak-China Economic Corridor which envisages Pakistan as a future hub for regional co-operation," the sources added. The MoU would enable the planning authorities to comprehensively plan the long term development of the economic corridor between the two countries that would effectively catalyse economic growth and create employment opportunities for the region. The issues like 969 MW Neelum Jhelum, solar energy projects, 425 MW Nandipur Hydropower Project, 425 MW Chichoki Malian Hydropower Project, establishment of more nuclear power plants, Gwadar Port, progress on currency swap and trade enhancement will also come under discussion between the top leadership of the two countries. The sources said Pakistani leadership is also expected to seek financial support from China for federal budget 2013-14. The sources said Pakistan will request Chinese Prime Minister to allow its engineers to work on development projects in terrorism hit areas as most of the projects are in the doldrums due to evacuation of Chinese staff. Though Pakistan''s exports to China have showed growth of 375 per cent from 2005-06 to 2011-12 against 148 per cent growth in imports in the same period together with uninterrupted unorganised trade between the two countries, the desired growth is yet to be achieved. In July 2010, the government had indicated that the volume of bilateral trade between Pakistan and China would touch $15 billion mark by 2012; however, this target has not been achieved so far. Informed sources told Business Recorderthat the officials of the two countries will also discuss implementation of second phase Free Trade Agreement (FTA) which is been criticised by those sectors that have shut down for being uncompetitive. Both countries have committed that 90 percent products would be brought to zero-tariff by the end of Phase-II. Ministry of Industries (MoI) has also consulted industrial representatives ahead of talks between Pakistan and China as part of the process to review FTA. Both countries signed FTA on November 24, 2006 which according to business circles has hurt some local industries very badly. Citing an example they said that HS Code 4810.9200 was added to the concession list of imports from China. As the negotiators had little or no idea of Pakistan''s Paper & Board industry this folly resulted in allowing 92 percent of our domestic demand to be met through imports from China. Resultantly, billions of rupees of investment in the local industry remained un-utilised. Pakistan Auto manufactures Association (PAMA) argues that 28 percent increase in trade between the two countries in the last five years does not reflect any contribution made by the FTA. This could have been achieved regardless of the FTA.

Copyright Business Recorder, 2013

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KESC, Sindh Engro sign accord on 600 megawatts Thar coal project

Karachi Electric Supply Company (KESC) has signed a memorandum of understanding with Sindh Engro Coal Mining Company (SECMC) to jointly pursue a generation project of up to 600 megawatts electricity as a mark of co-operation between the two companies on development of one of the largest coal reserves around the world in Thar. By virtue of this MoU, SECMC, a joint venture company between Engro Powergen Limited (EPL) and the Government of Sindh, would develop a 600 MWs Mine Mouth Power Plant at Thar Block II, whereas KESC would off take power from this plant to meet the rising power demand in its coverage zone in Karachi city and adjoining areas in the interior of Sindh and Balochistan. The MoU was signed by Nayyer Hussain, CEO of KESC, and Shamsuddin A Sheikh, CEO of SECMC. On this occasion, Nayyer Hussain said the MoU was of strategic importance for the country as well as for both the companies. "We are keen to work together to realise the potential of Thar coal reserves which could be the major indigenous fossil fuel resource for Pakistan's present and future energy needs. We are confident that together we would do the ground breaking work in coal exploration and coal-fired power generation in Thar region, paving the way for other developers to embark upon major infrastructure development projects." Shamsuddin A Sheikh said: "Thar Coal is a project of national security as it will bring the much needed energy security to propel the nation into an era of prosperity and development. SECMC's Thar Block-2 alone can produce 5,000 MWs for next 50 years that amounts to an estimated forex savings of dollars 50 billion for the life of the project. This project will demonstrate maturity and capability of corporate sector to join hands and synergise on national agenda." Both KESC and SECMC were of the opinion that the MoU would serve as the base for a mutually beneficial partnership for future progress in the power sector and bring prosperity to the population of Pakistan. The two companies acknowledged that Thar coal has the potential to address the country's severe power shortage and bring energy security which is indispensable for economic growth. Thar Coal Power Project aims at providing affordable and sustainable electricity to consumers using domestic resources. Reliance on indigenous fuel is likely to save billions of dollars in foreign exchange currently spent on import of expensive refined furnace oil reducing the overall cost of power generation. The launch of power generation from Thar coal-based plants would start a new era that would not only enhance the availability of electricity in the country but also make it easier for industrial, agricultural and commercial sectors to boost their production. Additionally, availability of Thar coal for coal-fired power generation would help create new jobs and achieve energy security.-PR

