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News Headlines for the month of
FEBRUARY 2014

Norwegian companies urged to invest in energy sector

Special Assistant to the Prime Minister on Foreign Affairs Syed Tariq Fatemi on Tuesday reiterated Pakistan's commitment for Afghan-owned and Afghan-led reconciliation process which is imperative for lasting peace in the region. He was talking to Director General, Department for Regional Affairs and Development at the Norwegian Ministry of Foreign Affairs Tore Hattrem who called on him after the eighth round of Political Consultations between Pakistan and Norway here at Foreign Office. According to Foreign Office spokesperson Tasnim Aslam, the Special Assistant to the Prime Minister briefed Tore Hattrem and his delegation on Afghanistan. He stressed upon the need of Afghan-owned and Afghan-led reconciliation process which is imperative for lasting peace. "The present government desires a stable Afghanistan, which is absolutely essential for peace and stability in the region", Fatemi said. Fatemi also briefed the visiting delegation about Pakistan's energy needs and called upon the Norwegian companies to invest in Pakistan's energy sector. He stated that Norwegian Telenor holds a major chunk of the telecom market in Pakistan with investment of more than US $2 billion. Tore Hattrem, thanked the Special Assistant to the Prime Minister for his exhaustive briefing on Afghanistan and stated that he would forward the message for Norwegian companies to invest in Pakistan's energy sector. Earlier, eighth round of Bilateral Political Consultations was held at Foreign Office in which Pakistan side was led by Nadeem Riyaz, Additional Secretary (Europe) and the Norwegian side was headed by Tore Hattrem, Director General, Department for Regional Affairs and Development at the Norwegian Ministry of Foreign Affairs. During the consultations, the two sides reviewed the entire gamut of bilateral relations. They also looked into the possibilities to further deepen the existing ties in various areas including trade, commerce, investment, education, energy and cultural co-operation. Discussions also focused on global and regional issues including India, Afghanistan, Syria and Iran. It was also agreed that the next round of Political Consultations will be held in Oslo next year at mutually convenient dates.

Copyright Business Recorder, 2014

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Power crisis to be overcome with China's help: Shahbaz

Chief Minister Punjab Mian Muhammad Shahbaz Sharif said load shedding crisis in the country will be eliminated with the co-operation of Chinese government and investors. In a communiqué issued from Chief Minister House on Saturday, after return of Shahbaz Sharif from four-day Chinese visit, the Chief Minister said important meetings were held with representatives of Chinese companies and private investors. He said during his visit energy crisis as well as enhancing bilateral co-operation in different sectors and boosting trade volume were also discussed. Shahbaz termed his meetings with Chinese President, Prime Minister, high officials and investors as positive and fruitful.

Copyright Independent News Pakistan, 2014

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Prime Minister to open Guddu project in March: up to 2,000 megawatts power to be inducted in system this year: Abid

State Minister for Water and Power Abid Sher Ali on Saturday said that 1,500 to 2,000 megawatt (MW) electricity would be inducted in the system during the current year and Prime Minister Nawaz Sharif will inaugurate the first phase of Guddu power project in the first week of March, which would generate 242MW power. Addressing the member of Pakistan Cotton Ginners Association (PCGA) on Saturday, he said Guddu power project would be commissioned in 2015 but "we would complete all the three phases in nine months before the schedule and it would generate 747MW electricity." He lashed out at the previous government for its indulgence in rental power scam and Ogra scam. The minister said "I have suspended the Executive Engineer and SDO of Dera Ghazi Khan who were involved in criminal connivance of power theft and 32 cases were instituted in Shadan-Lund town who were stealing the electricity." He claimed that about electricity worth Rs 242 billion was being pilfered, and the same amount of subsidy was provided to consumers each year across the country. He further said 99.9 percent electricity was being pilfered in Larkana, KPK and Sukkur Electric Supply company region. He said legislation against power theft had been approved by the Parliament, providing for Rs 2 million fines with two to three years imprisonment for power pilferers. He said there was 18 to 20 hours loadshedding in the past, which had been reduced to six to eight hours by the government efforts. He said for the first time in the country's history, a campaign was launched against power thieves, which was not against any particular district or province. He said about 10 million power units were saved after crackdown against power theft in Larkana. Abid Sher said there were reports of many incidents of power theft in KP and cases have been registered in this regard. He pointed out 90 percent electricity was being allegedly stolen in area of Shah Farman, provincial minister of KP province. He lamented that the minister was making protest instead of following the rules. He assured that in upcoming summer, power outage would be reduced to six to eight hours. However, load shedding may be increased to 20 to 22 hours in the areas with huge line losses. The minister said "we have challenged the judgement of Peshawar High Court in the Supreme Court in which court had fixed low-tariff for the people of KP." He said recovery of Rs 60 billion had suspended due to this verdict. Consequently our circular debt increased. He also assured to redress the grievances of the Ginners. In his address, Vice Chairman Muhammad Aasim Sheikh said ginners were neither power thieves nor defaulter of Mepco and they were paying Rs 42 billion taxes per annum. Ex-vice chairman Shehzad Ali Khan said the government should ensure uninterrupted supply of power to 1,250 ginning factories of the country. This industry was not involved in power theft. He suggested legislation against the seed and fertiliser mafia, which was fleecing the farmers with both hands besides destructing the country's agricultural economy. Chairman of PCGA Mukhtar Ahmed Khan Baloch highlighted the problems faced by the ginners and demanded for granting representation in board of management of Discos.

Copyright Business Recorder, 2014

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Pump-making factory opened: solar energy based RO plants to help resolve ater, power crises: chief minister

The Chief Minister Sindh, Syed Qaim Ali Shah, has said that introduction of solar energy based RO plants technology was innovative and revolutionary step towards sustainable development to meet out the drinking water and energy crises This he said while inaugurating, solar energy based RO plant pumps manufacturing factory, established by Pak-oasis and Denmark oriented groundFos companies under joint venture at Korangi site area on Friday, says a press release. Addressing the ceremony Shah said that this innovative step would enable the Sindh Government to convert its at least 1500 RO plants, mostly in desert area of Tharparker Distt, into solar energy based to ensure sweet and safe drinking water facilities to the people of these back ward areas. He said that the introduction of solar energy based RO Plant pump here in Sindh was very much important because it reduces operational cost of RO plant as well helps provide uninterrupted power and water supply to the people. Shah said that following the torrential rain in 2010-2011, more than 75percent underground water in Sindh has became brackish / saline and unsuitable for human consumption. He said that this is the main reason behind the spread of water born diseases among the people. He said that Ex-President Asif Ali Zardari was the first to take notice of public complaints about the brackish water and ordered for installation of RO plants specially at the drought areas of distt Tharparker and we initially installed 88 RO Plants but latter on widened this scheme and raised this number upto 1200 RO Plants and now to 1500 mostly in Tharparkar. He said this problem was also being faced by people of Karachi as well and Sindh Government was in consultation with foreign investors to introduce maximum number of RO Plants in Karachi as well. He said that recently in meeting with the Ambassador of Denmark, this matter also came under discussion. He said that after law and order, provision of safe drinking water and uninterrupted power supply was the main important issues of Karachi and we are going on to address these issues with the help of modern technology. The CM said that though Sindh Government is doing its best in this regard but active participation from the private sector is more essential to achieve the targets. He said that this initiative of manufacturing solar energy based RO plants here at Karachi was a good step towards sustainable development in the province and added that Sindh govt was also encouraging the private sector under public private partnership (PPP) mode of development in the province. He called up on the local and foreign investment agencies to come forward and invest in different sectors having good potential to harvest benefits.-PR

Copyright Business Recorder, 2014

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Infrastructure, energy projects: Nawaz invites General Electric to extend cooperation

Prime Minister Nawaz Sharif has said that the investment friendly policies of government provide tremendous opportunities to investors. Prime Minister said this while talking to a 5 member delegation of M/s General Electric (GE) Company led by John G Rice, Vice President/CEO of the company. The meeting discussed opportunities for public private sector collaboration on infrastructure and energy projects, with a particular focus on enhancing power generation, energy sector efficiency and power sector diversification. John Rice highlighted the advanced technologies offered by GE to address the country's requirements. Prime Minister Nawaz Sharif said that GE has long association with Pakistan, as the country has been benefitting from the experience and expertise of the company. PM was told that GE has been actively working towards completion of several Power Generation Projects including Nandipur (525MW) & Guddu (747MW). PM highlighted the major power sector initiatives by the government and invited GE to invest in other power projects, which are in the pipeline. He invited GE to extend its co-operation for various power projects such as Chichoki Malian Combined Cycle Power Plant, Grange Power Limited Combined Cycle IPP and Re-vitalisation of GENCO-III Power Plants located at Shahdara, Faisalabad and Multan. Prime Minister told that government has embarked upon the plan for the revival of Pakistan Railways in this regard a revival package for Railways has been approved by the government. He invited GE to avail this potential business venture. John Rice said that we are proud of our long history and the established partnerships we have built in Pakistan. By combining the latest advanced technologies with local solutions, we are working with our partners towards the development of key infrastructure projects that will support current and future needs, and contribute towards the economic development and progress of the country, Rice added.

