14TH INTERNATIONAL EXHIBITION FOR THE ENERGY INDUSTRY

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News Headlines for the month of
MARCH 2014

Chinese businessmen investing $32 billion in energy sector: Asif

Federal Minister for Defence, Water and Power, Khawaja Muhammad Asif, here on Saturday said that 2000 megawatt electricity would be added to national grid within next three months to facilitate domestic and industrial sector across the country. Addressing the members of Sialkot Chamber of Commerce and Industry (SCCI) and traders, he said that we should use electricity judiciously and minimise use of air-conditioners to facilitate the entire country during the peak season as well as in Ramazan so that everybody could use fans to avoid heat. Air-conditioners use 30 per cent electricity, he added. The Minister informed the house that Chinese businessmen were investing $32bn for power generation and out of which $6bn would be used on dual power transmission lines in the country. He further stated that strenuous efforts were being made to reduce the duration of load-shedding to facilitate the common man, saying that due to the effective policies and management we have been able to minimise the line losses and improve the services to facilitate the common man in the country. Kh Asif said that brisk development work was under way on Nandipur power project which, he added, would start functioning shortly. The provision of electricity to the industrial sector was the top priority of the government to ensure employment in the country and to keep the economic wheel in operation, he added. He said that 100-bed cardiac unit with all modern facilities had been approved for Sialkot and up-grading the civil hospital to the capacity of 800 beds in future while the construction of Sialkot-Lahore expressway would begin soon. Kh Asif said that PML-N leadership was keen to maintain peace at all cost in the country and for this the process of talks has been initiated, saying that the army was also supporting the dialogue. In his welcome address, the SCCI President, Dr Sarfraz Bashir, highlighted various problems being faced by the business community of Sialkot. Special Advisor to Chief Minister Khawaja Muhammad Mansha and MPA Choudary Muhammad Ikram also attended the meeting.-

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CASA-1000: World Bank approves $526.5 million grant, credit financing

The World Bank Group''s Board of Directors on Friday approved 526.5 million dollars in grant and credit financing for the Central Asia South Asia Electricity Transmission and Trade Project (CASA-1000) for four countries: Afghanistan, Kyrgyz Republic, Pakistan, and Tajikistan. CASA-1000 will build more than 1,200 kilometers of electricity transmission lines and associated sub-stations to transmit excess summer hydropower from existing power generation stations in Tajikistan and the Kyrgyz Republic to Pakistan and Afghanistan. The project will finance the engineering design, construction, and commissioning of transmission lines and three new converter stations. The power generation stations that provide the energy to be traded over CASA-1000, including Toktogul in Kyrgyz Republic and Nurek in Tajikistan, are already in place - and in Tajikistan currently "spill" or waste the hydropower energy during summer months. This transmission infrastructure project will put in place the commercial and institutional arrangements as well as the infrastructure required for 1,300 megawatts (MW) of sustainable electricity trade. The total project cost is estimated at 1.17 billion dollars, and several other development partners will provide financing for CASA-1000, including the Islamic Development Bank and United States Agency for International Development. In addition to the infrastructure investments, the World Bank Group will also provide country-specific community support programmes through a Multi-Donor Trust Fund and the Afghanistan Reconstruction Trust Fund. These programmes will help improve livelihoods in communities living along the project corridor and facilitate revenue-sharing. An Inter-Governmental Council has been established to supervise the design and implementation of these programmes. "These four countries are demonstrating strong regional co-operation by addressing their energy challenges together," said Sri Mulyani Indrawati, World Bank Managing Director and Chief Operating Officer. "CASA-1000 is a transformational project that will give a much-needed boost to energy security, improved connectivity and trade across two regions at a critical time." Nearly 400 million people in South Asia lack reliable access to electricity. Businesses cite energy shortages as one of the most binding constraints to their operation, expansion, and job creation. Both Afghanistan and Pakistan rely heavily on oil for power generation. Cleaner and affordable electricity imports from Central Asia will enable improved service, reduce shortages over the critical summer period, and lessen the financial pressure of fuel imports. The Kyrgyz Republic and Tajikistan have abundant hydropower, but power generation capacity exceeds national needs during the summer and is insufficient during the winter. Exporting surplus electricity during the summer will help the two countries generate the revenues they need for priority energy sector investments, particularly to cover energy shortages during the winter. The sale of Tajik electricity through CASA-1000 will come exclusively from existing surplus generation from May to September to maintain the seasonal pattern of water flows and winter power generation. The commercial and operating framework for CASA-1000 is specifically based on "open access" principles which will allow additional energy supplying countries to connect with wider regional transmission networks. CASA-1000 will enable the development of the Central Asia South Asia Regional Electricity Market (CASAREM) - a long-term plan for regional energy trade. "There is too little trade among these regions today and opportunities are being missed. CASA-1000 is just one of several important regional energy initiatives that can help strengthen economic ties while improving the energy situation," said Philippe Le Houérou, Vice President for South Asia. Of the total project financing, Afghanistan will receive 316.5 million dollars in the form of an IDA grant; Pakistan will receive 120 million dollars in IDA credit; Kyrgyz Republic will receive 45 million dollars in IDA grant and credit; and Tajikistan will receive 45 million dollars in grant financing. "CASA-1000 can help improve performance in the transportation, telecommunications, and industrial sectors - all of which are critical elements of a functioning economy and all of which depend on electricity," said Laura Tuck, WB Vice President for Europe and Central Asia. "Improvements in the transparency of revenue management will be implemented by the Central Asian countries, demonstrating their commitment to improving the performance of their energy sectors."-PR

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Dasu hydropower project: Rs 486 billion approved by Ecnec

The Executive Committee of the National Economic Council (Ecnec) has approved Rs 486 billion for construction of Dasu hydro power project (stage-I) with a foreign exchange component of Rs 218 billion. The meeting chaired by Finance Minister Ishaq Dar submitted a summary by the Ministry of Planning, Development and Reform for Dasu Hydro Power Project (stage-I) at rationalised cost of Rs 486,093.3 million with FEC of Rs 218.547 billion to be located at District Upper Kohistan, Khyber Pakhtunkhwa. Dasu Hydro Power Project is designed for 4,320MW in two stages with power generation of 2,160MW in each phase on the Indus River. The stage-I of the proposed project envisages the construction of 2,160MW Dasu hydro power project and acquisition of land including resettlement, construction of offices, colonies, project access roads and pre-construction activities. The stage-I will be completed in a period of five years. Once completed, Dasu power project will generate electricity at a unit cost of Rs 2.14/kWh. The Ecnec also constituted a committee comprising representatives from ministries of planning, development & reform, water & power, finance, Wapda and the government of Khyber Pakhtunkhwa to monitor the issues relating to land acquisition for ensuring propriety of the land cost. It was further decided that the ministry of water and power will confirm that NOC from the concerned Environmental Protection Agency (EPA) has been obtained. The Ecnec also approved 34.5MW Harpo Hydro Power Project at a modified cost of Rs 9.5 billion with FEC of Rs 6.1 billion. The location of the project is at Harpo Lungma, District Skardu, Gilgit-Baltistan and the executing agency will be Wapda. It will be completed in four years. The AFD of France and Kfw of Germany will finance the project through a loan of 70 million euros. The additional cost will be met from Wapda''s own resources. The project cost includes construction of 132kV double circuit transmission line from project site to Skardu. The finance minister said energy is an essential ingredient for socio-economic development and economic growth. He said hydro power is low cost, environment-friendly source of electricity. He added that the government, in line with the vision of PML-N leadership, will make use of the potential of the natural resources of the country for the benefit of the people. The meeting was attended by Khawaja Mohammad Asif, Minister for Water and Power, Pervaiz Rashid, Minister for Information, Broadcasting and National Heritage, Ahsan Iqbal, Minister for Planning and Development, Ghulam Murtaza Jatoi, Minister for Industries & Production, Ms Anusha Rehman, Minister of State for Information Technology, Jam Kamal Khan, Minister of State Petroleum, Mohammad Zubair, Chairman Privatisation Commission, Syed Murad Ali Shah, Advisor to Chief Minister Sindh on Finance, federal secretaries and senior officials of the federal and provincial governments.