Copyright Business Recorder, 2013

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Wapda completes engineering design of Bunji hydropower project

The Pakistan Water and Power Development Authority (Wapda) has completed detailed engineering design and tender documents of the 7100 megawatt - Bunji hydropower project, and will soon initiate the process to undertake construction of this largest hydropower project in Pakistan. Wapda Chairman Syed Raghib Abbas Shah expressed these views in a meeting with Gilgit-Baltistan Chief Secretary Sajjad Saleem Hotiana here at Wapda House on Monday. The meeting was held to discuss various Wapda projects located in GB. Speaking on the occasion, the chairman said that the mega projects such as Bunji and Daimer Basha Dam will not only help stabilise national economy but also usher in an era of social and economic development in Gilgit-Baltistan. He appreciated the co-operation being provided by the GB government in implementing Wapda projects in the region. He further said that Wapda will fulfil all its commitments vis-à-vis construction of the projects and resettlement of their affectees. Later, implementation status of the decisions taken on January 17, 2013 was discussed in detail. The meeting was informed that GB administration will complete the ground survey as well satellite imageries for geographical mapping of Diamer Basha Dam project in two weeks. The matter pertaining to handing over government land to Wapda also came under discussion. The chairman said that in view of the significance of resettlement of Diamer Basha Dam project's affectees, priority should be given to acquire land for construction of the model villages in the area. Deliberations were also made about Satpara Dam, Harpo, Bashoo and Phander hydropower projects. It was decided in the meeting that a study will jointly be conducted by Wapda and GB to address the issues relating to Satpara Dam. The study will also assess the future requirements of water in Skardu and adjacent areas, their fulfilment through Shatung Nullah, its environmental impact and a way forward for the purpose. The meeting also agreed to devise a perpetual operation and management (O&M) methodology for Satpara Dam project with active involvement of GB.

Copyright Business Recorder, 2013

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Energy sector: Nawaz pledges to bring investment