Copyright News Network International, 2014

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$183 million export credit, power project deals signed

Pakistan and Saudi Arabia on Monday signed two agreements on export credit facility of $125 million for purchase of urea from Sabic and $58 million funding by Saudi Fund for Development of Golen Gol Hydropower Project in Chitral. Prime Minister Nawaz Sharif and Crown Prince Salman Bin Abdul Aziz Al-Saud witnessed the agreements signing ceremony between Secretary Economic Affairs Division Nargis Sethi from the Pakistan side and Vice Chairman and MD Saudi Fund for Development Yousaf Ibrahim Albassam, from the Saudi side signed the agreements, according to a statement. The Saudi Crown Prince called on Prime Minister Muhammad Nawaz Sharif at PM House. Federal Minister for Finance Ishaq Dar and Punjab Chief Minister Shahbaz Sharif were also present on the occasion. Both leaders discussed matters relating to mutual interest. The Prime Minister said Pakistan and Saudi Arabia enjoy brotherly relations and have similar views on regional as well as international matters. Pakistan supports efforts of Saudi Arabia aimed at strengthening unity among the Islamic countries, he added. Both leaders expressed the desire to further strengthen co-operation in various fields for the promotion of the cause of Muslim Ummah as well as international peace and stability. Nawaz said Pakistan holds Saudi Arabia in highest esteem and the relations between the people of both the countries are more than fraternal. The Prime Minister said the large Pakistani community in Saudi Arabia serves as a bridge between the two brotherly countries and plays a positive role in the development of Saudi Arabia as well as Pakistan''s economy through annual remittances of over $4 billion. The Saudi Crown Prince expressed his gratitude to the Prime Minister for the hospitality shown to him and his delegation during the visit. Later, Prime Minister hosted a dinner in honour of the visiting dignitary and his delegation.

Copyright Business Recorder, 2014

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Capacity of 772.9MW: around 22 solar projects likely to be operational by 2015-16

Around 22 solar power projects, having cumulative capacity of 772.99 MW, are under different stages of development and can achieve commercial operation by 2015-16. These projects will achieve commercial operation by stipulated period subject to availability of Grid by National Transmission & Despatch Company (NTDC) and announcement of tariff by National Electric Power Regulatory Authority (NEPRA) Sources at Alternative Energy Development Board (AEDB) said the department is pursuing and facilitating the development of Alternative and Renewable Energy (ARE) based power projects through private sector. The ARE projects based on wind and solar energy are being developed by private sector on Independent Power Producer (IPP) mode. Moreover, the sources said two wind power projects of 49.5 MW and 56.4 MW capacities, respectively, are operational while three wind power projects of 150 MW capacities in total are under construction and expected to be completed this year. They said another 13 wind projects having a cumulative capacity of 680 MW are at advance stages and ready to achieve final closing in 2014. The sources said AEDB is promoting use of solar technology at domestic level for adding that the private sector is already sing solar energy for domestic use for self-consumption as there is no restriction or licensing requirement. The ARE Policy allows consumers to avail features like Net-Metering and Wheeling of Energy which require interconnection with the grid, they said. Implementation of such schemes, however, require regulatory framework enabling the domestic, commercial and industrial users to carry out net-metering and wheeling using solar energy, they added.

Copyright Associated Press of Pakistan, 2014

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Turkish firm offers to set up power plant

Chinar Group of Turkey has agreed to construct a 660MW power plant at Gaddani and offered to start work immediately. Chief Executive Officer, Chinar Group called on Prime Minister Nawaz Sharif on Friday. The PM welcomed Chinar Group's investment in Pakistan and assured full facilitation. Moreover, Chinar Group also showed keen interest in investment in coal and copper mining in Pakistan.

Copyright Independent News Pakistan, 2014

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Coal, solar power projects: Shahbaz seeks more cooperation from ADB

Punjab Chief Minister Shahbaz Sharif has said that Asian Development Bank (ADB) in addition to small hydel projects should also consider co-operation in coal and solar power projects. He was talking a delegation of ADB on Thursday. Matters regarding promotion of co-operation between Punjab government and ADB in various sectors were discussed on the occasion. Shahbaz said that government is making sincere efforts for coping with the challenges of extremism and shortage of electricity. He said that resolving of energy crisis is essential for promotion of agriculture and industrial sectors as well as strengthening of economy. He said that Punjab government is implementing a big project of generation of electricity from coal under which coal-based power plants will be set up at six places in the province. He said that Punjab government is setting up a coal-fired 1,320 megawatt energy plant in Sahiwal with its own resources. The Chief Minister said that the aim of progress and development cannot be achieved without overcoming shortage of electricity. He said that government is giving top priority to resolving of energy problem and work is being carried out speedily on power generation projects. He said that there are vast opportunities of generation of hydel power and construction of small dams and Punjab government and ADB can further promote co-operation in this regard. He said that energy crisis has caused an immense loss to national economy and the government is focusing on rectifying this situation. He said that Punjab government is setting up a 100 megawatt power project at Quaid-e-Azam Solar Park Bahawalpur with its own resources while work is also being carried out on the projects of generation of energy from biogas and biomass. He said that Nandipur Power Project is being executed swiftly. The Chief Minister said that a comprehensive programme is also being implemented for the development of infrastructure and improvement of transport system. He said that metro bus project has been completed in a very short time for providing comfortable, speedy and economical transport facility to the masses. He said that about 170,000 persons travel by metro buses daily. He said that Punjab is a big province of Pakistan, having a population of 100 million, and the provincial government is implementing a comprehensive programme for provision of respectable job opportunities to the youth and including them in the process of national development through imparting them various skills. Vice President ADB Wencai Zhang said that metro bus project is a splendid achievement of Chief Minister Shahbaz Sharif and the delegation is very much impressed with him determination and commitment. He said that co-operation with Punjab government will be promoted in different sectors.

Copyright Business Recorder, 2014

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Shahbaz hails pace of work on Nandipur power project

Punjab Chief Minister Shahbaz Sharif has said that the pace of construction work on Nandipur power project is surprising and the project which was a symbol of inefficiency, corruption and criminal negligence of the former rulers, has been transformed into a glowing example of commitment and performance of the present leadership. He was talking to media after reviewing the pace of construction work on Nandipur Power Project, Gujranwala, here on Thursday. Project Director, Captain Mehmood Ahmad (Retd) and Plant Manager of Dang Fang Corporation Limited China, Chen You Ping gave a briefing on the project. Expressing his pleasure on the pace of work on the project, the Chief Minister said that when he came to this place three months ago it was vacant but now a number of plants have been installed and it seems that the workers are working with a missionary spirit and striving to rid the people of the scourge of loadshedding as early as possible. He said that police, civil administration, Chinese and Pakistani engineers and the workers deserve all appreciation and credit for their efforts.

Copyright News Network International, 2014

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EIB to extend euro 100 million credit to Khyber Pakhtunkhwa project

Vice President of the European Investment Bank(EIB), Ms Magdalena Alverez Arza, will visit Pakistan from February 15-18 The purpose of her visit is to sign a loan agreement for a 100 million euro credit for the Kheyl Khwar Hydropower Project and also visit the project site in Pattan, District Kohistan of Khyber Pakhtunkhwa. According to an official statement of the European Union (EU), the Vice President would explore further possibilities for the EIB to play an active role in financing renewable energy projects in Pakistan. Álvarez Arza will be accompanied by Patrick Walsh, Director, Ms Sunita Lukkhoo; Country Manager, Joaquin Guzman Carrizosa; Advisor to the Vice President and Matilde Del Valle Serrano Press Officer.

Copyright Business Recorder, 2014

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Jamshoro power plant: $900 million loan accord inked with ADB

Asian Development Bank (ADB) would provide a dollars 900 million loan to Pakistan for Jamshoro coal-fired power project designed to add 1200MW relatively cheap electricity to the national grid. The loan agreement was signed by Secretary, Economic Affairs Division (EAD) Nargis Sethi and Country Director, ADB Werner Liepach and witnessed by Finance Minister Ishaq Dar and ADB Vice President Wencai Zhang. Speaking on the occasion, the Finance Minister said that through Jamshoro Power Generation Project two new supercritical coal-fired power generation units with the capacity of 600MW each would be constructed in Sindh province. He said ADB had been supportive of Pakistan and providing vital support to Pakistan specially to address the power shortage. He also stated that there was a dire need to change the current fuel mix which at present was a 75 percent furnace oil and 25 percent hydel generation. The Minister added that Jamshoro power generation project was approved by the Executive Committee of National Economic Council ahead of loan signing agreement with the ADB. He said the Country''s Strategy Paper with the ADB was also under process and Pakistan was expected to receive $3 to $3.2 billion from the lending agency in the next three to five years and US $1.2 billion during the current fiscal year including loan for Jamshoro power plant. Dar said conversion of the IPP, as planned by the government in next three to four years, would help change fuel mix to provide cheap electricity to the consumers. The government, he added, wanted to bridge power generation shortfall of 4500 MW as well as wanted to cater for enhanced demand in the medium run by taking electricity generation from 14,000MW to 22,000MW and in the long-run to 40,000 MW. In reply to a question, an official of the Finance Ministry told media that Libor plus 0.4 percent was the interest rate of the loan for Jamshoro Power generation plant. The ADB Vice President said ADB wanted macroeconomic stabilisation and economic reforms for inclusive growth in Pakistan which had great potential. He added that ADB would continue to provide support to Pakistan in energy, as well as agriculture and natural resources. "We are also working on Country Strategy Paper for 2014-18," he said, adding the conversion of IPPS in coal-fire power generation would help Pakistan save $500 million on account of fuel. In reply to a question about construction of Diamer Bhasha Dam, he said ADB had no objection about the funding, adding that the feasibility study of the USAID on the project was awaited. He said Jamshoro power generation project would add low-cost power supply and improve Pakistan''s energy mix. Diversifying to coal would help the country cut down its electricity generation cost, and reduce its oil import bill, he added. He stated that Pakistan had been facing rising oil prices and declining gas reserves as well as tight foreign account situation, rendering the reliance on the import of oil to fuel power plants which was becoming increasingly unaffordable. The country spends more than $14 billion per year on importing oil, a major part of which goes to power generation. A statement distributed to media by the ADB stated that chronic power shortages had often caused social unrest, and cost the country about two percent of its gross domestic product growth each year. A more efficient and sustainable energy mix can spur economic growth and create employment opportunities for millions. The Jamshoro power project was approved by the ADB''s Board of Directors in December 2013, which is expected to be completed by December 2018. The Islamic Development Bank will provide $220 million whereas $380 million will be contributed by the government to meet the overall estimated project cost of $1.5 billion.