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World Bank agrees to provide $1.7 billion: Dar

Finance Minister Ishaq Dar has said that the World Bank has agreed to provide US $1.7 billion and the board is likely to approve the amount in its meeting in May 2014. Addressing the ceremony of soft launch of the government debt securities at the Islamabad Stock Exchange (ISE) here on Wednesday, Dar said that out of $1.7 billion to be provided to Pakistan, $700 million would be for the construction of Dasu Hydro Power Project. The minister said that the government planed to complete mega development projects with the estimated cost of Rs 3000 billion in the next four years for energy and infrastructure development. He said the government would complete all three road shows by mid April regarding the issuance of Euro bonds worth $500 million. Pakistan is going to issue Eurobonds in the international market after seven years. He said that currently, the country had about $10 billion foreign reserves and the government wanted to raise the reserves to $20 billion in three years. About the spectrum auction in the country, the minister said that the process for the auction had been triggered and the auction of 3G/4G spectrum would be held on April 23. Dar stated that Pakistan needed to pursue an investment-led growth strategy instead of focusing on consumption-led growth. Floating the government papers through the capital markets was the first step towards enhancing the saving rate in country through debt market. Pakistan has huge potential in the mode of financing. In few years, Pakistan would have a developed debt market. He further said that the government was considering the launch of shariah compliance bonds like Sukuks, apart from the conventional bonds. Dar said that the government was focusing on investment-led economic growth which would be proved as sustainable for the country. "The sustainable economic growth can only be achieved when there is investment-led growth in the country. There is much to be done and we have to spend over Rs 3000 billion during next 3-4 years for completion of 19 flag-ship mega projects including Karachi-Lahore motorway," he said. Referring to a recent study conducted by McKinsey and Company, the Asian region, as a whole, must commit close to US $8 trillion to infrastructure projects over the next decade to remedy historical underinvestment and accommodate the phenomenal growth in demand. Major investment is required in energy, transport, housing, communications and water facilities. Deterioration in above sectors has constrained, according to the study, economic growth in Asia by 3 to 4 percentage points of GDP. The magnitude of underinvestment in infrastructure and growth in demand is even higher in Pakistan. Pakistan has huge infrastructure development needs. From energy to transport, from housing to communications, there is much to be done. Vast amount of finances will be required to meet these needs in the years ahead. Therefore, we must prepare ourselves to mobilise the financing needed to close the increasingly widening gap, he said. Pakistan''s economic growth has remained below potential for more than a decade. Despite a few spurts, sustainable high economic growth that benefits all segments of our society, rather than a few, has remained elusive. He said that it is a broad objective of the government to improve liquidity in the Debt and Capital markets and to diversify the investor base of the government & corporate debt markets. This will further facilitate in channelising the savings of the end investor directly to debt instruments and may bring more efficiency in the process. In this context, the SBP and SECP have taken several initiatives in the past. The launch of investment and trading in Government debt securities at Lahore and Islamabad Stock Exchanges is a step in the direction of diversifying and enlarging the investor base of Government debt. Equity markets in Pakistan have shown consistent superior performance in recent years. The KSE-100 Index stood at 19,916 on 11th May 2013 on the day of general elections in the country. The Index has risen to 26,821 as of closing yesterday - an increase of nearly 35%, making Karachi Stock Exchange one of the best performing market in the world during this time period. The equity market performance is reflective of how the listed companies are doing in terms of financial health and their future outlook. On both counts, the major listed companies'' performance underpins the stock market''s overall behaviour. The performance of the equity market is reflective of how the listed companies are doing in terms of financial health and their future outlook. On both counts the performance of major listed companies underpins the stock market''s overall behaviour. Over the last decade or so, the public sector and private sector companies raised Rs 630 billion in debt and equity from the capital markets. It is laudable the potential still exists for raising this amount several times. The Government is doing its part in providing a major impetus to capital market development by launching government securities trading on two major stock exchanges of the country. For individual savers and investors, this new venue to deploy savings is an excellent opportunity to invest in the government''s debt securities, which provide both superior return as well as high liquidity as compared to many financial instruments of comparable maturity. The inclusion of the government securities in the individual saver''s investment portfolio also reduces volatility in portfolio value. "I envisage a time in the not too distant future, when the government will issue infrastructure bonds - both in the conventional and Shariah compliance mode - through the capital market so that investors can participate in building up of Pakistan''s infrastructure backbone," he maintained. Increased savings and their proper investment will also assist in meeting our 3-year medium-term goals. He reminded of the goals that the GDP growth to gradually rise to around 6 - 7%; investment/GDP to rise from 12.6% to 20%; Tax/GDP ratio to rise from 8.5% to 13 %; Fiscal deficit to be brought down from 8.8% to 4% of GDP; foreign exchange reserves to be increased to around US $20 billion and public debt to be reduced to below 60% of GDP as per statutory requirement.

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Kishanganga project: government likely to seek review of ICJ decision

Pakistan has reportedly termed the decision of the Hague-based International Court of Justice (ICA) on 330 MW Kishanganga hydroelectric project being built by India in the Held Kashmir as flawed and internal consultation is in progress to seek a review/clarification on some points, well informed sources told Business Recorder. "There are flaws in the decision of ICA and Pakistan is considering challenging the decision," the sources added. Pakistan Muslim League (Nawaz), in its party manifesto, had vowed that the issue of "water management" in the context of relations with neighbouring countries and the proper utilisation of river resources by the countries through which these rivers flow, will be accorded the urgency and importance that it deserves. However, there is an impression that issues related to water disputes with neighbouring countries particularly with India are not being taken up with the required enthusiasm. "I have not seen any inter-ministerial meeting convened to evolve a joint policy to deal with water issues with neighbouring countries," a senior official continued. The government''s seriousness can be gauged from the fact that the office of Pakistan Indus Water Commissioner lacks relevant expertise on water issues. And the Ministry of Foreign Affairs responsible for taking up such issues bilaterally and at international fora does not appear to be proactively engaged in water issues with neighbouring countries. In addition to Kishanganga hydroelectric project, Pakistan and India have disputes over quite a few small dams which, according to sources, would have a negative impact on Pakistan''s inflows from the Indian Held Kashmir and in violation of the World Bank-brokered Indus Water Treaty. Pakistan''s dispute with Afghanistan over diversion of the Kabul river remains unresolved; sources allege that this diversion is through criminal connivance with India and further state that Pakistan has taken up the issue of Kabul river with Afghanistan at the highest level; however, no tangible outcome of these interactions has been witnessed. Recent reports suggest that China has also started working on a 130-140 MW hydroelectric projects in Tibet to supply electricity to its troops. This project could have a negative impact on water inflows to Pakistan. Last week, while addressing Water Summit, Minister for Planning, Development and Reform, Ahsan Iqbal expressed serious concern over water issues. "In 1947, the water availability is Pakistan was 5,650 cubic meter per person which kept on decreasing firstly due to the Indus Water Treaty 1960, giving away 33 MAF water of three eastern rivers to India; secondly, a gradual decline in trans-boundary flows into Pakistan which has been alarmingly up to the tune of 10.25 MAF, and thirdly exceptional growth in population of Pakistan, all making per capita water availability in Pakistan to as low as 964 cubic meters per year which makes us a water deficit country and can hamper our well-being and at the same time severely impact future economic development. "Trans-boundary water issues with India and Afghanistan have to be resolved in a win-win mode to ensure regional stability and prosperity," he said. The sources said Prime Minister Nawaz Sharif and his Indian counterpart, Dr Manmoham Singh at a meeting in New York last year had discussed water issues. The Indian Prime Minister had suggested that both the countries should resolve water disputes bilaterally instead of taking them up at international fora. A couple of months ago, Khawaja Muhamamd Asif, Minister for Water and Power, had announced at a press conference that he would initiate the process towards reviewing the Indus Water Treaty but no concrete steps in this regard have been suggested so far by him or his ministry.

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Khyber Pakhtunkhwa launches Rs 300 million solar energy soft loan scheme

The provincial government of Khyber Pakhtunkhwa has launched Rs 300 million soft loan schemes for solar energy projects in the province. Under the scheme the provincial government through the Bank of Khyber (BoK) has offered maximum amount of Rs 30 million. The loan will be returned in a period of six years at the mark-up rate of 7 per cent. Qualification for the applicant is that he should be permanent resident of Khyber Pakhtunkhwa, registered tax payer with business stationed in the province. Similarly, he should not be defaulter of any bank or institute or remain so in past. Maximum age limit for the applicant is 60 years. The loans will be issued for the development of the industry of solar energy for generation of employment opportunity in the sector. However, the applicants would prove such suitable resources, through which he will not only make investment in the project, but will also fulfil any deficiency in future. The ratio of the loan and investment will 40/60. Fixed assets including land of the project, building, machinery and other material could be considered as guarantee and security by the applicants. Last date for the submission of application with the Bank of Khyber is June 30, 2014, which will be submitted with specific branches included Main Branch, G.T. Road, Saddar Road, University Road branches in the provincial metropolis and branches in Mardan, Mingora, Kohat, D.I. Khan, Hattar, Abbottabad and Chitral. The idea of the financing of solar energy along with schemes in health, education and other sectors was also given by the Qazi Munir-ul-Haq in his vision for Bank of Khyber in his presentation to the provincial government. In his vision Haq had proposed appropriate and economical solar generators to meet the requirement of agriculture tube- wells as well as domestic consumer for identified from China and their arrangement through prospective investors and financing Murabaha Financing.

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Mega power plants: Russia offers to increase power generation capacity

Russia offers Pakistan to increase the power generation capacity of its mega-power plants like Muzaffargarh Thermal-Power Station, to invest in public transport, manufacturing of legal fertilisers and other projects because Russia considers Pakistan an important country of the region as it has great economic potential and wants to increase bilateral trade and co-operation with Pakistan in diversified areas of economic activity. This was stated by Yury M Kozlov, trade representative of Russian Federation in Pakistan while addressing the business community at Multan Chamber of Commerce and Industry (MCCI) here on Tuesday. "Strong bilateral trade and larger co-operation between Pakistan and Russia would bring prosperity and integrity to the region," he said. He said Russia saw Pakistan as a significant market and many Russian investors are taking interest in exploring Pakistan for joint ventures and investment. He said previously Russia participated in some big projects in Pakistan including Pakistan Steel Mills and now there is a renewed interest to enhance trade and economic ties with Pakistan in multiple areas. Kozlov said negotiations are in process with Pakistan for energy projects and co-operation in science and technology. He said a Russian company has already offered $1 billion financial and technical assistance for rehabilitation and up-gradation of Pakistan Steel Mills. "Russia is also ready to implement 500-600MW coal-fired thermal-power projects near Muzaffargarh and Jamshoro and also to modernize and convert some other power projects in Pakistan to coal," the Russian trade representative said. He also briefed the local businessmen about the upcoming trade exhibitions in Russia and invited them to participate in these exhibitions for exploring new areas of business co-operation. MCCI President Khawaja Usman said Pakistan is now focusing on Central Asia for trade and exports and developing strong economic relations with Russia is vital for tapping huge markets of this region. He said Pakistan is occupying a key economic location in the region and Russia should provide support to Pakistan to get the membership of Shanghai Co-operation Organisation.