Pakistan Muslim League-Nawaz (PML-N) President Mian Nawaz Sharif on Saturday said his party has a clear energy vision to ensure that gas and electricity can be supplied to all urban and rural consumers continuously at an affordable price. "We have made planning to also ensure that energy resources are allocated through regulated market forces and not for personal financial gains of the powerful. Large-scale investment in the energy sector can create thousands of new jobs and contribute to social, educational, economic and industrial development," Nawaz said while addressing the party workers at his Raiwind residence. Nawaz said the multi-dimensional energy crisis, which posed manifold challenges for the government, people and industry, will require effective and sustainable solutions through short-term measures and medium-term plans which must be undertaken in a co-ordinated manner; not just plan to fill the gap of 6,000MW capacity that exists today, but plan for the increased demand that our growing population and growing economy will generate. According to him, reliable and reasonably priced energy is vital for the economic and social development of Pakistan. The PML-N leader said they believe in rendering selfless services to the masses and after coming into power, we would devote all energies for betterment of people and uplift of the country. It may be noted that the annual cost of load-shedding was estimated in 2010 at Rs 500 billion ($5 billion), a loss of a million jobs and at least $2.8 billion reduction in exports. Despite 65 years of independence, the nation is facing a shortage of over 6,000MW and at least 40 per cent of Pakistan''s population does not have access to electricity. Nawaz said that his party will develop alternative renewable energy sources, such as solar, wind, bagasse, biogas, and biomass projects, especially for off-grid and micro-grid applications. We would also introduce Net Metering System for small electricity consumers. The PML-N believes that the situation for natural gas is even more worrisome, where only a fifth of the population has access to piped natural gas, and there are long and sustained periods in winters when gas is not available in many parts of the country. With current trends the total gas production will fall from the present level of around 4,000MMCFD to only 1,000MMCFD by the year 2024-25. This will require import to cover 80-85 per cent of the gas required in the country. Urgent steps are therefore needed to develop new gas fields and import infrastructure. The PML-N in its Election Manifesto 2013 has identified the following five glaring failures of the PPP government: a) The PPP led coalition has almost doubled electricity prices in the past four years to eliminate subsidies but because of poor governance and inability to improve the efficiency of the energy sector, the losses have actually increased and the energy crisis has become more serious. Production, transmission and distribution losses have increased and the distribution companies have been unable to recover their full dues (arrears estimated at Rs 499 billion in 2012) or reduce theft of electricity. This has led to a chronic so called ''circular debt problem'' of Rs 500 billion in 2012. b) The PPP government has not been able to modernise existing thermal units to improve their generating capacity which was possible at relatively low cost. Instead, it opted for several high cost rental power projects to add very expensive electricity to the system. c) There has been virtually no progress in attracting investment in the energy sector, especially in hydel or coal based projects to correct the fuel mix. d) For the first time, Pakistan has experienced the menace of gas load shedding. Yet the government has neither increased the speed of gas exploration nor made concrete efforts to import gas. e) Overall lack of competence and the political will to address the sufferings of people of Pakistan as reflected in political appointments instead of merit-based selections in Public Sector Enterprises and the inability to reduce losses and recover arrears. The PML-N manifesto also envisages to tackle circular debt and system losses on priority in order to end load shedding in minimum time and in 5 years there will be a market for wholesale trade of electricity and most importantly consumers, using the distribution network of the local Discos and the transmission network of the national grid will be able to buy electricity from their preferred producer. And once there is enough competition in the market, neither government guarantees nor government subsidies will be required and prices will start to go down as they have in the mobile telephone market.

Copyright Business Recorder, 2013

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South Korean envoy, Wapda discuss water, hydropower projects

Ambassador of South Korea to Pakistan Choong Joo Choi called on the Pakistan Water and Power Development Authority (Wapda) Chairman Syed Raghib Abbas Shah here at Wapda House on Friday and discussed the water and hydropower sectors related matter with him. Speaking on the occasion, the Chairman said that Wapda is implementing a comprehensive plan for optimal utilisation of the water and hydropower resources in view of increasing needs of water and electricity in the country. Apprising the Ambassador of more than 20 projects with cumulative power generation capacity of 20,000 low-cost electricity and water storage capacity of about 12 million acre feet, he said that these projects offer excellent investment opportunities to the foreign as well as local firms because of their high rate of returns. Referring to the two Memoranda of Understanding (MoU) signed among Korean firms, Khyber Pakhtunkhwa and Wapda in December last year for developing the 496MW-Lower Spat Gah Hydropower Project and the 665MW-Lower Palas Valley Hydropower Project in public private partnership mode, the Chairman said that Korean financial institutions and construction companies will also be facilitated in accordance with the laws to join other projects in water and hydropower sectors. He expressed the hope that the level of cooperation among Korean firms and Wapda will be further enhanced in the days to come. The Korean Ambassador, expressing interest in various Wapda projects, said that his country is keen to support Pakistan in developing the water and hydropower resources. He further said that South Korea is interested to capitalise on the opportunities available in the two sectors in Pakistan for mutual benefit.