Copyright Business Recorder, 2014

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Country to get benefit from solar energy this year: Chief Minister Punjab

Punjab Chief Minister Shahbaz Sharif dilating on their PML-N government endeavour on productivity of electricity stated in the Punjab Assembly Session Tuesday that country would benefit from solar energy this year. Dilating that with LGM gas coming period October-November, Nandi Pur first turbine would also be operative in the current year. Chief Minister referring to biogas projects undertaken by present government to produce electricity stated that projects of coal-based power plants would be established at five places in Punjab. He said feasibility of these areas has been done. He said electricity produced from coal would be much cheaper than electricity generated by furnace oil. Chief Minister stated that his endeavour for electricity generation would benefit Punjab by 60 percent. Referring to construction of Kala Bagh Dam he said though its viability on technical grounds is without a speck of doubt firm, still question of unity of Pakistan remained supreme near them. He averred decision on this dam would only be possible by consensus of all the provinces. Chief Minister pointed that a 12-year period and cost of $12 billion are required for construction of Basha Dam. He said keeping in view of this fact, efforts are being made for production of electricity in early period. Chief Minister highly appreciated friendship of China in giving assistance to Pakistan and termed the country as a very sincere friend. Shahbaz Sharif speaking about curtailing electricity theft in Punjab said they have moved with zeal in this direction. Leader of the Opposition Mian Mahmud-u-Rashid speaking in the House on the occasion stressed upon making changes in Thana culture in the province. He asked government to move ahead with holding local bodies' elections at the earliest. He said delay is being felt by political circles in this regard. Leader of Opposition also asked government to appoint members of opposition in district co-ordination committees. Mahmud-ul-Rashid brought attention of the government for delay in construction of new Assembly premises. He stated that this would put extra pressure on finances in this regard. Law Minister Rana Sanaullah giving his views on the speech of Leader of the Opposition averred that they are complying with orders of courts in the direction. Regarding construction of Punjab Assembly new building, he said government of Chief Minister Punjab three years ago announced that construction of public utility buildings was priority, so there was no construction contrary to this, he pointed. Earlier resolution regarding cyber crime against women allowed by the chair with amendment and a resolution for legislation regarding torture, maltreatment to servants in the houses was unanimously approved by the House. A resolution regarding giving free graves to people was kept in pending. Law Minister on the point stated that government is already not charging any price on grave. He said it has come to their notice that certain people are charging fee for maintenance of grave yards. In question period on health, parliamentary secretary health disclosed that 70-80 operations are being done in the Sir Ganga Ram Emergency. He said Burn Unit facility is already there in DHQ and THQ Teaching Hospitals. He pointed government would further make those units, if need is felt. To a query he said 693,597 blood bags were given to patients in year 2012. The Chair Rana Muhammad Iqbal before dealing with certain adjournment and privilege motions adjourned the House for today (Wednesday 10:00am).

Copyright Business Recorder, 2014

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Hydro power project: uplift work in full swing

Development work on Head Marla Hydro Power Project is in full swing and it would be completed at estimated cost of Rs 3,049.74 million. Official sources told APP here on Sunday the pace of development work on the construction of spillway and power house had been further accelerated and hopefully the spillway would be completed in April this year. The experts of a Chinese firm "SINOTEC" are supervising the development work of the project.

Copyright Associated Press of Pakistan, 2014

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Master plan for Gadani Power Park being prepared

Site and topographical surveys for Gadani Power Park have already been completed while master plan and feasibility study are being prepared to launch the project to meet energy needs of the country. According to a Ministry of Water and Power here on Sunday, the coal will not be imported for the said project during the current fiscal year. Approximately 20 million tonnes of coal will be imported per annum after commissioning of 6600 MW coal-fired complex to be completed with the co-operation of China. The National Electric Power Regulatory Authority (Nepra) is also in the process of working on upfront tariff of Gaddani power projects. The source said only two units of 660 MW each at Gadani would be installed in public sector on imported coal, which would contain less than 1% sulphur. The plant would not cause any harm to human health and the marine life as the following emission control technologies would be applied on these units. Electrostatic precipitators (ESP) particulate matters (PM), Flue Gas Desulphurization (FGD) to control Sox and Low Nox burners with overfire Air Ports and selective Catalytic Reduction (SCR) system. A stack height of 210 meter is proposed for wider dispersion of emission and thereby dilution. A higher stack will also effectively disperse the normal pollution from the stack. Properly designed wastewater treatment system will also be employed at Power Station to treat the wastewater before its disposal. Besides, the source said the government had also launched various hydro power projects of 20,000 MW and it was for the first time that Rs 250 billion had been allocated in Annual Development Programme for development of the power sector.

Copyright Associated Press of Pakistan, 2014

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Setting up of nuclear power plants along Karachi coast echoes in Senate

The installation of two nuclear power plants along Karachi coast echoed in Senate on Thursday after a government minister ignorantly stated it would affect about 5-6 kilometres areas in case of any accident. Speaking in Senate in response to a calling attention notice, Sheikh Aftab, state minister for parliamentary affairs, completely unaware of the dangers of the N-power projects, blatantly downplayed the catastrophe saying it will affect hardly 5-6 kilometres area, in case any blast or terror attack. However, he quickly added it is an advanced technology, being acquired from China, where some 30 nuclear plants are under construction while some 15 are successfully working. The minister said there is a similar project of 340MW is under construction at Chashma, adding the accident could occur anywhere, for which there is no foolproof mechanism to avoid any accident. Wah Ordinance Factory, he added, is also located in a densely populated area but we must benefit from the advanced technology. This drew the ire of the house with Senator Farhatullah Babar flaying the poor approach of the minister in examining a very sensitive issue. By making such a thoughtless statement, he added, the minister had only sown the seeds of doubt in the mind of the people and done a great disservice to the nation's nuclear program. "The minister should have assured the nation that the plants had been designed so as to withstand the blow of an aircraft rammed into it which he said was a fact...I would want the minister to withdraw his thoughtless statement or it will not send a good message about a nuclear state", he contended. This prompted leader of the house in Senate Raja Zafarul Haq to say that government is making all out efforts to make it fool proof, adding Pakistan went for this venture with China after US-India nuclear deal. He also said that apprehension shown by some quarters about the safety of the nuclear projects, are by some international powers who do not want Pakistan to benefit from the nuclear technology. He recalled when Zulfikar Ali Bhutto stepped in to make Pakistan a nuclear state, some vested interest spread similar propaganda. The same tricks are being applied here by people who do not want Pakistan to progress in the field of advanced technology, he added.

Copyright Business Recorder, 2014

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Solar Energy Park: first phase to be completed by November, Prime Minister told

Prime Minister Muhammad Nawaz Sharif visited the project site of the Quaid-e-Azam Solar Energy Park here on Wednesday. Commissioner Bahawalpur Division Captain Assadullah Khan (Retd) briefed the Prime Minister about the project. The Prime Minister was apprised that in the first phase, at a cost of Rs 17 billion, 100 MW electricity would be produced by November this year and an 11 km access road to the site has been completed whereas work on boundary wall of the park was in full swing. During the briefing, it was informed that 0.9 cusecs of clean water was being supplied to the project and electricity demand for the project was currently being fulfilled through the available 132 KV lines. First phase of this project would be accomplished by the Punjab government. Earlier, the Prime Minister had an aerial view of the Quaid-e-Azam Solar Energy Park site.

Copyright Associated Press of Pakistan, 2014

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Government, USAID working to formulate Shale Gas policy: PAC told

Ministry of Petroleum and Natural Gas Secretary Abid Saeed told the Public Accounts Committee (PAC) on Thursday that the government would formulate Shale Gas policy in consultation with USAID to encourage gas exploration in the country. He said that USAID was providing technical training for capacity building of staff besides helping the ministry in shaping Shale Gas Policy, which would be completed within a year. "The country has an estimated 1.5 TCF reserves of shale gas which need to be tapped to fill the gas demand and supply gap," he added. He said that the Ministry of Petroleum was encouraging Oil and Gas Development Company, Pakistan Petroleum Limited and other gas companies to extend their scope for the exploration of shale gas deposits. He further said that the price of shale gas might be initially determined in the range of $10 to $12, as currently the ministry was engaged in consultative meetings with Ogra on fixation of shale gas prices. "The cost of first three shale gas discovery pilot projects will determine the future prices of gas," Saeed added. A PAC member, Naveed Qamar, pointed out that the lack of provincial representation in Petroleum Concession (PC) Office might hamper the government's oil and gas exploration activities and recommended that constitutional amendments should be introduced so that sense of deprivation among provinces could be eliminated. "It will strengthen the efforts of federal and provincial governments in exploring the gas deposits," he observed. The secretary said that the Directorate General Petroleum Concession was incomplete without representation of the four provinces. "Letters have been written to all the provincial governments asking them to name their representatives so that they are made a part of the PC," he added. The committee was told that a three-member committee of the federal secretaries had failed to submit its report on evaluation and implementation of monetisation policy. Out of 54 government departments, autonomous bodies, regulators and other attached departments, 29 responded regarding the implementation status of monetisation policy of the government. The PAC directed the Cabinet Secretary to appear before the committee with a comprehensive evaluation report. The Auditor General of Pakistan (AGP) told the committee that the accounts of 1,086 development projects could not be audited. Malik Khadim Hussain, Additional AGP, said his office had undertaken the audit of accounts on the basis of vouchers and in some cases it did not receive these from the government departments. Replying to a question regarding out-of-turn favour in awarding contract by Radio Pakistan, the Additional AGP said that the audit would take place, when funds were released to the contractors. The committee directed the AGP to investigate the matter. PAC Chairman Syed Khurshid Shah, however, said that a report had been prepared by AGP, which was withdrawn.