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Power plants of Gadani: PPIB, Chinese company sign MoU

Private Power Infrastructure Board (PPIB) and M/s China Group Company Limited (CGGC) on Monday signed a Memorandum of Understanding (MoU) for setting up three imported coal-fired plants of 600mw each at Gadani Power Park. Managing Director of PPIB Noor-ul Amin Zuberi signed the MoU on behalf of the Government of Pakistan (GoP), while the president of Gezhouba Group Chen Xiao Hua signed on behalf of the company. Minister for Water and Power Khawaja Asif witnessed the signing of the MoU between CGGC and PPIB. Secretary Water & Power Saif Ullah Chattha and other senior officials of the government were also present on the occasion. Insiders in the Ministry of Water and Power argue that since Secretary Economic Affairs Division (EAD) Nargis Sethi has been appointed Chief Executive Officer (CEO) of Pakistan Power Park Management Company Limited (PPMCL), MoUs are being signed by the PPIB, which is considered an unusual practice. In the MoU, CGGC has expressed interest to install three projects of 660 MW each (1980 MW) based on imported coal at Gadani. Earlier in January this year, the PPIB had signed an MoU with CGGC in Beijing for the development of a 660 MW power plant at Gadani, however the CGGC has shown interest in developing another three plants at Gadani thus totalling 2,640 MW with an investment outlay of 3.5 to 4 billion US Dollars. Minister for Water and Power said that relations between China and Pakistan are of historical importance. He said that during the recent visit of the Prime Minister Nawaz Sharif to China, the Chinese leadership committed to substantial investments in various sectors of our economy including power sector and Chinese companies are keen to make business ventures in Pakistan, M/s Gezhouba being one of them. He said the initiative of Power Park at Gadani has evoked a lot of interest in the international as well as local investors'' community. He also told the press that presently, CGGC is playing a key role in the construction of 969 MW Neelum-Jhelum Hydropower Plant as a lead contractor in collaboration with China National Machinery Import and Export Corporation and is also the EPC contractor for the 840 MW SukiKinari Hydropower Project in the private sector which is expected to achieve its financial close by July 2014; however, the construction of the project is expected to start within a couple of months. The Minister said that these upcoming power plants will require transmission line facilities for transmitting power to the national grid, and the government has decided that transmission lines will also be built by the private sector in an IPP mode. For this, procedures are being laid down and Transmission Line Policy will soon be launched after due approval of the Cabinet. In this regard a follow-up meeting was held at Private Power and Infrastructure Board (PPIB) with State Grid Corporation of China (SGCC) which is keen to invest in Pakistan to lay high and low voltage transmission lines. The meeting was attended by the high officials of SGCC, Secretary Water and Power, Managing Director NTDC, Managing Director PPIB amongst other officials of Ministry of Water and Power. These transmission lines will be for Quetta, Jamshoro, Faisalabad and Lahore. The government has already offered two tariffs for imported projects, ie, tariff with a jetty and tariff without a jetty. "If any company invests in a jetty, investment will be covered in tariff. GoP will extend a sovereign guarantee, CGGC has high stakes in large dams in China like the Three Gorges, Shuibuya, Jinping I, and Longtan Dam, and its business reaches out to over 70 countries in Asia, Africa and America. In 2012, CGGC ranked no. 62 among the top 225 international contractors in the world and 42nd largest contractor by revenue in the world, which is approximately $7.5 billion. Provision of services like jetty switchyard, ash disposal, cooling water, transmission infrastructure and residential facilities would be the responsibility of the government of Pakistan.

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Export of 500 megawatts of power to Pakistan: technical groups formed to review aspects: Indian HC

Indian High Commissioner to Pakistan Dr TCA Raghavan on Tuesday said that Pakistan and India have constituted technical working groups which would review the aspects of the export of 500MW of electricity to Pakistan. He was talking to newsmen after attending a businessmen meeting at the zone office of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) here on Tuesday. The groups would also review the provision of necessary infrastructure for the purpose, he said, adding, "both the governments want to see best co-operative way to strengthen trade relations." Earlier talking to businessmen, Raghavan said, we should avoid problematic issues, instead look forward. About 10 years ago, no Pakistani or Indian was allowed to cross the Wagha Border. "Now substantial progress has been made, as not only people of the both countries are visiting but also trade has been allowed via land route,' he maintained. He was of the view that trade is a first step to strengthen bilateral relations between the two countries. Now we have to see how joint ventures can be established between the business communities of Pakistan and India, he said. He hoped that Non-Discriminatory Market Access (NDMA) agreement would soon be implemented which would help improve trade volume between the two countries. Speaking on the occasion, Zone Head, SM Naseer pointed out non tariff barriers hindering Pakistan's exports to India. He stressed the need for removal of hurdles in trade and asked the Indian High Commissioner to relax visa policy, particularly for the Pakistani businessmen. He also suggested opening up of a separate gate at Wagha border, exclusively for the trade, as the existing gate is closed well before the sun set because of traditional flag lowering ceremony.

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KP power, mineral sectors: Chinese companies vow speedy work

Advisor to Chief Minister Khyber Pakhtunkhwa for Economic Affairs and chairman Investment Cell, Rafaqatullah Babar, held meetings with Chinese hydel power companies Zhongnan and Tony-Pak Minerals. The companies expressing interest in making investment in hydel power and mineral sectors, respectively, of Khyber Pakhtunkwa made request for issuance of no-objection certificate (NoC). Rafaqatullah appreciated the offer by Chinese companies of investment and development of KP, besides other parts of the country. He said that till now Chinese companies have started investment of billions of dollars in different sectors and areas. He assured Zhongnan Corporation of NoC for establishment of power station in Shogar area of Chitral and said that company could start work from next week. He said that Khyber Pakhtunkhwa is rich in natural resources and has huge potential of hydel power and mineral sector and issuance of licenses has been started to different national and international companies for taking benefit of the resources. The company representatives told advisor that their survey teams will start work by collecting statistics of the flow of water, in all four seasons, of the area soon after getting NOC and will start construction of the power house from next year. The electricity to be generated from the power station, to be completed in next one and half year, will be provided to local industrial units on subsidised rates, the advisor said. He said that under One-Window Operation of the Investment Promotion Cell all necessary facilities would be provided with immediate effect to all domestic and foreign companies. He said that for next power projects the company will be issued 30 years operational license and the tariff will be fixed according to the policy evolved by the government. The CEO of Tony-Pak Minerals told that they will help utilise mineral resources, in the best way besides provision of employment and training to improve the socio-economic conditions of the locals.

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PML-N government initiates eight power sector projects

The Pakistan Muslim League-Nawaz (PML-N) government has initiated as many as eight power sector projects including the construction of small dams in current financial year 2013-14 while most of the ongoing power projects initiated by the previous PPP government are being supported. According to data available on the official website of the Planning Commission, the PML-N government has launched the following power projects: (i) Conversion of FO/Gas Fired Boilers to Coal of 1,350 MW Units 1-6 Thermal Power Station, Muzaffargarh (with Asian Development Bank support); (ii) Conversion of FO / Gas Fired Boilers to Coal of 450 MW Units 1&2 Thermal Power Station, Jamshoro (ADB); (iii) Installation of New Coal Fired Power Plants having Capacity 2x660 MW at Jamshoro (ADB) and five projects relating to construction of dams, (iv) Construction of 8 Small/Medium Dams in Khyber Pakhtunkhwa; (v) Construction of Small Dam at Torewary District Hangu; (vi) Detailed Engg. Design for Hingol Dam, Lasbela Balochistan; (vii) Feasibility Study for Water Resources Development with Construction of Small Dams in Balochistan (All over Balochistan); and (viii) Resettlement of Extended Families of Mangla Dam Raising Project in current financial year-2013-14. The PML-N government is continuing more than 26 power projects including construction of dams initiated by the previous PPP government which include Neelum Jhelum Hydro Power Project (969 MW) [with assistance from China, Kuwait, Saudi Arabia, IDB and Opec], Tarbela Fourth Extension Hydro Power Project (1410 MW) (Swabi) [World Bank, IDA], Dasu Hydro Power Project Northern Areas (4320 MW) (Kohistan) and others. The PML-N government is also completing the following power projects initiated by the PPP government: (i) Bara Dam, Khyber Agency, FATA (Medium); (ii) Construction of 100 Delay Action Dam in Balochistan (Package-II, 26 Small Dams) (Multiple Districts); (iii) Construction of 100 Delay Action Dams in Balochistan 1st Package 20 Dams (Multiple Districts); (iv) Construction of Delay Action Dams Ground Water Recharge of Pishin Quetta Mastung & Mangocher; (v) Darban Dam, D I Khan, Khyber Pakhtunkhwa (Medium); (vi) Darwat Dam, Jamshoro Sindh (Medium) (China); (vii) Detailed Engg. Design for Pelar Dam, Awaran Balochistan (District Awaran) (Medium); (viii) Nai Gaj Dam, Dadu Sindh (Medium) (China); (ix) Naulong Storage Dam, Jhal Magsi Balochistan (Medium) (China); and (x) Re-construction of Shadi Kour Dam, District Gwadar (Medium) - Satpara Multipurpose Dam (District Skardu) (Medium) (USA) and others.