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Tajikistan seeks to invest in power, energy sectors

Ambassador of Tajikistan, Sher Ali S. Jononov called on Sohail Wajahat Siddiqui, Minister for Petroleum and Natural Resources and discussed issues related to energy and power sector. Tajikistan is the major player in the oil sector with proven oil reserves of 39.828 billion barrels in 2012. The country has natural gas production of 27.25 billion cubic meters and consumption of 19.77 billion cubic meters making it a net gas exporter. Tajikistan has shown keen interest in investing in oil and gas exploration and production sectors of Pakistan. They are keen to bridge over energy shortfall of Pakistan. They offered to provide 3,000 mega watts of electricity. For this purpose, they offered to construct a 27-km long transmission line from Tajikistan to Pakistan. They also offered to set up a grid station on Pakistani side.-PR

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Two-day POGEE conference begins in Lahore

Introduction of latest technological techniques and equipment was of major focus in the display of the 11th international exhibition for the energy industry - POGEE 2013, which was inaugurated on Thursday at Expo Centre, Lahore. New and innovative equipment like solar panels, solar pumps, solar lamps, transformer protection, transformer fittings, oil field equipment and other related products from China, Japan, Russia, France, Italy and Switzerland have been presented at the show. Pegasus is one of the leading events organising company of Pakistan and it is an honour for them to consecutively hold 10 successful editions of POGEE. Eleventh edition of POGEE exhibition has been organised in Lahore first time and has gained a good number of visitors. Officials from Lahore, federal cabinet, diplomats, industry professionals, sector chiefs, decision/policy makers and other public and private sector officials visited the exhibition and appreciated the efforts of organisers as well as exhibitors and visitors for producing a conducive networking environment. The exhibition has gathered more than 230 local and international companies from 33 countries. A large number of professional visitors witnessed the technologies and products at display.-PR

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ABB to showcase energy efficient equipment at POGEE

ABB, the leading power and automation technology group, is set to showcase energy efficient equipment for the oil, gas and power industries. The 11th International Pakistan Oil Gas Energy Exhibition (POGEE) takes place from May 30 to June 01, 2013 at the Lahore Expo Centre. ABB's interactive display will exhibit medium voltage panels, motors, drives, programmable logic controllers (PLC) and control products. In addition, the stand will display a selection of products from the KNX technology range - a smart control system used in buildings that helps to increase flexibility, security, economic efficiency and convenience. ABB can also help industrial and utility customers to improve energy efficiency by providing specialists to audit energy use and identify areas for improvement, providing equipment, systems and solutions to use energy more efficiently. ABB experts will be on hand to talk visitors through the latest technology on the market - from advanced automation and electrical product systems and solutions tailor made for the oil and gas, power and other allied industries. Visit ABB's booth in hall 2 for the chance to exchange views with ABB experts and to see the latest cutting edge innovations, solutions, products and services from one of the world's best engineering companies.-PR

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International Exhibition for Energy Industry-POGEE 2013 from 30th

11th International Exhibition for the Energy Industry-POGEE 2013 is scheduled from May 30 to June 01, 2013, at Expo Centre, Lahore. The exhibition is geared up for an extensive display of technological advancement and innovative services and is attracting a good number of visitors from cities like Faisalabad, Sialkot, Gujranwala, Rawalpindi, Muzzafargarh, Shaikhupura, Multan, Lahore and Karachi. Around 200 companies from more than 30 countries are participating in the show including with a majority from China, Germany, UK, Iran, India, Italy, Japan, Pakistan, UAE and USA. The exhibition provides an opportunity to bring together the international business professionals and the leading local industry players to exchange their technical and business expertise to acquaint the local industry with the latest developments in the energy sector. Besides, the 9th International Conference for Oil, Gas and Energy Industry will be held in concurrence with the exhibition, featuring two exclusive sessions on "Securing Pakistan Energy Future: Options and Solutions". The eminent speakers and delegates are participating from Finland, France, India and Saudi Arabia. The conference will address current and future energy challenges along with the recommendations that will be provided by the prominent speakers, related to innovative options and solutions. This globally recognised platform anticipates that participation of each individual brings benefit and success in their businesses and enables the country to move a step forward towards its economic growth.-PR

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India willing to join IP gas pipeline