Copyright Business Recorder, 2014

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Iran says Pakistan obliged to complete IP pipeline

Iran's oil ministry said Wednesday that Pakistan is contractually obliged to complete a major pipeline project which would allow Tehran to export gas to its south-eastern neighbour. The warning came a day after Petroleum Minister Shahid Khaqan Abbasi, said work on the pipeline was not possible because of sanctions imposed by the United States and the European Union on Tehran over its controversial nuclear drive. "Iran has carried out its commitments ... and expects the Pakistani side to honour its own," the deputy oil minister, Ali Majedi, said in a statement seen by AFP. "They should even pick up the pace of work and make up for falling behind schedule" in constructing Pakistan''s 780-kilometre (485-mile) side of the pipeline, he said. Iran, which has the world''s second largest gas reserves, says work on its side in the $7.5-billion project launched in 2010 is almost finished. But the project''s fate has faced uncertainty, with Pakistan repeatedly running into problems, including major financing issues, while being pressured by the US. On Tuesday, Abbasi told AFP that the work on the pipeline "is affected by the sanctions imposed" on Tehran. He did not elaborate on how the sanctions could derail the project. In Tehran, Majedi rejected the argument, saying the issue of sanctions was not a new development. "Pakistan faced pressure at the time of signing the deal," he said. "But fully aware of the situation and the issue of sanctions, it still signed the contract." Majedi added that the option of "bringing in a third party to finish the pipeline" had been raised in recent negotiations with Pakistani officials. He did not elaborate. Iran''s Oil Minister Bijan Zanganeh said in late October he had "no hope" for the project, after Islamabad asked Tehran for $2 billion in financing to build its side of the pipeline. That request was denied by Iran. Iran currently produces nearly 600 million cubic metres (21.2 billion cubic feet) of gas per day, almost all of which is consumed domestically. Its only foreign client is Turkey, which buys about 30 million cubic metres of gas per day. Pakistan is struggling with a severe gas crisis, with natural gas supplies running out in winters, forcing consumers to rely on liquid gas cylinders.

Copyright Agence France-Presse, 2014

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Investment opportunities in Pakistan highlighted

Javed Malik, Chair, Pakistan International Business & Investment Council, Richard Quessnal, Chairman Colt Resources Inc, Alun Richards, Chief Investment Officer, Colt Resources, Shahal Khan, Royal Partners Energy & Colt Resources Inc, Nicolas Perrault, Director Calvalley Petroleum, Pedro Costa, Managing Director Banco Espirito Santo, Yazit Yusuff, Head of Capital Markets, RHB Islamic Bank, Haji Malik Shah, Colt Resources and Waleed Mushtaq, Pakistan International Business & Investment Council called on Special Assistant to Prime Minister & Chairman Board of Investment, Dr Miftah Ismail and Secretary BOI, Imran Afzal Cheema to discuss about investment opportunities in Pakistan. Chairman BOI said that the aim to transform Pakistan into a regional hub of commerce, trade and investment by establishing an economic and trade corridor through linking Gwadar seaport with Kashgar in China. The government has appointed a Special Envoy for attracting overseas investment in Pakistan in collaboration with Board of Investment (BOI) and the line ministries. "BOI is moving towards one-window operations. The aim is to offer constructive policy parameters for removing unnecessary regulations and minimising the cost to business by necessary regulations. Creation of Special Economic Zones (SEZs) is a step in this direction" Secretary BOI, Imran Afzal Cheema told. SAPM/Chairman BOI shared that it is heartening to note that Pakistan has 7th largest stocks of Coal lignite and this stock can fulfil energy requirements of Pakistan for next 300 years. Javed Malik said that as the composition of the delegation shows that the main sectors of interest are energy, mineral and banking. Richard Quessnal said that Pakistan has great natural reserves and we want to work on profit sharing basis by empowering the people of Pakistan. The company is also visiting Balochistan to talk about the investment in copper reserves there. Later, in a press conference, Javed invited foreign investors to invest in Pakistan as there are great opportunities of investment in various sectors of economy. He said the foreign companies are showing keen interest in investing in Pakistan.

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PSO, Qatargas cut confidential LNG deal

Pakistan State Oil (PSO) has reportedly executed a confidential agreement with State of Qatar designated entity Qatargas Limited on supply of Liquefied Natural Gas (LNG), reveal official documents available with Business Recorder. These documents were presented before the Economic Co-ordination Committee (ECC) of the Cabinet on Wednesday. "For LNG supply, Ministry of Petroleum and Natural Resources has nominated PSO as its designated entity for negotiating LNG Sale Purchase Agreement (LNG SPA) with State of Qatar''s designated entity Qatar Liquefied Gas Company Limited. PSO and Qatargas operating company limited have executed a confidentiality agreement and have also exchanged draft Heads of Agreement (HOA) which will form the basis of LNG SPA. PSO and SSGC will enter into a back to back agreement for RLNG off take under a commercial transaction structure," documents add. Petroleum Ministry will also explore the possibility of arranging LNG supplies through an international competitive bidding. According to the documents, the ECC approved cancellation of the bidding process for both the phases of 400 MMCFD re-gasified LNG (RLNG) initiated during previous government. Subsequently, the ECC vide case No ECC-94/08/2013 of July, 02, 2013 authorised Ministry of Petroleum and Natural Resources to engage in negotiations with Qatar on government to government basis for importing LNG up to 500 MMCFD LNG. For receiving, storage and re-gasification of LNG, the ECC vide case No ECC115/13/2013, on August 08, 2013 approved recommendation of the committee, constituted by it comprising Secretary Finance (as Chairman PPRA) and Secretary Petroleum & NR (procuring Agency), for tendering a fast track LNG project without seeking any exemptions from PPRA Rules. Pursuant to decisions of the ECC, Inter State Gas Systems (ISGS) under guidance of Petroleum Ministry and QED Consulting Ltd initiated competitive tendering/bidding process for the provision of LNG receiving, storage and re-gasification services at a terminal to be located at Port Qasim under a tolling agreement without involving any government guarantee. After the selection of successful bidder, the process was taken over by SSGC. The project is aimed at initially handling a minimum of 200 MMCFD RLNG in the first year and 400 MMCFD in the subsequent years for delivering to SSGC with a total contract period of 15 years expected to start from November 1, 2014. The successful bidder is obligated to meet all national and international LNG standards by obtaining licences, permits, authorisations and/or approvals required in this regard for safe and secure LNG handling at Port Qasim Authority (PQA). A single stage two envelope bidding process was undertaken by ISGSL to procure the services, in accordance with Public Procurement Rules, 2004, in response to which two companies namely (i) Pakistan GasPort Limited (PGPL) and (ii) Elengy Terminal Pakistan Limited (ETPL) submitted their proposals. As per technical evaluation of the proposals by the Consultant (QED Consulting Ltd), PGPL could not meet the threshold criteria, while ETPL was declared as the technically qualified bidder and pursuant to approval of the Board of Directors of ISGSL and SSGC its financial bid was opened. Consequently, SSGC''s Board of Directors considered the financial bid evaluation report of the Consultant and approved it. In pursuance thereof, SSGC negotiated the LNG Services Agreement (LSA) with the selected bidder. The parties agreed to the draft LSA and initialled the same on January 17, 2014 subject to approval of the competent forum. In its meeting held on January 28, 2014, the Board of Directors of SSGC approved the initialed draft LSA as amended subject to the following: (i) comfort letters from PSO or the government to the effect that in case of failure to import LNG, the company shall be indemnified from its obligations to pay the capacity charge; (ii) comfort letter from SNGPL that it will off-take its share of gas delivered under this project; (iii) that the management of the company will adjust their accounting procedure to ensure that the imported LNG is ring fenced as it relates to UFG and for this purpose the Ministry shall arrange for a policy directive to OGRA to treat LNG as ring fenced for the purpose of UFG calculation; and (iv) that clause 9.4.3 of the initialed draft LSA is amended to ensure that the credit worthiness of any third party user must be equal to or better than SSGC to protect SSGC against future potential financial difficulties of such third party. The Implementation Agreement (IA) to be executed between the selected bidder and PQA is under negotiation and is expected to be finalised shortly. Ministry of Ports and Shipping through its letter dated 13 February, 2014 has revealed that PQA has requested for financial assistance from the government for the purchase of tug boats and other ancillary works required for the operational readiness of the channel. Karachi Shipyard (KS&EW) has offered its services in constructing tug boats, barges and LNG vessels and in this regard Summary for the Prime Minister is being put up by Ministry of Defence Production. As per para 6.2(b) of the LNG Policy 2011, in case of sale to public sector gas utility, OGRA will approve tolling tariff negotiated between the utility companies and LNG Terminal Owner and/or Operator. In the instant case, the tolling tariff has been arrived at through competitive bidding process under the PPRA rules and no negotiation has been done in this regard. The government under section 21 of the Oil and Gas Regulatory Authority Ordinance, 2002 is empowered to issue policy guidelines on the matters of policy not inconsistent with the provisions of the Ordinance. Such policy guidelines can be issued, inter alia, on the pricing of petroleum or tariff applicable to petroleum. MPNR is also devising a plan for distribution of LNG in various sectors along-with a new gas pricing mechanism for sale of natural gas to various sectors of the economy to account for the higher cost of imported gas in the system. In this regard, MPNR will place its recommendations for consideration and approval of the ECC in due course of time.

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Energy, mining sectors: foreign investment will be welcomed: Shahbaz

A representative delegation of foreign investors and traders led by Prime Minister's Special Ambassador on Foreign Investment, Javed Malik called on Punjab Chief Minister Shahbaz Sharif, here on Tuesday and expressed their interest in investment in various sectors including energy and mining. Provincial Ministers Mian Mujtaba Shuja-ur-Rehman, Sher Ali Khan, Additional Chief Secretary Energy, concerned secretaries and DG LDA were also present on the occasion. Talking to the delegation, Chief Minister Shahbaz Sharif said that government is providing special facilities to foreign investors on priority basis. He said that Punjab government is working on a mega project of generation of electricity from coal and six sites have been identified for setting up coal-based power generation projects in Punjab. Shahbaz said that Punjab government is establishing two projects of generation of energy from coal with its own resources in Sahiwal. He said that there are vast reserves of coal and iron ore in the province and foreign investment in energy and mining sectors will be welcomed. He said that a conducive atmosphere for investors has been created in the province and all facilities regarding investment are being provided under one roof. Prime Minister's Special Ambassador on Foreign Investment, Javed Malik said that Punjab Chief Minister is taking practical measures for the betterment of people of the province. He said that foreign investors are willing to invest in Pakistan. Those who met the Chief Minister included Chairman Colt Investment Resources Richard Quessnal, Director Cal Valley Petroleum Nicolas Perrault, Saeed Al Dhaheri of Royal Partners, Yazit Yusuff of RHB Islamic Bank and Managing Director Banco Espirito Pedro Costa.