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Dubai group keen to supply 3,000 megawatts: MoU inked

A memorandum of understanding was signed Monday at the Ministry of Water & Power between Al Aqili Group, Dubai and the Ministry of Water & Power, government of Pakistan. The signing ceremony was witnessed by Federal Minister for Water and Power Khawaja Muhammad Asif while Aqili Group was represented by its CEO Mohamed Saeed Al Aqili. The Secretary Water & Power, Managing Director PPIB, Managing Director NTDC and other senior officials were also present on the occasion. According to the agreement, Aqili Group of Dubai has expressed interest in supplying 3,000MW of electricity to Pakistan from Iran under a long-term contract. The group shall also finance/build transmission lines to inject 3,000 MW into the national grid in Pakistan. The Minister for Water and Power said that, upon completion, this project will prove to be mega achievement of the government for eliminating the menace of loadshedding from Pakistan and will also further strengthen the economic and regional relationships with our brotherly country, the UAE. He said that we can only get uninterrupted supply of electricity by looking at all avenues. Besides developing in-house capacity, import of power is a very viable option. Al Aqili Group is rated amongst world's top group of companies and has a number of high profile partnerships with many prominent multinationals. The group has successfully established an extensive network of relationship with the business communities, financial institutions and government in all its operating geographies.-PR

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Chinese firm keen to invest in KP power sector

A Chinese company Sino-Tia-Cheng Group has offered investment in hydro power schemes in Khyber Pakhtunkhwa especially in power houses projects of Shozhosin (132MW) and Sharmai (120MW) in Chitral. A delegation of the company led by its Chief Executive, Liuyonggyang called on Rafaqatullah Babar, Advisor to Chief Minister on Economic Affairs and In-charge of Investment Promotion Cell, at his office here on Sunday and discussed with him various matters of foreign investment and rule and regulation affairs. Liuyonggyang told him that his company had vast experience in hydel power stations as well as in the industry and automobile sectors. He said that his company with financial assistance of China Developmental Bank was ready for 100% investment in Shozhosin (132MW) and Sharmai (120MW) power stations in Chitral. Addressing the meeting, Rafaqatullah Babar said that the provincial govt besides introducing reforms and transparency in other sectors of the government had also chalked out Strategic Development Partnership Framework (SDPF) wherein foreign investors were being given all incentives under one window operation. Similarly, transparency in the investment matters had also been brought about in Khyber Pakhtunkhwa. He also proposed investment in two feasible hydro power projects near Abbottabad saying that feasibility reports of these projects had already been finalised. He asked the company to send a technical proposal to the provincial government so that practical progress could be made in this regard. He assured all out support and co-operation of the provincial government to the company.

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Gadani Power Park master plan launched

Master plan for Gadani Power Park was launched on Friday at Gaddani in a meeting between Chief Executive Officer (CEO), Pakistan Power Park Management Company Ltd (PPPMCL), Nargis Sethi and the projects' consultants including the Royal Hesconage, Lahmar international and NESPAK. The plan has been prepared in five weeks time since taking over by the present CEO, showing the fast track approached adopted by PPPMCL in realising the project. With the launching of master plan, now it has become possible for investors to use it as a bankable document for raising their funds. Master plan for any project is considered to be a basic document. It provides concept about the location, extent, viability, infrastructure design and all other related information of the project needed by the investors to determine their own level of funding and its return. According to details the master plan envisages ten power plants each of 660MW generation capacity and running on coal, total 6600 MW. The plan also provide to construct a dedicated state of the art coal handling jetty at the site where capsize vessels will be unloaded. There will be common facilities of cooling plants, coal providing conveyer belts, coal storage, ash disposal mechanism, residential schemes, hospitals, schools etc. The plan also envisages a dedicated power evacuation system connecting the plants with rest of the county's especially with Balochiatan. The CEO PPPMCL, Nargis Sethi on this occasion said that launching of the master plan in five weeks time since her taking charge of the project is a milestone and manifestation of the seriousness the government attaches to the project. She said that the government has been providing special support to the project. She specially mentioned the support that the Balochistan government has extended to the project. The CEO informed that negotiations are underway with investors from many countries including China, Turkey, UAE etc for installation of power infrastructure at Gadani. She said that they are closely following the developments at Gadani and their zeal indicates all success of the project. During the meeting with consultants, the CEO conveyed the desire of the Prime Minister Nawaz Sharif to further fast tract the project. She also asked them to undertake immediate measures for land levelling so that plot allocation would be made for power plants in shortest possible time.-PR

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US, Wapda sign accord to rehabilitate Mangla Dam

The United States and Pakistan on Thursday signed a $72 million project implementation agreement to refurbish and upgrade the Mangla Dam located in the Mirpur district of Azad Kashmir. The rehabilitation will improve the operating capacity of the hydroelectric plant at Mangla dam by 90 megawatts (MW), enough electricity for about 119,000 Pakistani households. A total amount of $150 million is stated for the project, with $72 million allotted for this initial phase. USAID Mission Director Gregory Gottlieb and the Chairman of Pakistan''s Water and Power Development Authority (WAPDA), Syed Raghib Abbas Shah signed the agreement on Thursday at the offices of Advanced Engineering Associates International (AEAI), USAID''s implementing partner. "The work at Mangla builds upon efforts begun by the US in the 1960s, when the US government funded the construction of Mangla dam. The United States understands that Pakistan is facing an energy crisis and we are committed to doing our part to alleviate it," Gottlieb said. Under the agreement, the US Agency for International Development (USAID) will fund the refurbishment of two generators and the modernisation of ancillary equipment of the power house at the dam. The new equipment will improve the reliability and efficacy of the Mangla dam for the next 40 years. "Wapda has also initiated an upgrade of the Mangla power house to enhance its generation capacity from the existing 1000MW to 1310MW," said Wapda Chairman Raghib Shah. According to Shah, the project is part of the Federal Government''s strategy to add low-cost electricity to the national grid to mitigate power shortages in the country. The funding of the Mangla dam rehabilitation is one element of a comprehensive US energy assistance program in Pakistan, which includes renovating the power plant at the Tarbela Dam, upgrading the Guddu, Jamshoro, and Muzaffargarh thermal power plants, and completing the construction of Satpara and Gomal Zam dams. In total, United States energy programs have added 1088MW to Pakistan''s electrical power systems benefiting over 10 million Pakistanis.-PR Copyright Business Recorder, 2014 Power project: an enraged minister asks PPIB to encash performance guarantee Minister for Water and Power Khawaja Asif has reportedly directed Private Power & Infrastructure Board (PPIB) to encash performance guarantee of $0.675 million of 135 MW Star Power Limited despite repeated requests from Sindh government, sources close to Secretary Water and Power told Business Recorder. This decision was taken at a recent meeting of the PPIB in the committee room of Petroleum Ministry. Khawaja Asif presided over the meeting. Water and Power Minister, sources said, also used derogatory language against the sponsor and urged the officials to make his remarks part of the minutes. The sources said, the IPP had requested another extension and used the platform of Sindh government. The provincial government, sources said, had assured the Ministry of Water and Power and PPIB that in case extension is granted to the IPP, the project will be established in Dharki (Sindh) as per the commitment. In June, 2011, the then Minister for Water and Power, Syed Naveed Qamar had granted the last extension despite resistance by the then Secretary Planning and Development, Sohail Ahmad. The Board was informed that PPIB had held a number of meetings with the sponsors. The representative of the sponsors revealed that as per OPIC''s requirement, the Environmental and Social Impact Assessment (ESIA) study was expected to be updated by end of April 2011. After that it would have been uploaded for around 2 months on OPIC''s website for comments, following which it would take approximately another one month for completion of the project appraisal by OPIC, before the case was to be presented for Board approval in September 2011 or December 2011. Subsequent to OPIC Board approval, an additional time would have been required to raise the debt from international banks based on the OPIC''s guarantee and it was hoped that OPIC would be able to achieve a financial close (FC) by March 2012. PPIB Board was informed that sponsors could not demonstrate progress to achieve an FC. The board members deliberated the matter at length. Minister for Water and Power, who is also the chairman of the Board, expressed anger at the PPIB for not encashing the performance guarantee.