India has once again shown interest in joining the Iran-Pakistan (IP) pipeline project after 6 years, sources associated with IP project told Business Recorder Wednesday. According to sources, the Indian government along with Pakistan in 2007 had agreed with Iran to pay a price of $5 per Million British Thermal Unit (mmbtu), but Delhi subsequently withdrew over price and security concerns. The gas price under the Iran-Pakistan (IP) pipeline project is now being offered at around $11 per mmbtu - $6 per mmbtu more than what was offered in 2007. According to officials "India and Pakistan have not yet discussed the transit fee. However, a ballpark figure for Pakistan would be in the range of $400-$500 million annually in transit fees." The total length of IP project is 2,500 kilometres of which 1,100 kilometres is in Iran, about 800 kms in Pakistan and in case of agreement with India another 600 kms in Indian territory. This project is expected to greatly benefit energy-deficient India and Pakistan. "National Engineering Services Pakistan (Nespak) has already designed the pipeline corridor for extending the pipeline to India. Within the next few months, Nespak along with its partner German company ILF would supervise the construction of the pipeline," an official of Nespak working on the project told Business Recorder. Pursuant to the government to government Co-operation Agreement, Iran has nominated Tadbir Energy Costar Iranian Company (TEGIC) to undertake complete Engineering, Procurement, Construction Financing (EPCF) work for the first segment of the pipeline at a cost of $250 million starting from Iran Pakistan border. Iran also nominated TEGIC for the second segment of the project and agreed to consider increasing the financing facility by allocating another $250 million subject to their involvement in distribution of gas in Pakistan to be discussed later.

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Production of tight gas likely to begin in July-August

Pakistan is expected to start producing 30 Million Cubic Feet per day (MMCFD) of tight gas in July-August this year from Sajawal Gas field located in District Dadu, it is learnt. According to Petroleum Ministry officials this will be the first ever tight gas production in the country, wherein total tight gas reservoirs stood at 40 Trillion Cubic Feet (TCF). As per official estimates, Pakistan has huge reservoirs of shale and tight gas. The US Energy Information Administration has estimated the shale gas reserves in Pakistan at 51 Trillion Cubic Feet (TCF), low BTU gas reserves 2 TCF and that of tight gas at around 40 TCF which makes them larger than the existing natural gas reserves. The first ever tight gas Sales and Purchase Agreement was signed on November 13, 2012 in Islamabad for first production from a tight gas reservoir in Pakistan from Kirthar Block in Dadu, Sindh. The Kirthar Block is jointly owned by Polish Oil and Gas Company (PGNiG) (70 percent) and Pakistan Petroleum Limited PPL (30 percent). If exploration and extraction is on schedule, SSGC will receive 30MMCFD gas into its system through two Kirthar Block wells. For the implementation of this project, SSGC has been awarded a contract of Rs 235 million for the construction of 52-km pipeline from Kirthar Block''s Rehman Gas Field which will be integrated into SSGC''s system at Naing Valve Assembly through the Bhit Gas pipeline. The government in 2012 approved a new exploration policy, with improved incentives, as compared to the 2009 policy. Even offering higher prices for shale and tight gas to the exploration companies, it is estimated that Pakistan would pay a maximum of $6.50/MMBtu for gas compared with $11/MMBtu for imported gas from Iran and $13/MMBtu from Turkmenistan and $18/MMBTU of Liquefied Natural Gas (LNG). As per 2012 exploration policy "Exploration and Production (E&P) companies are being offered 40-50 percent higher prices for the extracted gas compared with the $4.26/mmbtu price announced in Exploration and Production Policy 2009. Companies which succeed in recovering gas from tight fields within two years would get 50 percent hike over the 2009 price and, if it takes more time, they will get only 40 percent hike on the 2009 price. As an added incentive, the leases for the fields will now be for 40 years, instead of 30 in the 2009 policy". Apart from this, PPL in collaboration with ENI is set to start for the first time drilling of exploratory well in Sindh''s deep sea in 2014. In this regard, around seven exploratory wells, eight appraisal wells, and 19 development wells have been planned for discovering shale and tight gas in Sindh in the next five years. Tight gas reserves have also been identified in the existing development and production leases granted to various E&P companies operating in Pakistan. Main tight gas regions identified are Kirthar Foldbelt located in Dadu, Sindh, Sulaiman Foldbelt (located in Balochistan), Potohar region in Punjab and offshore areas near Karachi. Pakistan is particularly heavily dependent on natural gas for its energy needs. At present actual demand for gas is around 8 Billion Cubic Feet (BCFD) per day, while constraint demand is also hovering around 6 BCFD against total supply of 4.3 BCFD. To encourage investment in developing domestic shale gas, Pakistan has approved a new exploration policy with improved incentives as compared with its 2009 policy. Pakistan Petroleum is now inviting fresh bids to auction licences to explore and develop several blocks in Dera Ismail Khan (KPK), Badin (Sindh), Naushero Firoz (Sindh) and Jungshahi (Sindh).