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400 mmcfd of LNG to be imported from Qatar, National Assembly told

Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi told the National Assembly on Monday that the ministry intends to import 400 mmcfd Liquefied Natural Gas (LNG) from Qatar in the first phase. Replying to a question, the minister said there is no major pipeline infrastructure augmentation required by the SSGCL network for the import of the LNG while a terminal for this purpose would be completed in Karachi by year-end. He said the government has so far signed no agreement with the Qatar government to import the gas as the negotiation is in initial stage. "A number of mafias are spreading baseless propaganda about pricing of the LNG and other factors as they want to see Pakistan weak and destabilised," he said. To a question, the minister said PPRA rules allow the government to government negotiations for import of LNG. "Qatar is one of the biggest producers and exporters of LNG and the country doesn''t take part in the bidding process," he said. The minister also assured the House that complete transparency would be ensured in the project as he was personally overseeing the whole process. He said Pakistan could have a benefit of $1.2 billion per annum if 800 mmcfd LNG is imported from Qatar under the agreement. Talking about Pak-Iran gas pipeline, the minister said the project aims at bringing 750 mmcfd natural gas to Pakistan under Gas Sale and Purchase Agreement signed on June 5, 2009 by Inter State Gas Systems Limited from the Pakistan side and National Iranian Oil Company from the Iranian side. The agreement became effective on June 13, 2010 after completion of required conditions, he said. "The project cannot be materialised until international sanctions are lifted on Iran," he said, adding that nobody is interested to take part in the bidding for the project owing to the international sanctions on Iran. The minister also informed the House that at present the government is charging Rs 9.40 per litre petroleum levy and a 17 percent GST. To a question, the minister said this is an open tax on the petroleum products as this was mentioned in the budget documents. "The government has given a subsidy on petroleum of Rs 18 billion in the current financial year to facilitate public," he said. The minister said the Saindak copper-gold project is presently producing blister copper, including gold and silver metals. In 2013, the production of metals/minerals from the project was: copper 13,552 tonnes, gold 1.163 tonnes, silver 2.021 tonnes and magnetic concentrate 8,464.774 tonnes. At present 28 oil/gas exploration companies are working in Pakistan, he said, adding that recently the ministry has signed Petroleum Concession Agreements and Exploration Licenses for 12 blocks with Oil and Gas Development Company Limited and Pakistan Petroleum Limited. The minister said oil/gas exploration companies have also set up quality training institutes in different parts of the country to train youth. "A quality training technical institute is under consideration in Kohat from where oil and gas is being extracted," he said. Sheikh Aftab, state minister for parliamentary affairs, told the National Assembly that periodic maintenance and rehabilitation schemes at different sections of M-2 amounting to Rs 1.14 billion under annual maintenance plan 2012-13 are in tendering process. He said Rs 810 million have been allocated for functional overlay of various sections of M-2 under the annual maintenance plan 2013-14. Periodic maintenance and rehabilitation schemes at different sections of M-1 amounting to Rs 358 million under the annual maintenance plan 2012-13 are in tendering process, he said.

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Shale Gas/Oil reserves: MP&NR works on plan to begin exploration activities

The Ministry of Petroleum and Natural Resources (MP&NR) has started working on a plan to fix the exact estimates of Shale Gas/Oil reserves so that exploration activities could be started. "The Ministry has started working on a plan to explore the reserves of Shale gas/oil in the country. The US Energy Information Administration (EIA) has estimated total shale gas reserves in Pakistan at 586 Trillion Cubic Feet (TCF) and over 9 billion barrels of shale oil in Pakistan," an official, who has been given the task to complete the plan in this regard within nine months, told Business Recorder here on Monday. The official said: "as for as Pakistan's recoverable oil/gas reserves are concerned almost 90 percent of the country's total reserves are still barren. We have not worked on exploring offshore oil and gas reserves, while India is producing some 0.7 million barrels of crude oil from Bombay High region." Pakistan's low BTU gas reserves are estimated at 2 TCF and that of tight gas at around 40 TCF, which makes them larger than the existing natural gas reserves of over 24 TCF. The EIA has estimated of 105 TCF recoverable shale gas reserves and over nine billion barrels of oil in Pakistan. They said that the Petroleum Ministry high-ups had directed the Director General (DG) Petroleum Concessions (PC) to workout a viable plan so that the country could explore natural reserves. These estimates of recoverable hydrocarbon reserves are many times higher than so far proven reserves of 24 TCF for gas and about 300 million barrels for oil. Pakistan currently produces about 4.25 Billion Cubic Feet per Day (BCFD) of gas and about 84,000 barrels of crude oil per day. The EIA report released in June 2013 estimates Pakistan's total shale oil reserves at 227 billion barrels, of which 9.1 billion barrels are technically recoverable with current technology. EIA puts Pakistan among the top 10 countries where recoverable shale oil reserves exist. These include Russia (75 billion barrels), United States (58 billion barrels), China (32 billion barrels), Argentina (27 billion barrels), Libya (26 billion barrels), Venezuela (13 billion barrels), Mexico (13 billion barrels), Pakistan (9.1 billion barrels), Canada (8.8 billion barrels) and Indonesia (7.9 billion barrels). The officials of the Petroleum Ministry said that the government in 2012 approved a new exploration policy with increased incentives, as compared to the 2009 Policy. Even with the offer of higher prices for shale and tight gas to exploration companies, it is estimated that Pakistan would pay a maximum of $6.50/Btu for gas as compared to $13/MMBtu for imported gas from Iran and $11/MMBtu from Turkmenistan and $17-19/MMBTU for Liquefied Natural Gas (LNG). The official said the new estimates appeared to be very encouraging for Pakistan' but extraction of shale gas/oil is four times costly and technology extensive as compared to conventional natural resources. He said that the shale gas had seen tremendous developments in the United States (US) and a couple of other countries were trying to use the latest technology. Pakistan, he said, was also encouraging exploration and production companies to venture the fresh horizon. 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 managed demand is hovering around 6 BCFD against total supply of 4.3 BCFD.

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Pakistan, Afghanistan agree to implement CASA-1000, TAPI projects

The 9th Session of Pakistan-Afghanistan Joint Economic Commission (JEC) hosted by the Afghan Ministry of Finance in Kabul from 22-24 February decided to keenly look forward to the implementation of CASA 1000 and TAPI projects, work together to further expand co-operation in Kunar Hydro power project and undertake appropriate measures to enhance bilateral trade. A joint statement on Monday said the meeting agreed that all issues raised by the Afghan side on the implementation of APTTA would be considered by Pakistan and the results will be reviewed in the relevant customs experts meeting scheduled by end of March 2014. Pakistan''s side agreed to speed up the pace of work on various development projects being undertaken in Afghanistan through its financial assistance. The Afghan Government, on its part, agreed to expedite provision of electricity to the projects. The Pakistan side shared a new draft for the Avoidance of Double Taxation treaty. Both sides agreed to further discuss issues involving "Avoidance of Double Taxation" treaty at the earliest. The Afghan side welcomed the extension of scholarship scheme for students from 2000 scholarships to 3000. A number of proposals for possible co-operation between Pakistan and Afghanistan in the areas of Petroleum & Natural Resources, Industries & Production, and Agriculture & Livestock were also discussed during the meeting. In addition to attending the JEC Session at Kabul, Finance Minister Senator Ishaq Dar and his Afghan counterpart also visited major projects constructed by Pakistan under its bilateral assistance programme including recommencement of works on Torkham-Jalalabad additional carriageway, Nishtar Kidney Centre in Jalalabad and the Liaqat Ali Khan Engineering Faculty of Balkh University in Mazar-i-Sharif. Finance Minister Dar also visited the under construction Rehman Baba School and Hostel in Kabul which would accommodate up to 1500 students. Minister of Border and Tribal Affairs Dr Akram Khpalwak welcomed the Minister during the visit to the School. Both the Finance Ministers also met the Governors of Nangarhar and Mazar-i-Sharif and attended official luncheons hosted in their honour during the visit to the two provincial capitals. During the two-day JEC session, detailed meetings were held between the experts of the two sides on a number of issues, especially focusing on Trade, Commerce & Industry co-operation in Communication & Connectivity, Energy, Agriculture& Livestock and Education. The status of various development projects being undertaken in Afghanistan with the financial assistance of Pakistan was also reviewed in detail. Despite financial constraints faced by Pakistan, Prime Minister of Pakistan generously enhanced the overall size of portfolio of development projects in Afghanistan from $385 million to $500 million as a gesture of goodwill to the people of Afghanistan during his last visit to Kabul in November 2013. Both the Co-Chairs addressed the concluding ceremony, signed the agreed minutes of the session and addressed a Joint Press Conference.