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Universal access to energy for all: World urged to establish new international goal

Pakistan has called upon the international community to establish a new international goal on providing universal access to energy for all. Addressing a meeting convened by Pakistan Permanent Mission to the UN here, Ambassador Masood Khan said that there is near consensus on establishing a three-pronged international goal aimed at providing international support in promoting access to modern energy services, enhancing efficiency and doubling the share of renewable energy sources in the global energy mix. Around forty senior diplomats, from developed and developing countries including Brazil, India, China, Norway, Denmark, South Africa, Japan, South Korea, Switzerland, France and office of the UN Secretary General attended the meeting. Pakistan, Denmark and Norway have been leading an effort at the United Nations to push for establishing an international framework as part of the post-2015 Development Agenda and associated goals on access to energy for all. Ambassador Masood Khan, while appreciating the UN Secretary General Ban Ki-Moon for his initiative on Sustainable Energy for All, called upon international community to ensure establishing a robust global partnership for co-operation and development to succeed in this important objective. Ambassador Khan also termed the lack of energy for poor in South Asia as one of the foremost challenges facing humanity. He said that out of 1.6 billion people living in South Asia today, nearly 800 million people lack access to electricity. The UN Secretary General's Advisor on Energy, Elizabeth Thompson underlined that need for ensuring that an international framework should not work in silos but rather forge key linkages with other sectors such a health, water, food and women empowerment. The Norwegian Ambassador, Geir Pederson and Denmark's Ambassador, Ib Peterson lauded Pakistan's strong and constructive engagement in pushing for such an international framework and extended his government's support in this endeavor. Last year, Prime Minister Nawaz Sharif, during his visit to New York in September, held a trilateral meeting with his Norwegian counterpart, Jen Jens Stoltenberg and the Minister for Development Co-operation of Denmark, Christian Friis Bach. The three leaders agreed to push for an international framework on energy which will not only provide assistance to energy starved countries, mobilise the private sector but also deal with the challenge of climate change by doubling the share of renewable energy in the global energy mix.

Copyright Associated Press of Pakistan, 2014

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Import of electricity: government steps up talks with Iran and India

Pakistan has expedited negotiations with India and Iran to import 1500 MW electricity aimed at eliminating power shortfall as early as possible, official sources told Business Recorder. A team of experts of Water and Power Ministry headed by Sohail Akbar Shah, Additional Secretary Water and Power has reached New Delhi to discuss formalities of importing 500 MW electricity. Other members of the committee are, Joint Secretary Water and Power, Zargham Eshaq Khan, Deputy General Manager (Finance (WPPO) and Waseem Younis, Manager (Power Planning) NTDCL. The Indian side will be headed by Jyoti Arora, Joint Secretary. Federal Cabinet recently approved a Memorandum of Understanding (MoU) to import electricity from India. A two-member delegation will also visit Iran from 17-18 March 2014 to finalize the agreement on the import of 1000 MW electricity. The delegation will comprise Additional Secretary Water and Power, Sohail Akbar Shah and Managing Director, NTDC, Zia-ud-Din. The project was conceived pursuant to a Memorandum of Understanding (MOU) signed by Minister of Water & Power, Pakistan and Minister of Iran on 8th April 2007 in Tehran. The salient features of the feasibility study conducted by MOSHANIR (Iran) and NESPAK (Pakistan) during 2009-2010 are: (i) HVDC interconnection on + 500 kV level and converter and switching stations at Zahedan and Quetta; (ii) total length of the transmission line is 678 KM, out of which 93 KM will be in Iran and 585 KM will be in Pakistan; (iii) Iran to construct a dedicated 1300 MW power plant at Zahedan; and (iv) the total estimated cost of transmission line project is $700 million. A delegation led by former Managing Director, NTDC, visited Tehran in June 2012 and signed an MoU with TAVANIR, Iran, which includes the negotiated tariff. The salient features of the MoU are: (i) the cost of HVDC interconnection project is estimated to be approximately $700 million excluding the cost of 1300 MW power plant which is to be constructed in Iran; (ii) TAVANIR consented to finance the HVDC Interconnection Project cost in its own territory (approximately $265 million); (iii) the parties agreed to finance the HVDC interconnection project for Pakistani side (approximately $435 million) as follows: (a) seventy percent which is approximately $300 million will be arranged and financed by Iranian financial institutions; and (b) thirty percent which is approximately $135 million will be financed by Pakistani financial institutions. It was agreed that the price of electricity for an initial period of five years from COD will remain 8.00 to 11.00 cents/kWh depending upon the price of crude oil, which will remain within the limits of $78.57 per barrel and $121.43 per barrel. The Board of Directors, NTDC, in its meeting held on October 03, 2012 accorded its approval. Thereafter, the Ministry of Water and Power has been requested along with a draft of ECC summary vide letter dated 25-10-2012 followed by reminders dated 10-12-2012 to obtain GoP approval prior to approaching NEPRA for determination of tariff agreed in MoU. GoP approval is awaited. Federal Cabinet is expected to approve the MoU with Iran on import of electricity in its forthcoming meeting. The Pakistani delegation will also discuss progress on transmission line for the import of 100 MW electricity for bordering areas of Balochistan.

Copyright Business Recorder, 2014

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Hydropower project: three firms submit bids

Three companies have submitted bids for 100 MW Kotli run of river hydropower project on the river Punch, to be evaluated on a fast-track basis by a committee headed by the Managing Director Private Power & Infrastructure Board (PPIB). The estimated cost of the project is US $170 million and will be developed on built-own-operate-transfer basis and will be handed over to the AJK Government after thirty years. The bid opening ceremony was witnessed by the Federal Minister for Water and Power, Khawaja Asif, Minister of State for Water and Power, Abid Sher Ali, senior officials, representatives of bidders and the media. The proposals were invited from prospective investors for development, financing and construction of 100 MW Kotli Hydropower Project in private sector through national and international print media in December 2013. Initially five companies - of Chinese, Thai and Pakistani origin - showed their interest and finally three companies submitted firm proposals. The companies that submitted their proposals for 100 MW Kotli Hydropower project were M/s CWE Investment Corporation, China, M/s Ratchaburi Electricity Generating Holding PCL, Thailand and M/s Sachal Engineering Works (Pvt) Ltd, Pakistan. Minister for Water and Power directed PPIB to expedite evaluation process and complete it as early as possible but cautioned that at the same time transparency in the entire process must be observed. First hydropower power project in the power sector 84 MW New Bong was commissioned in March 2013 whereas the second private hydropower project-147 MW gas entered into construction phase after achieving its financial close successfully in December 2012. Other hydropower power projects with accumulative capacity of about 5000 MW are at advance stages of development. Addressing the ceremony, Khawaja Asif said the government was focusing on development of hydropower resources to achieve long term vision of the power sector and to overcome its challenges. The opening of proposals for 100 MW Kotli hydropower project was one of the examples of incumbent government''s interest in improving the hydro-thermal mix in the country, he added. Khawaja Asif further said the project would not only provide clean-affordable and reliable electricity but also provide employment in the area. "We are optimistic that with the support and co-operation of investors, and the commitment of the government, we will overcome the power crisis in the shortest possible time," he said. The pre-qualified applicants will be issued Requests for Proposals (RFP) documents for preparing their bids for the next stage. Managing Director, PPIB, N A Zuberi expressed satisfaction over the response from international and national companies. The representative of M/s Sachal Engineering Works (Pvt) Ltd, Pakistan complained to the Federal Minister for Water and Power that issues relating to 7 MW run of river project have not been resolved even after 12 years. The minister assured the representative of M/s Sachal that he would personally look into the matter.

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'Matiari to get power grid station soon'

Divisional Commissioner Hyderabad Jamal Mustafa Syed has said that the Sindh Government is keen to overcome power load shedding problem and therefore it decided to construct Matiari Grid Station soon. This he informed while presiding over a meeting to identify a piece of land for the construction of Matiari Grid Station at his camp office, here on Monday. The Deputy Commissioner Matiari Fayaz Hussain Abbasi, Assistant Commissioner (Revenue) Hyderabad Manzoor Siyal, officers of National Transmission Distribution Company, Forest Department and others attended the meeting. The commissioner informed the meeting that Matiari Grid Station would be constructed as central location for the electricity generated from Thar Coal Project, and from where it would be supplied to other surrounding areas. Deputy Commissioner Matiari Fayaz Hussain Abbasi addressing at the meeting said that the construction of Matiari Grid Station not only help overcome electricity crises in surrounding areas but employment opportunities would also be generated. The Divisional Commissioner Hyderabad directed the officers of National Transmission Distribution Company and Revenue Department to identify land and submit him a feasibility report for the construction of Matiari Grid Station. He said that in the next meeting, the location for the project would be finalised. Project Director of National Transmission Distribution Company Farid Ahmed Siddiqui informed that for the project approximately 200 acre of land is required which was being searched in District Matiari or other surrounding area.

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Fata tube-wells: Khyber Pakhtunkhwa government decides to launch solar projects

A high-level meeting presided over by the Governor Khyber Pakhtunkhwa Engineer Shaukatullah to examine and evaluate the work performance of departments of Irrigation and livestock in Federal Administered Tribal Areas held at Governor's House Peshawar on Monday. Addressing the meeting the Governor said the government is implementing various projects for improving the living standard of the community and providing the maximum relief to the tribal people. He said that in order to provide equal opportunities of development; mega projects should be started in all agencies of FATA in next annual development program. He said that livestock, agriculture and dairy farming sectors were the backbone of the economy and majority of population was associated with these sectors. He said the government has decided to launch projects of solar energy to run the tube wells for irrigation. He directed all the administrative authorities to adopt austerity measures in the departments of Livestock and Irrigation and to ensure the effectiveness of the respective departments. A detailed briefing was given to Governor from the officials of both the departments, Livestock and Irrigation. Besides additional Chief Secretary FATA, Arbab Mohammad Arif, Secretary AI and C FATA, Syed AmirudDin Shah, Secretary Production and Livelihood development FATA, Jehangir Shah, Director Livestock, Director Irrigation and others also attended the meeting. He said to make sure the quick implementation of the reforms for the larger interests of the people of FATA and categorically stated that no compromise would be accepted in the improvement of overall efficiency of the respective departments. He emphasised and directed to increase the quota for the students of FATA in respective Universities of the country in the departments of Livestock and Irrigation and to make sure to fulfil the deficiencies of the staff of veterinary hospitals and dispensaries. Highlighting the immediate needs of the development work in tribal area, the Governor directed to ensure the participation of the parliamentarian of FATA to make the proposals of mega projects in their region. He said that every possible step would be taken to make sure the expeditious implementation of these mega projects without wasting time. He stressed upon the relevant officials for expediting the work of development projects. He directed the relevant authorities to prepare a comprehensive plan to improve and facilitate deprived segments of the society and involve them in the national development programs.