Copyright Business Recorder, 2013

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New gas reservoir of 33mmcfd discovered

Pakistan discovered a new gas reservoir with a daily production of 33 million cubic feet (mmcfd) in Kirthar Block, Dadu district. The new gas discovery has been made by Eni Pakistan in joint venture with the Pakistan Petroleum Limited (PPL) and Kuwait Foreign Petroleum Exploration Company (KUFPEC). This was stated by Qazi Saleem Director General (DG) Petroleum Concessions (PC) while giving a briefing to Petroleum Minister Sohail Wajahat Siddiqui, here on Friday. The Landali-I is a 2,660 meters deep well. During the production testing gas flowed at 33 million cubic feet per day (mmcfd) highlighting an excellent potential for the future for energy needs of the country. It was further informed that the discovery will be appraised and sub-sequentially commercialised through an early production scheme, making possible gas supply within three years. The Minister for Petroleum & Natural Resources appreciated the efforts of DG (Petroleum Concessions), Eni Pakistan and its partners on the discovery of new gas reservoirs, saying that this discovery is good news for the nation and the energy sector of Pakistan. The minister observed that the discovery of new oil & gas reservoirs was vital to cope with the prevailing energy shortage in the country. The minister expressed the hope that this new gas discovery will help meet the energy demand of the country. The gas consumption has increased from the year 2000 onwards on a massive scale. Initially, domestic users were consuming 32 percent of the total gas supply, general industries 24.9 percent, power sector 22 percent, commercial users 5 percent and the CNG sector 4 percent. However, the ratio has now been changed with domestic consumers using 26.07 percent, power sector 15.9 percent, CNG sector 11.85 percent, fertilisers 7.82 percent and the commercial sector 4.75 percent. It was stated that the shortfall was already 625 million cubic feet, which is likely to increase to a record level of 1,000 cubic feet this winter. Due to gas shortage four fertiliser plants on SNGPL''s system - Engro Fertiliser, Pak-Arab Fertiliser, Agritech and Dawood Hercules - are closed since 2011, as per contracts SNGPL is bound to supply 100 Million Cubic Feet per Day (mmcfd) gas to Engro, 55 mmcfd to Pak-Arab, 45 mmcfd to Agritech and 50 mmcfd to Dawood Hercules. Meanwhile, Minister for Petroleum Sohail Wajahat has said that concerted and all-out efforts are needed to address the issues of energy crisis faced by the industry. He said this while chairing a meeting on gas pricing mechanism for the fertiliser sector under the Fertiliser Policy-2001. The minister said uniform rates of gas pricing for the industrial sector needs to be introduced to eradicate discriminations among different sectors. "However, all the stakeholders will be taken into confidence before introducing any such mechanism." the minister assured. He suggested "As energy and industrial sectors are interdependent, the win-win solution will be that both sectors make small adjustments for optimal utilisation of the available resources". The minister emphasised that national interest was the prime consideration of the present interim government, therefore, decisions are taken with the main purpose in view that the entire nation benefits from them. He reiterated the fact that the energy is the key input for the industrial sector therefore, its just and even distribution is vital for the industry to thrive. "Only a developed and blooming industrial sector can ensure the economic wellbeing of the nation as a whole," he added. The senior officers of the Ministry of Petroleum and the heads of all the fertiliser companies attended the meetings.

Copyright Business Recorder, 2013

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