Copyright Independent News Pakistan, 2014

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Country has huge reserves of oil, gas and coal to meet long-term energy needs

Pakistan's remaining recoverable gas and oil reserves stand at 26 trillion cubic feet and 342 million barrels, respectively while total coal reserves stand at 186 billion tons According to documents available with Business Recorder, Pakistan domestic production of oil and gas averages 65, 000 barrels per day and 4 billion cubic feet per day, respectively. The total coal reserves stand at 186 billion tons including proven coal reserves of 3.4 billion tons. Pakistan's sedimentary basins, stretching over 827,000 square kilometers, including 300,000 square kilometers offshore, provide enormous and exciting opportunities for oil and gas exploration to national and international entrepreneurs prepared to take up the challenge. Pakistan has a drilling density of less than one exploratory well per 1400 square kilometers. In spite of very low drilling density, the overall success rate is very encouraging ie 1:3.3 as compared to the world average of 1:7. The current indigenous gas production is around 4 Billion Cubic Feet per Day (BCFD) against the demand of about 6 BCFD, envisaging a gap of 2 BCFD which is expected to increase manifold in the next 5-10 years. This situation warrants boosting the pace of indigenous oil and gas exploration as well as finalisation of the import options of Gas/LNG on fast track basis. Official sources said that a comprehensive gas sector reform programme, including restructuring of gas sector companies, rationalisation of tariff regime and judicious/economic gas allocation among the competing sectors is required. They said that the restructuring of the sector and establishment of a gas market has assumed immense and immediate importance as the LNG and the pipeline imports cannot be managed in the current regulatory environment. The overall law and order situation in the oil and gas promising areas in the country is not conducive. With particular reference to Balochistan, which has a good track record of gas discoveries and holds promise for future discoveries, it is very difficult not only to operate existing producing fields but also carry out exploration activities for new prospects. They said that the measures to develop expertise and capacity building regarding large-scale mining for coal for power generation both in public and private sectors needs to be undertaken. They said as coal is a provincial subject under the constitution, the proactive and constructive role of all the provincial governments for the exploration, production and utilisation of the coal resources in their jurisdiction is very essential. It is necessary to construct a mega, state-of-the-art export-oriented refinery of about 10-15 million tons /annum capacity to capture the fast growing Asian market at Gwadar Deep Sea Port. They said that the crude for the refinery could be sourced from nearby Middle East countries. The private investment regarding setting up pipelines, refineries, storages and terminal facilities are being envisaged, they said. They said that the key driver of sustainable development and investments in the energy sector is the availability of proactive and coherent energy policies. The existing fuel sector policies presently under implementation ie E & P Petroleum policy, 2012, LNG policy 2011, LPG policy 2012, Tight gas policy, Low BTU gas policy and Gas load Management and Allocation Policy, 2005 need critical review. The private sector must be allowed to play its role and the Government must ensure effective and independent regulatory functions by the regulators so that interest of both the investors and consumers are protected, they urged. They said that the existing Oil and Gas Regulatory Authority's (Ogra) role and functions under the Ogra Ordinance 2002 needs review and expansion of its scope in order to cover the upstream stream Oil and Gas activities also. The sources said that the provinces should use equal ownership rights in respect of oil and gas resources granted under the 18th Constitutional Amendment as an opportunity for growing the energy sector in their respective jurisdiction and not just rely on receipt of revenues from the Federal government. They said that the position is now changing as most fuel sector projects need to be implemented by the private sector, while government has to play a critical policy making role in order to create an enabling environment for the efficient induction of the private sector investment. The sources said that the balance between thermal and hydro-electricity has shifted steadily against hydro-electricity which now accounts for only 33 percent of total power generation whereas an ideal level would be much higher. They said that special efforts need to be made to restore the balance. They said that construction of Diamer Bhasha Dam may be carried out on fast track basis so that the ratio of thermal and Hydel will be more balanced. Coal is a primary energy source which is plentifully available in the country and is also the cheapest fuel for power generation but unfortunately it has not yet been utilized, they said.

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Makhori field operationalised: LPG output to rise to 620,500 tons annually

The country's Liquefied Petroleum Gas (LPG) production is to reach 620,500 tons per annum with additional production of 109,500 tons per annum from Makhori East-III by next month. According to Petroleum Ministry officials Pakistan's current LPG production stands at 511,000 tons per annum and 300 tons per day or 109,500 tons per annum LPG production would start from March 10, 2014 from Makhori East-III gas/oil field, which became operational on February 10, 2014. Makhori East-III field located in Tal Block is jointly explored by Hungarian Oil and Gas Company MOL, Pakistan Petroleum Limited (PPL); Oil and Gas Development Company (OGDCL); Government Holdings Private Limited (GHPL) and Pakistan Oilfields Limited (POL). On February 10, the field stared production of 28 Million Cubic Feet per Day (MMCFD) of gas and 7,600 barrels per day of crude oil. Sources told Business Recorder that MOL is the operator of the Tal Block located in the Kohat Plateau, Khyber Pakhtunkhwa. The country will have 300 tons of LPG per day from March 10. This additional production of crude oil, gas and LPG will help save an estimated $800 million per annum spending on the import of oil and LPG. So far, six discoveries have been made in the block, the first in 2002 and the most recent in 2011. Commercial production has commenced from Manzalai, Makhori and Makhori East fields. Mamikhel and Maramzai discoveries are currently being evaluated through Extended Well Testing (EWT). Officials said this year, local LPG production is expected to increase by 255,500 tons per annum or 700 tons per day, crude oil production is likely to cross 100,000 barrels per day from current production of around 84,000 barrels per day and natural gas production by 700 MMCFD. The total capacity of the field is to produce 30,000 barrels of crude oil/condensate, 450 tons of LPG per day and 150 MMCFD of gas. About 22, 000 barrels per day of crude oil is expected to come into the system from Makhori and another 21,000 barrels per day from Nashpa field being operated by OGDCL. The MOL has installed Gas Processing Facilities (GPF) in TAL block, with a capacity to process 30,000 bbl/d of oil/condensate and 150 MMCFD of gas. After the installation of the gas processing facilities, the company will be producing up to 300-350 tons of LPG per day. Total production of LPG stands at roughly 511,000 tons per year of which refineries accounted for 55 percent, while gas fields contribute about 45 percent. "Up to 80,000 tons of LPG is imported, while another 25,000 tons is smuggled into the country from Turkmenistan and Iran," sources said.

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Coal reserves key to country's development: Qaim

Sindh Chief Minister Syed Qaim Ali Shah has said that Thar Coal reserves, which spread over 9000 sq kilo meters, are the key to development of the country. He said that Pakistan could produce crude oil and fertiliser in addition to power by utilising the coal reserves for sustainable development both in agriculture and industrial sectors. This he said while speaking to PPP leaders at a reception in his honour by party leader Haji Shujra Muzzafar at his residence on Friday. Former Sindh chief minister Aftab Shoaban Meerani, former Sindh Minister Syed Ali Nawaz Shah, Zahoor Ahmed Shujra, Raees Wazir Ali and other PPP leaders also attended the reception. The Chief Minister said that the Sindh government with the support of private sector was actively working towards establishing a 620MW Coal Based Power Project at Tharparker. He said that many foreign investors were taking keen interest in making investment in Thar Coal Power projects. He further said that in addition to coal reserves, the country had powerful wind corridors and good weather for solar energy besides, technology to produce electricity from solid waste could also be used. Qaim said that the Sindh government had decided to provide safe drinking water to the citizens and electrify street lights in Karachi through solar energy. The Chief Minister expressed his satisfaction over the successful completion of Sindh Festival that according to him had infused new sprit and devotion among the people.-PR

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IP gas line contract needs to be altered: Khaqan

Pakistan is committed to completing the Iran-Pakistan gas pipeline project, but wanted to make a few changes in the contract, Federal Minister for Petroleum and Natural Resources, Shahid Khaqan Abbasi said. He was talking to reporters after witnessing the contract signing ceremony of award of exploration licenses and petroleum concession agreements in eight blocks to (OGDCL), Pakistan Petroleum Limited (PPL) and Mari Petroleum Company Limited (MPCL) for exploring oil and gas resources. Khaqan said Pakistani government hasn’t yet talked about the LNG prices with Qatari government, adding that Pakistan would start importing LNG from November this year. He said the government is open to allow anybody and sectors to initiate import of LNG so that long-standing energy crisis could be ended, causing serious losses to the economy. He appreciated the efforts of concerned officials of the Petroleum Ministry, especially by Saeedullah Shah, Director General Petroleum Concessions (DGPC) and his team for taking keen interest and taking on board all the four provinces in making the Petroleum Policy 2012 functional. He said exploration and production activities in the oil/gas sector would create job opportunities for skilled and unskilled workers. "Due to investment friendly policies of the government, he said, 73 oil/gas wells were drilled during past one year and 17 discoveries have been made so far. We have added 230 Million Cubic Feet per Day (MMCFD) of gas and over 9,500 barrels of crude oil to the system since coming into power," Khaqan added. At present the country''s oil production has reached 84,374 bbl per day, which is the highest oil production level achieved so far and within next couple of weeks oil production will further increase by 10,000 barrels per day. These new discoveries will add another 130 MMCFD of gas and 3,553 barrels per day of crude oil to the network. So far, 45 MMCFD of gas and 1,924 bbl oil per day has been added to the network through new discoveries. The minister also appreciated the DGPC and his team for preparing and finalising another 8 exploration licenses and 8 Petroleum Concessions Agreements within 10 days. He added that these efforts will bear fruit in the form of additional hydrocarbon reserves. The total area of the aforesaid blocks is 16,117.09 Sq. Km and a minimum firm work commitment is $ 49.58 million. Apart from minimum work commitment, companies are obligated to spend a minimum of $ 30,000 per year in each block on social welfare schemes. The ministry has already signed 12 exploration licenses (EL)/Petroleum Concession Agreement (PCA) to explore hydrocarbon resources. Licenses were awarded for four blocks, including Block No. 2562-1 (Pasni West), 3070-16 (Pezu), 2970-6 (Alipur), and 2870-7 (Khanpur) with OGDCL, three for block No. 2566-4 (Hab), 2467-13 (Malir) and 2467-16 (Shah Bandar) with PPL and one for block No. 3371-16 (Peshawar East) with MPCL. Pasni West block is located in Pasni, Gawadar and Kech districts of Balochistan. Pezu block is located in Laki Marwat, Tank, D.I. Khan and D.G. Khan districts of KP province; and Alipur block is located in Multan, Bahawalpur, Rahimyar Khan and Muzaffargarh districts of Punjab. Khanpur block is located in Rahimyar Khan district of Punjab, Hab block is located in Jamshoro and Karachi districts of Sindh and Khuzdar and Lasbela districts of Balochistan, Malir block is located in Jamshoro and Karachi districts of Sindh, Shah Bandar block is located in Thatta district of Sindh and Peshawar East block located in Swabi, Mardan, Kohat, and Nowshera districts of KP and Attock district of Punjab. The ceremony was attended among others by secretary petroleum and respective heads of the three oil and gas entities.