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Government utilizing all resources to generate energy: Khawaja Asif

Federal Minister for Water and Power Khawaja Muhammad Asif has said that Pakistan Muslim League-N (PML-N) government is committed to cope with energy crisis on top priority basis. Talking to media persons here on Sunday he said that we are mobilising all resources and channels for generating maximum energy and to get rid of loadshedding at earliest possible. The Minister revealed that 21,000 megawatts electricity would be added to national grid with the assistance of China and hopefully this task would be accomplished within next five to seven years. Apart from this 28,000MWs electricity would also be added in national grid with the support of Turkey, World Bank and European countries, he disclosed. Khawaja Asif said we are already working on a strategy for overcoming the electricity loadshedding besides under the programme long, medium and short-term power generating plans would be undertaken for overcoming the energy crisis in the country and private sector would be encouraged under the programme. Special attention will be focused on long-term projects for producing sufficient electricity for catering future needs of the country and these projects would be initiated with the assistance of donor agencies, he said. Apart from this he said several foreign countries have already showed keen interest in investing energy sector of Pakistan to benefit the people of the country. Khawaja Asif said Pakistan is rich in natural resources which are feasible for initiating short and long term hydel power projects for power generation and hopefully work on these projects would be initiated in near future. Khawaja Asif said attractive opportunities are available for the foreign investors in wind, solar and hydel power generating projects of Pakistan and we are also motivating the foreign investors to avail the bright opportunities in hydel and solar sectors adding that hopefully the foreign investors will avail this advantage. Asif said the PML-N government was making adequate efforts for strengthening and stabilising the industrial sector because the industrial sector is backbone of the national economy as well as providing employment opportunities to thousands workers across the country. Despite of cease-fire announcement the militants killed 13 people and term the incident inhuman act and naked aggression against mankind. The Minister was of the opinion that the militants are trying to sabotage the process of dialogues. The government will fulfil its responsibility to protect the life of innocent people and miscreants would be dealt with iron hand, Asif said.

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South Korean company seeks to invest in Khyber Pakhtunkhwa solar power projects

Korean Investment Company, CK Solar Co Ltd shows its keen interest to make investment in solar power projects in Khyber-Pakthunkhwa. A delegation of the Company led by Dr Choi Moon Sok, CEO of the Company, called on the Advisor to Chief Minister Khyber-Pakhtunkhwa and In Charge of Investment Promotion Cell Rafaqatullah Babar at his office in Peshawar in this regard. In the call on meeting a number of potential and possible sectors for Korean investment in the province were discussed in detail. It included city development, transport, livestock, dairy development, hydro-power and fish farming. Talking to the visiting delegation, Rafqatullah Babar said there are immense potentials for foreign investment in the province and, therefore, the present provincial government, since the very first day of its coming into power, has been taking effective and result-oriented measures to attract maximum foreign investors towards the province. "Our measures include provision of the required facilities, environment and security conducive to the investors which are yielding encouraging results because a number of foreign investors have come in contact with the provincial government showing their interest for making investment here," he elaborated. Babar asked the visiting team to provide detailed investment proposals so that it could be made on the same. He assured that the investment cell would extend all types of facilities and co-operation to the Korean investors in the province.

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PPL announces gas discovery at Naushahro Block

Pakistan Petroleum Limited (PPL) has announced a gas discovery at Exploration Well, Naushahro Firoz X-1 in Naushahro Firoz Block, Sindh. According to the company announcement, the PPL is the operator of the Block with a working interest of 90 per cent. Exploration well Naushahro Firoz X-1 was drilled down to target depth of 3,773 m(MD) within Chiltan Formation. Based on gas shows encountered during the drilling and wire line logs evaluation, a Cased Hole drill Stem Test (CHDST) was carried out. After acidization, the well flowed good quality gas at variable rates with the maximum 11.2mmcfd with following wellhead pressure of 2,635 psia and a minimum flow of 1.7mmcfd with a flowing well dead pressure of 375 psia at a choke size of 32/64. The preliminary analysis of the test suggests the discovery to be "Tight Gas", however further evaluation is required to determine the nature and commerciality of the discovery based on the geological, geophysical and engineering data collected during the drilling and testing of the well and also by drilling of addition well(s). In term of section 15D(1) of the Securities Exchange Commission Ordinance, 1969 and clause (XX) of the code of corporate governance, the PPL has also sent information to Karachi Stock Exchange.

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Coal exploration development Punjab, Chinese firm sign MoU

A Memorandum of Understanding was signed between the Punjab government and Chinese Machinery Engineering Corporation (CMEC), here on Monday. Punjab Chief Minister Muhammad Shahbaz Sharif was the chief guest on the occasion. Secretary Minerals Dr Arshad Mehmood and Vice President Li Jingkai from CMEC signed the document on behalf of Punjab government and the Chinese Corporation respectively. Under the agreement, the Punjab government and Chinese Company will cooperate in coal exploration development and its economic utilisation. The Chinese company will also extend co-operation in setting up a power plant to be operated with local coal. The experts of the company will soon reach the Punjab and start coal mining in Salt Range. Chief Minister Punjab Muhammad Shahbaz Sharif welcomed the MoU between the provincial government and CMEC and said Pak-China friendship had turned into strategic partnership. He said that Chinese leadership wanted progress and prosperity of Pakistan and the investment package of 32 billion dollars announced by China was a proof of this fact. The chief minister said that as a result of the biggest foreign investment in the history of Pakistan, not only its economy would stabilise but development projects would also be completed and a large number of job opportunities would be created. He said that the Muslim League-N government led by Prime Minister Muhammad Nawaz Sharif had created a favourable atmosphere for investment in the country. He said that work was being carried out on a big coal-based power generation project in the Punjab and six sites had been selected for this purpose. He said that projects in energy, infrastructure, transport, railways and other sectors had been included under Pak-China economic corridor. He said that coal reserves of 600 million ton were available in the Punjab which could be utilised for power generation and the MoU signed with Chinese company was an important step in this direction. He said that under the agreement with Chinese company local coal would be used for power generation. Vice President CMEC Li Jingkai said that his company would extend all out co-operation for coal mining and setting up of power projects in the Punjab. He said that agreements signed with the Punjab government in energy and coal mining sector would be implemented expeditiously. He said that his company wanted to promote co-operation with Pakistan especially the Punjab in energy production and coal mining and a team of Chinese experts would soon visit the Punjab. The Vice President of the Chinese company also expressed keen interest in setting up of a power plant to be operated with imported coal. Provincial Minister Minerals Sher Ali Khan, Additional Chief Secretary Energy, Secretary Minerals and concerned officials were present on the occasion.

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660 megawatts coal power plant: PPIB to ink MoU with Chinese company today

The Private Power Infrastructure Board (PPIB) and Chinese company Gehzuoba is to ink a pact on Tuesday (today) for the setting up of four 660 MW coal-fired power plants at Gaddani with an investment of $3.5 billion. Ministry of Water and Power set up the Gadani Power Park under the aegis of the Pakistan Power Park Management Company Ltd (PPPMCL) for the purpose of establishing 10 660 MW power plants on imported coal. The government set up the PPPMCL as a special purpose vehicle for dealing with 10 imported coal-fired projects that are expected to be completed by the end of 2018. The PPPMCL would act as the manager for the development of requisite infrastructure such as roads, electricity, residential areas and most importantly provision of water. On Monday, Prime Minister Nawaz Sharif said Pakistan will provide necessary safeguards to foreign investments and urged international companies to invest in Pakistan for best returns. He said this while meeting a delegation led by the President of State Grid Corporation of China (SGCC) Jia Zhiqiang that called on him at the PM Office. The meeting was also attended by Minister for Water & Power Khawaja Muhammad Asif, Chairman Privatisation Commission Muhammad Zubair, Chairman Board of Investment Miftah Ismail and other senior officers. While welcoming the delegation, Nawaz said, "Chinese investments will provide a boost to the economy of Pakistan as China is willing to invest $35 billion in various infrastructure projects within 3 to 5 years." He further said investments in Pakistan will yield high dividends to foreign investors as the business-friendly environment of Pakistan offers great opportunities. Moreover, the government will provide sovereign guarantees to investors to safeguard their investment. President SGCC apprised Nawaz that SGCC is managing around 70 percent of power transmission lines in China. He further elaborated that there are only 6 percent line losses in the transmission system of China owing to better control mechanism, utilising innovative technology and best management practices. During the meeting, SGCC expressed its interest in the energy sector projects particularly power transmission lines. Energy sector analysts told this scribe that the provision of water alone for the 10 power plants will cost tens of millions of dollars. Similarly, over $1.5 billion will be needed for laying transmission lines and other facilities. "As the government will be spending massive amounts on the setting up of infrastructure in the power park, the decision as to which company would be allowed to set up power plants in the park is crucial and it was planned to undertake this process through international competitive bidding, sources added. However, the principle for awarding various works of the power park and extending the licence for the coal-fired power plants have instead been awarded to various parties on the unsolicited mode.

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Oil and refinery sector: five Chinese companies keen to invest in Gwadar

Chairman Gwadar Port Authority (GPA) Dostain Khan Jamaldini has said that Several Chinese companies have shown keen interest to invest in the oil and refinery sector in the Gwadar. While China has already approved nine projects worth $1.8 billion in a bid to fully develop Gwadar port, he said while talking to APP. "The Chief Executive Officer of China Overseas Port Holding Company, Zeng Qing Song is in Gwadar for last three days. Issues pertaining to make port fully functional discussed during the course of meeting," he noted. "Five companies of China, keen to invest in Gwadar approached us, he said adding that every day we receive response from the reputable companies willing to initiate work with us in Gwadar," he maintained. The company holding the control of Gwadar port would invest $775 million, While $1.8 billion would be spent for the expansion of port and development of the Gwadar city. Road linking Gwadar to rest of the cities would complete by 2015, he said adding work on rail track was also underway. Jamaldini has stressed that local population of Gwadar district of Balochistan were the real beneficiaries of the uplift projects underway in the Port City.

Copyright Associated Press of Pakistan, 2014

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China to invest $50 billion in energy, infrastructure projects till 2017

China is to invest $50 billion in energy and infrastructure projects in Pakistan till 2017 of which $35 billion investment is anticipated in energy sector. This was disclosed by the Minister for Planning, Development and Reforms, Ahsan Iqbal at a recent meeting of federal cabinet, presided over by Prime Minister Nawaz Sharif. In the anticipation of massive investment from China, the government has decided to assign army for the security of Chinese workers in Pakistan. Official documents available with Business Recorder reveal that the prime minister stated that the infrastructure projects included Lahore-Karachi Motorway, the Karakorum Highway and expanding the capacity of Gawadar Port. In the transportation sector, the railway line from Peshawar to Karachi would be modernised and upgraded. In the energy sector, ten projects had been approved in Gadani (Balochistan) and six in Thar (Sindh). The prime minister informed the cabinet that during the last eight months, Foreign Direct Investment (FDI) had doubled. China has agreed to invest $4.5 billion each year in Pakistan for the next seven years. This investment of $31.5 billion by one country is unprecedented in the history of Pakistan. According to the prime minister, share of Balochistan in the Chinese investment would be 38%. He pointed out that the size of Pakistan's PSDP was only Rs 425 billion which is quite small for a large population of 180 million. Unfortunately, even this amount is not properly utilised. The quality of projects in the country is poor and they suffer from inordinate delays and resultant cost escalation. In the Neelum-Jhelum project, the cost has increased from Rs 87 billion to Rs 220 billion. In another case, the original cost of Rs 5 billion has escalated to Rs 35 billion and the project is still incomplete. He further stated that the Chinese investment will spur unprecedented growth in the country, for which we need to develop capability and capacity to absorb and manage it. The prime minister argued that it is imperative for improved governance and economic development in the country that a special team of officers who possess the requisite capability, commitment and zeal are assigned important responsibilities. He instructed the minister for planning and development to accelerate work on governance reforms. The prime minister asked minister for planning and development to provide further details of Pak-China Joint Co-ordination Committee visit to China. The minister for planning and development informed the cabinet that during the visit of the Prime Minister of Pakistan to China in July last year, an agreement was reached on the establishment of an "Economic Corridor". During the visit of the Vice Chairman, National Development and Reform Commission (NDRC) to Pakistan, three working groups were set up, one each for Transport, Energy and Infrastructure sectors. Initially, projects to the tune of US $15-20 billion were approved. However, he added that because of hard work during the last six months and confidence of the Chinese government on Pakistani leadership, the number of projects has increased. "We have tried to identify those projects that can benefit the country in the short term. These Early Harvest Projects would now amount to $50 billion. These projects would be completed by 2017," Ahsan Iqbal added. The projects include coal, solar and wind based electricity generation units. An investment of $35 billion is anticipated in the energy sector. These projects would generate 23,000 MW whereas the total generation of electricity in the country till date is only 21,000 MW. The Lahore-Karachi Motorway, expansion of the Gawadar Port and integrated development of infrastructure in the Gawadar area would bring in further investment of $11 billion. The Karachi-Peshawar railway track will be upgraded. The minister for planning and development also pointed out that the Chinese expected us to work at a fast pace and avoid unnecessary delays. He also emphasised the need for improving internal security as concern was expressed by the Chinese government on this account, especially with respect to the security of Chinese nationals working in Pakistan. The cabinet observed that the security of Chinese nationals working in Pakistan was an immediate concern. It was suggested that till the capacity of civil law enforcement agencies is improved, the task of providing fool proof security to the Chinese nationals may be assigned to Pakistan Army. The prime minister agreed to the proposal of assigning the security of the Chinese workers to Pakistan Army. The minister for finance stated that according to JETRO, Pakistan would soon become the second choicest place for Foreign Direct Investment in the world due to improved economic performance. This will be possible if consistency in policies is maintained. He added that Pakistan has also announced 3G auction, which is expected by March/April.

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Exploring sustainable solution for efficiency, conservation: special cell being set up in Punjab Energy Department

Punjab government has decided to set up a special cell in Energy Department to explore sustainable energy solutions for energy efficiency and conservation without bringing down the industrial productivity and the public comfort level. The special cell comprising experts of energy management from German firm GIZ will formulate new Building Energy Codes to promote construction of energy conservation friendly buildings having insulated walls and will also provide consultation to the industrialists for installation of energy-efficient machinery. This was disclosed by Additional Chief Secretary Energy Punjab Muhammad Jehanzeb Khan while delivering his keynote address to a one-day technical workshop on energy management in collaboration with International Finance Co-operation (IFC), a subsidiary body of World Bank, here on Thursday. Turk Principle Energy Specialist Alexios Pantelias, Senior Director American Organisation CLASP Eric Gibbs, CEO Cleaner Production Institute Azhar-ud-Din Khan, representative of GIZ, Germany Dr Frank Fecher and other experts also presented their deliberations in the workshop. The experts of energy management emphasised the need to adopt energy efficient accessories and electrical appliances to not only conserve energy but also make full use of the available scarce resources of energy with a high level of efficiency. The people have been advised to avoid the use of UPS and diesel generators to bring their utility bills to the minimum amount. There are 15.7 million domestic power connections in the province of Punjab and more than 53 millions ceiling and pedestal are in Punjab and up to 150 percent power consumption can be reduced by using such fans as are made through using energy management technology. He said that domestic and industrial consumers should not operate electricity motors at full speed and switch off all equipment from main switch as at least 30 percent electricity is consumed if such appliances are switched off with remote control.

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Byco poised to bring revolution in refining capacity

With the commissioning of the largest oil refinery in the country, Byco is poised to help ease the burden of imported refined petroleum products on the country. Pakistan is in the grip of crippling energy crisis while the government works tirelessly to ease it by enabling domestic solutions. Byco with its oil refining complex and the country's first SPM, located in the province of Balochistan, is bringing a revolution to the domestic refining capacity, increasing it from approximately 12.5 million metric tons per annum to almost 18.5 million metric tons per annum. Full throughput is expected to produce about 1.6 million tons HSFO, 2.4 million tons HSD, 1.1 million tons of MS and 0.8 million tons of LPG on an annual basis, figures much needed for Pakistan's consistently rising energy needs. These and other measures will make the country Pakistan more self-sufficient in meeting its petroleum requirements, greatly reducing the import burden on the government and easing the energy crisis. "We have commissioned Pakistan's largest refinery and are soon to start work on the chemical complex. Our Single Point Mooring has ensured that we get an uninterrupted supply of crude and we will soon be implementing its capacity as a point of export as well. Our retail network is now 242 stations and we are on the verge of launching our own lubricants line. In short Byco is fuelling a nation" said Ms Aatiqa Lateef, Chief of Staff, Byco Industries Incorporated. Byco has invested over $800 million on the various projects in the province of Balochistan out of which more than 50 percent is foreign investment. "We continue to aggressively shun the negativity surrounding investment in Pakistan. In the current economic environment where foreign investors shy away from investments in the country, Byco has achieved various projects of strategic importance and national interest for the country.-PR

Copyright Business Recorder, 2014

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LNG terminal: draft agreement signed

After two days of marathon meetings between Port Qasim Authority''s Chairman Aga Jan Akhtar and Elengy Terminal Pakistan Ltd, the draft agreement for the construction of LNG terminal was initialed by the two sides on Sunday. It is unlikely that any changes will be made in the draft as it has already been cleared by legal experts from both sides. Although details of the agreement could not be known, Chairman PQA will now give a detailed briefing to the Board and after its approval, which is just a formality; the agreement will come into effect. This is considered a major development as in the absence of a LNG terminal country would have continued to suffer the pains of energy crisis.