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Local crude oil production may cross 0.1 million barrels per day

Pakistan's local crude oil production may cross 100,000 barrels per day from the current production of around 70,000 barrels and Liquefied Petroleum Gas (LPG) production is likely to go up to 2,100 tons per day from current 1,400 tons. Petroleum Ministry officials said on Tuesday that recently a Hungarian Oil and gas company had added 28 Million Cubic Feet Per Day (mmcfd) natural gas and 7,600 barrels crude oil to the system from Makhori East-III field. The total capacity of Makhori East-III field is 30,000 barrels of oil/condensate, 150 mmcfd of gas and 450 tons per day of LPG. The company along with its partners within next one or two months would enhance the field's current oil/gas production from 28 mmcfd of gas to 150 mmcfd gas and crude oil from 7,600 barrels per day to 30,000 barrels of crude oil/condensate. "Oil and Gas Development Company Limited (OGDCL) has recently added 22,000 barrels per day of crude oil to the system from Nashpa field. The addition of 30,000 barrels of crude oil to the system will save an estimated $1.1 billion per annum from Pakistan's spending on oil import. The additional production of local LPG will not only reduce the local prices, but also save $9.3 million foreign exchange being spent on the import of LPG," the officials said. "Local gas production from different fields is gradually increasing, as we have recently added 13 mmcfd of gas from Reti Maro gas field, 28 mmcfd from Makhori East-III, while another 120 mmcfd of gas will be injected into the system from Makhori East-III within next month and 25 mmcfd will be added to the system from Zarghum by March 15, 2014," they added. The officials said that gas/oil had already been discovered at a number of blocks and now the gas companies were working to connect these oil/gas fields with the gas distribution system and by the end of June 2014 up to 400 mmcfd of gas would be injected into the system. They said that the additional gas would be added to the system from following gas fields: 120 mmcfd from Makhori Gas Field, up to 60 mmcfd from Latif Gas Field, 18 mmcfd from Mehar Gas Field and 25 mmcfd from Zarghoon Gas Field.

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12 petroleum exploration accords signed

ISLAMABAD: The Ministry of Petroleum and Natural Resources on Monday signed petroleum concession agreements and exploration licences in 12 blocks with Oil and Gas Development Corporation (OGDCL) and Pakistan Petroleum (PPL) for exploration of hydrocarbon reserves. The licences and petroleum concession agreements are for blocks in Ladhana, Fatehpur, Ranipur, Armala, Baratai, Rasmalan, Parkini, Nausherwani, Bela West, Karsal, Hisal and Sadiqabad with a minimum firm work commitment of $176 million covering the total area of 22619.3 square km. Speaking on the occasion, Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said that execution of agreements and licences would not only attract new investment, but also abridge gap between energy demand and supply. The Directorate-General of Petroleum Concessions prepared and finalised 12 exploration licences and 12 concession agreements within one week after provisional award, said a ministry statement. Ladhana block is located in Leiah, Muzaffargarh and Multan districts; Fatehpur block is in Leiah, Muzaffargarh, Khanewal and Multan districts; Ranipur block is in Khairpur, Larkana and Nausharo Firoz districts; Armala block is in Tharparker district; Bratai block is located in Kohat district; Rasmalan block is located in Pasni, Awaran and Lasbela districts; Parkini block-b is located in Awaran and Pasni districts; Nausherwani block is located in Kharan districts; Bela West block is located in Khuzdar, Awaran and Lasbela districts; Karsal block is located in Chakwal district; Hisal block is in Attock, Chakwal and Rawalpindi districts; and Sadiqabad block is located in Rahimyar Khan district. OGDCL holds the largest share of oil (58pc) and gas (42pc) of the total reserves in the country. Its percentage share of total oil and gas production in Pakistan is 52 per cent and 27 per cent, respectively. In addition, OGDCL is operator in 34 exploration licences and working interest owner in six other exploration blocks operated by various exploration and production companies. The OGDCL is currently producing 43,807 barrels of oil, 1145mmcf of gas, 85mt of LPG and 96mt sulphur per day. PPL being the oldest and largest exploration and production company is presently operating 16 different exploration blocks and is the working interest owner in 16 other exploration blocks operated by various exploration and production companies. The PPL is operator of five producing fields: Sui, Kandhkhot, Mazarani, Adhi and Chachar with the total daily production of 684mmcfd of gas, 7,100 barrels oil and 157 metric tonnes of LPG.

Copyright Dawn, 2014

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Production of oil, gas: Khyber Pakhtunkhwa government to explore natural reserves

The Khyber-Pakthunkhwa government decides to increase oil and gas production by exploring maximum natural reserve as well as a plan to establish oil refinery in the province. Similarly, a comprehensive plan has been chalked out to provide cheap electricity to industries by setting up hydro- and thermal-power houses so that maximum national and foreign investors could be attracted to the province. It is also planned to establish four new industrial zones in the province. This was stated in a meeting, chaired by Khyber-Pakhtunkhwa Chief Minister Pervez Khattak here at CM Secretariat, wherein discussed matters related to the industrial needs for energy and setting up new power houses accordingly. Those, who attended the meeting included Advisor to CM on Economics & Investment Rafaqatullah Babar, ACS Khalid Pervez, Secretary Energy & Power Sahibzada Saeed, Secretary Finance Saed Badshah Bukhari, other concerned quarters and authorities of MOL, a foreign company engaged in oil and gas exploration in southern districts and Britain Investment Company Zimbazi. On this occasion the foreign companies made an offer to invest in new projects of energy in the province. Advisor MOL Ali Murtaza Abbas told the participants that his company has planned to increase the gas production by 34MMCF oil production by 7,600 barrels and LPG production by 300 tons per day from 9th of this month. It merits a mention that MOL is already producing about 40,000 barrels of oil and 270MMCF gas per day in KP while increase in the same and production of LPG would provide a sound footing for industrial development in the province. The MOL advisor further said his company would utilise 15MMCF gas out of the extra gas production to set up a thermal-power house with electricity production capacity of 60mw and the same could be used for industrial purposes as desired by the Chief Minister. Similarly the additional production of oil and gas as well as bulk LPG would also promote the production of petroleum bye-products. Later the delegation of Zimbazi also called on the advisor to Chief Minister on mineral development Ziaullah Afridi at his office, as per advice of the Chief Minister. The delegation was led by its chief executive George H. Richmond. They expressed their willingness to invest in exploration of copper, gold, iron ore, precious stones and other minerals in Khyber-Pakhtunkhwa especially in District Chitral. Secretary Minerals Mian Waheed and Director Minerals Shakirullah Khan were also present on the occasion. Ziaullah Afridi assured the delegation that the government of Khyber-Pakhtunkhwa would not only encourage foreign investors but would also provide them all possible facilities through one window operation. He said all out steps would be taken for the protection and security of the foreign investors. Ziaullah hoped that foreign investment in mineral resources would help greatly in changing the lot of people of this province.

Copyright Business Recorder, 2014

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Pakistan hopes to sign cut-price gas deal with Qatar

Pakistan will send officials to Qatar this month aiming to sign a liquefied natural gas (LNG) deal at a discount to help alleviate its power supply crisis, a Pakistani official said. There have been widespread public protests in Pakistan recent years over frequent power cuts due partly to a lack of fuel. Islamabad had hoped to address the problem with natural gas piped overland from Iran but that project remains stalled by US sanctions against Tehran. It is now looking to much more expensive LNG to alleviate its power problems. "Qatar wants to sell at a market price and Pakistan is looking to get a discount," the official said. "We expect the deal to be signed this month for an amount of 3.5 million tonnes per year." He said Pakistani energy officials would fly to Doha in late February hoping to convince Doha to sell them about 5 percent of Qatar''s annual LNG output at below international market rates. LNG currently trades in the Asian spot market at nearly $20 per million British thermal units. Qatar, the world's leading LNG producer, is not known for offering discounts. Qatar has the capacity to produce up to 77 million tonnes per year of the super-cooled gas. In the past Doha has refused to sell discounted gas even to Arab Gulf allies and surging demand over the last few years has given producers the upper hand in contract talks. Pakistan has also not yet built a terminal to import LNG.

Copyright Reuters, 2014

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Government incentivising oil & gas exploration: Pakistan cherishes close friendly ties with UAE: Dar

Federal Minister for Finance, Economic Affairs, Revenue and Statistics Senator Ishaq Dar has said Pakistan cherished close friendly ties with the people and the leadership of the United Arab Emirates (UAE). He was talking to Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance and Industry of the UAE. They discussed matters of bilateral interests, said a message received here from the Consulate General of Pakistan in Dubai on Wednesday. The Finance Minister said the foundation of the close and fraternal relations between the brotherly countries was laid down by late Khalifa Zayed bin Sultan Al Nahyan and Sheikh Rashid bin Saeed Al Maktoum. Sheikh Hamdan bin Rashid Al Maktoum expressed his optimism that the leadership of Pakistan would soon overcome challenges confronting the country. He assured that his government would extend all possible co-operation for economic development of Pakistan and extended his best wishes for Prime Minister Nawaz Sharif. He appreciated the invaluable contributions of expatriate Pakistani community in the development of UAE. The Finance Minister apprised him that Pakistan's economy had been put on track through enforcement of financial discipline. He maintained that the government believed in market economy and facilitation of businesses to enhance economic growth. Dar further said Pakistan's industry had started showing positive growth of 5.2 percent. Revenue's collection in January 2014 was Rs 167 billion indicating an increase of 26 percent over the collection of January last year which was a positive signal to achieving full year target. He said prospects of utilising the natural gas in Pakistan were bright as the government was incentivising oil and gas exploration to overcome energy shortages by tapping indigenous natural resources and soon come up with a new exploration policy. Sheikh Hamdan also recalled his visit to Karachi 11-12 years back and remarked that the city had since expanded. The Finance Minister informed him that both Karachi and Lahore had expanded and developed rapidly, while Lahore which had developed recently as a comparable city was attracting people in Pakistan.

Copyright News Network International, 2014

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LNG import to become a reality

With the formal approval of LNG import agreement between Sui Southern Gas Company (SSGC) and Engro Vopak Terminal Limited (EVTL), by the board of directors of SSGC and expected approval by the Economic Co-ordination Committee (ECC) of the Cabinet, Pakistan is all set to make LNG import a reality, which has been a dream for over seven years now. According to this agreement, EVTL will set up an LNG handling facility at its existing terminal at Port Qasim and initially import 200 million cubic feet per day (MMCFD) which will be increased to 400 MMCFD at a later stage. Through this agreement Government is expecting to bridge the demand and supply gap of gas in the country and expecting first LNG vessel to arrive in November this year. Informed sources told Business Recorder that the government has been successful in negotiating a highly discounted tolling fee agreement with Engro Terminal which would be $0.66 per mmbtu, an extremely low price relative to international benchmarks. Sources said that in Indonesia tolling price is $1.8 per mmbtu for handling LNG at a floating terminal and $1.2 per mmbtu for a land terminal. Average tolling price (based on 2010) in North America was $0.73 per mmbtu, $0.87 in China, $0.81 in Europe, $0.89 in South Korea and Japan and $0.72 in the Middle East. Sources close to the developments said that in the next 10 years, production of natural gas in Pakistan is expected to fall by 30 percent while demand is expected to rise by 70 percent - reaching 8.5 billion cubic feet per day. At the current rate of consumption, it is expected that Pakistan will run out of gas in less than 20 years, hence it's imperative to look for the alternative source of gas in and around Pakistan. Pakistan's daily production of natural gas is approximately four billion cubic feet, while accumulated demand exceeds six billion cubic feet per day. Petroleum Minister Shahid Khaqan Abbasi is on record saying that the delay in the import of LNG is causing a loss of $ two billion annually to the country. International demand for LNG has increased and countries like India, Bangladesh, Jamaica, Indonesia are opting for LNG to sustain their energy needs where in Pakistan has been struggling for the same for the last seven years. In January 2013, PortGas Pakistan Limited, an associated group company and Engro subsidiary - Elengy Terminal Pakistan (ETPL) participated in a bid to set up an LNG import terminal for supply of 400 mmscfd RLNG. The first bid was cancelled due to shortcomings on part of PGPL and Global Energy Infrastructure Pakistan (GEIP); consequently, both the companies submitted their second bid to SSGC in February 2013. The second bid was declared to be non-compliant by the Advisor Ministry of Petroleum and Natural Resources as ETPL had presented Brent based pricing per RFP and HH+Brent based option for the supply of LNG. This was the third tender which is being run this year with two integrated tenders already cancelled earlier in 2013. The government called for bids for the fast track LNG tender on tolling basis only, to which two domestic parties responded - ETPL and Pakistan PortGas Limited (PGPL). Sources claimed that there are lobbies in the country, who don't want country's energy issues to be solved, or at least through LNG import due to their larger than life business and economic vested interests. There are business groups, powerful enough to derail the gas import plans in the country be it LNG import or IP gas import arrangement. The current government has shown its resolve and commitment to bridge the current gap and this time, we won't let vested interests to derail the gas import in the country, an official based in Islamabad categorically stated. They said that government has chosen Engro Terminal for fast track LNG import in the country for the fact that EVTL is the only state-of-the-art integrated bulk liquid terminal in Pakistan with an open access and merchant floating storage re-gasification terminal with a storage capacity of 3.5 million tons per annum (mtpa). They further said that China Harbour Engineering Co Ltd (CHEC) is associated with ETPL as an EPC contractor only to participate in the Fast Track LNG project. In some circles there is a misunderstanding that China Harbour Engineering Co Ltd (CHEC) was blacklisted by World Bank. This, however, is not true and the objection is not relevant. The company in focus - CHEC - has never been blacklisted by World Bank. In fact one of its sister companies, China Road and Bridge Corporation, was debarred by World Bank for "road and bridge contracts for the duration of January 2009 to January 2017 but not CHEC. In the LNG project, CHEC is associated with ETPL as an EPC contractor only to participate in the Fast Track LNG project at Port Qasim, which is a marine terminal and does not fall in the category of "road and bridge contracts. Government has done its due diligence on Engro's capacity and capability to import LNG in the country and a quantitative risk assessment was conducted by Lloyd's Register UK, which reviewed hazard identification, navigational simulations and dispersion modelling in 2011. It has not only approved the site in terms of LNG operations and safety, but cites certain operational advantages of it. Moreover, ETPL is committed to comply with all safety regulations in PQA and have agreed to third party vendor assessment, they said. LNG Import is the fastest short-term solution to Pakistan's crippling economic needs. The IP gas pipeline will take approximately three years to complete after FID which itself is in doldrums. The Hydel expansions (at Mangla/Tarbela) are expected to complete in 2017. Similarly the nuclear expansion project at Kanupp II is to be completed in 2016. This means Pakistan has no solution to the ongoing problem at least for the next four years except for LNG import which could come in as early as end of 2014.

Copyright Business Recorder, 2014

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Thar coal project inaugurated: it’s first step towards building capacity: Prime Minister

Prime Minister Nawaz Sharif and former President Asif Ali Zardari inaugurated the work on Friday on The Sindh Engro Coal Mining (SECMC) project, a joint venture between government of Sindh and Engro Corporation. This marks the beginning of coal extraction from Thar Coal block II. Nawaz Sharif and Asif Ali Zardari were accompanied by the Chief Ministers of Sindh, and Baluchistan, Federal Ministers for Finance, Water & Power, and Petroleum & Natural Resources besides federal & provincial government officials and Senior Management of Engro Corporation. The event reflects complete political consensus on Thar coal being a sustainable indigenous solution for Pakistan''s energy security. The project envisages initial mine capacity of up to 6.5m tpa along with mine-mouth power plant(s) of up to 660 MW. Part of coal production will also be supplied to other coal fired plants being planned. Speaking on the occasion, Prime Minister Nawaz Sharif said, "I congratulate the Government of Sindh and Engro Corporation for initiating the project to utilise indigenous resources for power generation. It is an important milestone in attaining the sustainability in Pakistan''s energy mix. Pakistan is fortunate to have abundant coal reserves, and the investment in Thar Coal project is a first step towards building the capacity, which will foster a more developed and energy-efficient Pakistan". Former President, Asif Ali Zardari said, "I would like to congratulate the Government of Pakistan and the Government of Sindh for bringing this landmark initiative to fruition. The Thar Coal will not only bring together all the key players of economy on one forum to highlight potential of investment in Pakistan but will also help the initiatives which will put the country on the path of rapid, equitable and sustainable socio-economic growth." The Chief Minister for Sindh, Syed Qaim Ali Shah addressed the gathering and said, "Sindh Government attaches high priority to investment facilitation which it believes would take the province and country to the path of progress and help achieve its true economic potential. The ground-breaking ceremony of this site is the manifestation of Sindh Government''s commitment to bring about continuous improvement in investment climate in the province. Moreover, our success in signing this key joint venture project with Engro Corporation is also in pursuit of our objective to bring prosperity to our people and provide them with jobs and socio-economic development opportunities." Murad Ali Shah - Advisor for Finance & Energy, GoS said: "Sindh with its numerous competitive advantages has always remained an obvious choice for investors. The initiation of the Thar Coal project reflects Sindh''s potential for investment particularly in relatively untapped areas and this momentous effort will eventually culminate in fulfilling Sindh Government''s commitment to provide equitable development in all parts of the province - thereby improving the life of the common man." Mining and power project at block II is being established by Sindh Engro Coal Mining Company ("SECMC") which is a joint venture of Engro Powergen Limited & Government of Sindh (GoS). Soon after its establishment, SECMC engaged world class consultants including RWE Germany, Sinocoal China and Inner Mangolia China for carrying out a detailed feasibility study which confirms the technical, commercial, environmental and social viability of Thar coal mining project. The Initial mine production will cater to around 600-1200 MW of electricity generation which will be gradually scaled up to eventually yield power generation of 5,000 MW for 50 years. This historic groundbreaking is in line with the Government of Pakistan''s vision of promoting indigenous fuel based projects to create a sustainable energy future for the country. Firm EPC bids from Chinese contractors for both mining and power project have been received while EPC contracts are likely to be awarded by end of February 2014. Chinese banks have expressed interest in providing financing for the project. The financial closure of the project is expected by third quarter - with Chinese banks expressing interests in providing the requisite financing - while the project is estimated to commence its commercial operations within four years from the time of financial closure. The cost of power generated from Thar coal is estimated at under USD 9/kwh which is almost 50% of cost from furnace oil based electricity generation. Consequently, the development of this project not only provides cheaper electricity but also bodes well for tackling the monster of circular debt since expensive power generation from liquid fuels remains the root cause of energy crisis plaguing this nation. Expressing his views, Hussain Dawood - Chairman Engro Corporation said, "On behalf of Engro Corporation and Sindh Engro Coal Mining Company, I wish to place our gratitude to the Government of Sindh and the Federal Government for its continued support and partnership in this key project; and remain confident that together we will continue to boost development across Pakistan, paving the way for national prosperity in the years to come". This project is one of the few projects in Pakistan that enjoys bipartisan support of both federal and provincial governments. Besides being the majority shareholder in SECMC and thereby taking up role of the main equity investor, GoS has also taken the role of developing requisite infrastructure at Thar including road, effluent disposal and provision of water. In the last six years, the GoS has spent more than USD 300 Million to develop the infrastructure. The project also enjoys complete support of federal government, which has shown its commitment through sovereign guarantee for mining project. Project was listed as the priority energy projects to be financed by China in a recently held Pak-China Energy Working group in Beijing. Thar Coal has the potential to change the energy landscape of Pakistan; the coal can also be used for gasification of fertilizer and petrochemicals industry opening up new avenues of progress and development in Pakistan.-PR

Copyright Business Recorder, 2014

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