Copyright Business Recorder, 2014

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Pakistan, Qatar discuss joint investment in energy sector

Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi and Qatari Minister for Energy and Industry, Dr Muhammad bin Sale-Al-Sada discussed pros and cons of Liquefied Natural Gas (LNG) deal at a meeting of Qatar-Pakistan Joint Ministerial Committee on February 18, 2014 in Doha. This was the third session of the committee. According to energy sector experts, Pakistan and Qatar have agreed to at 18 to 19 dollars per MMBTU but the Petroleum Minister has denied this, inexplicably maintaining that there have been no discussions on the price of LNG. Though both sides discussed LNG price which presently has become a point of hot discussion at different fora, high level decision makers are unwilling to reveal the actual price. An official communiqué signed by both the Ministers stated that "both sides shared information on the latest developments in the energy sector and noted good progress achieved in developing the contractual arrangements for the import of LNG and agreed to further engage in detailed discussions regarding specific contractual issues". Both sides discussed bilateral economic relations, reviewed the implementation status of the decision taken at the previous session and expressed their satisfaction over the general progress achieved. Both sides agreed to designate focal persons in the respective areas of cooperation with the objective of yielding better co-ordination and achieve effective progress. Both sides agreed that they will communicate to the other side in writing the list of their respective focal persons in the relevant areas with their contact details before 31st March 2014. Both sides agreed that there is a huge untapped potential in enhancing cooperation in the areas of energy, banking and finance, trade and commerce, labour, human development and cultural exchange, education, science & technology and scientific research and food processing. Details of different sectors are as follows: Petroleum and Energy; (i) both sides shared information on the latest developments in the energy sector; (ii) the Pakistani side shared information on the investment opportunities in Exploration & Production (E&P) joint venture opportunities in offshore and onshore unconventional and conventional areas; (iii) joint investment in downstream refinery and petrochemical projects; (iii) joint international E&P investment projects; and (iv) Independent Power Projects (IPPs). Both parties agreed to work towards developing concrete opportunities in the above areas and to exchange further information through the focal points. The Pakistani side shared a resume of investment opportunities offered by Pakistani state-owned companies, Pakistan Petroleum Limited (PPL) and Oil & Gas Development Company Limited (OGDCL) and also shared the profiles of these companies. Both sides discussed the potential for cooperation in the area of utilisation of Compressed Natural Gas (CNG) in the transportation sector where Pakistan is the world leader. The Pakistani side offered to send a delegation of CNG experts to Qatar to share information and experience and extend cooperation in this area. Both sides agreed to co-ordinate the details of such visit in the near future. Pakistan and Qatar resolved to promote bilateral cooperation in the financial and investment areas and emphasised the benefit of exchanging expertise and developing training programs in the financial and banking sectors to be arranged by the Pakistani side. The content and other details of such programs will be co-ordinated between both sides based on the existing Memorandum of Understanding. Both parties agreed to cooperate in the area of financial monitoring and anti-money laundering, in accordance with the applicable national regulations and international laws. The Pakistani side will share a draft Memorandum of Understanding (MoU) for such cooperation with the concerned organisations with the objective of developing an appropriate agreement in this area. TRADE AND COMMERCE Pakistan and Qatar agreed to facilitate and encourage their relevant bodies for activation of the Pakistan-Qatar Joint Business Council to promote interaction between the business communities of the two countries and convening its meeting at an early date. The Pakistani side expressed the desire to see the trade deficit between the two countries reduced and achieve a more balanced exchange of goods. The Qatari side advised that Pakistan has a great export potential and recommended that more joint efforts be made to promote Pakistani products and facilitate introduction in the Qatari market. Both sides agreed that such effort is better promoted through the private sector with the help of Business Council and Chambers of Commerce. INVESTMENT/JOINT VENTURES The Pakistani side said that a host of investment opportunities are emerging as a result of the privatisation process, in different sectors in Pakistan; the Qatari side expressed interest to study such opportunities. The Pakistani side will provide information and timetable for such opportunities. Pakistani side requested the Qatari side to consider financing the Neelum-Jhelum hydro power project currently under construction in Pakistan. The Qatari side requested more details and update on this project for study. Pakistan requested consideration for export credit facility of fertilisers from Qatar. The Qatari side agreed to refer this request to the concerned party for further review and consideration. Both sides noted with satisfaction the positive development relating to Hassad Food''s investment in Pakistan where the upcoming harvest of Basmati rice will be exported to Qatar shortly. Hassad Food expressed readiness to expand its investment in the future based on such positive experience. Contracting Opportunities in Qatar and Labor Force from Pakistan, the Pakistani side requested information on Qatari infrastructure projects and the possibility for Pakistani construction companies to participate in such projects. The Qatari side advised that all such information is posted on the Qatar''s Public Work Authority''s (Ashghal) website including procedures and conditions for registering as contractor/service provider. The Pakistani side noted that the number of Pakistani workforce working in Qatar dropped considerably during the last ten years as a percentage of total overseas workers in the country and asked what could be done to rectify the situation. The Qatari side advised that they welcome the contribution of Pakistani labor force to the development of Qatar and stated that the local labour market determines the actual requirement. The Qatari side further suggested that cooperation should be established in this area with the involvement of qualified and approved agencies to ensure that applicable rules and procedures are adhered to. The Qatari side also suggested to the Pakistani side to consider including the supply of skilled labor and professionals in the offered services of Pakistan. Pakistan proposed to hold a meeting of joint working group on the employment of human resources from Pakistan to Qatar during the next three to six months for working out detailed modalities. The Qatari side assured that a positive consideration will be given upon receipt of a formal proposal to the Qatar''s Ministry of Labour and Social Affairs.

Copyright Business Recorder, 2014

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Badin Field: exploration of coal resources to be completed by 2016

Geological Survey of Pakistan (GSP) has approved plan to explore coal resources of Badin coal field and its adjoining areas of Southern Sindh (Thar), which will be completed by 2016 at total cost of Rs 170.000 million. GSP is also engaged in exploration of Tertiary Coal in Central Salt Range, Punjab, costing Rs43.350m, over three years implementation period (2013-16). These projects will help in establishing additional coal reserves to meet the growing domestic energy demand and developing the coal fields for supporting power generation. "Constitutionally, coal is a provincial subject. Federal government is mandated with geological surveys, national policy and plan formulation and co-ordination at national and international levels in mineral sector", official sources told APP, here Sunday. He said exploration of mineral and coal resources is undertaken as a regular activity by the concerned Federal and Provincial organizations within their domains through private sector investment as well as public funding. Ministry of Petroleum and Natural Resources has done extensive work, contributing to discoveries of all major coalfields in the country, he added. Besides sponsoring coal exploration and development projects through government funding, the Provincial Governments have granted many coal prospecting and exploration licenses in private and public sectors, which invest their own resources for the requisite exploration work.

Copyright Associated Press of Pakistan, 2014

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Gadani and Jamshoro coal power projects: Dar for expediting work

Finance Minister Muhammad Ishaq Dar has directed the authorities concerned to expedite work on Gadani and Jamshoro coal power projects. The Finance Minister has given directions to authorities concerned while presiding over a meeting on these projects, here on Sunday. Asian Development Bank (ADB) would provide $900 million for Jamshoro coal-fired power generation plant. The minister said that Gadani and Jamshoro coal power projects are government’s top priority. He said the government wants to complete these projects at the earliest to overcome energy crisis in the country. He said that ultra super technology should be used and detailed study from independent sources should be carried out for the project. He said that the government’s resource envelope was limited so, "we have to operate within the available resource space." The Finance Minister said that domestic private sector resources will be encouraged on Built Operate Transfer (BOT) basis and appreciated that this is the least cost energy generation model which will meet our short to medium term energy requirements. Dar urged for putting on fast track Jamshoro coal fired project for which funding is already available from the Asian Development Bank. He also directed the Infrastructure Project Development Facility (IPDF) to work in close collaboration project director at Gaddani project. Briefing the meeting‚ the head of Pakistan Power Park Management Company‚ Nargis Sethi said NESPAK is working on PC-1 of the project‚ which also includes construction of a jetty and other infrastructure. She said ten coal power plants will be established at Gadani Park. She briefed the Finance Minister on the broad framework of the Project. The meeting was attended by Advisor to Finance Ministry Rana Assad Amin, Additional Secretary Shahid Mahmood and senior officials of the Finance Ministry.

Copyright Business Recorder, 2014

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Setting up of LNG terminal: implementation deal to be signed next week

An implementation agreement between Port Qasim Authority (PQA) and Elengy Terminal Pakistan Limited (ETPL) for setting up of an LNG terminal is expected to be signed sometime next week. Following a meeting held here on Saturday between PQA and ETPL officials, Chairman, PQA, Aga Jan Akhtar told Business Recorder that everything has been agreed between the two sides and the implementation agreement will be signed after it is approved by PQA board meeting to be held here next week. Neither there have been any lacunas nor any disagreement on the terms and conditions and all details have been finalised in a smooth manner and congenial atmosphere. The board of directors will be briefed by Aga Jan Akhtar on the finer points of the agreement and after its approval, implementation agreement will be inked to usher in an era that would go a long way in alleviating the gas shortages in the country. The fast track LNG project meeting, aiming to import LNG by end of 2014, was held here on March 7. It was attended by Shahid Khaqan Abbasi, Minister for Petroleum & Natural Resources (MP&NR), Senator Kamran Michel Minister for Ports & Shipping, Abid Saeed Secretary P&NR, Habibullah Khattak Secretary for P&S, Miftah Ismail Chairman SSGC, Zuhair Siddiqui MD SSGC, Mubin Saulat MD ISGS, QED & USAID representatives, Ali Ansari CEO Engro and CEO ETPL Sheikh Imranul Haque. The meeting was apprised that government of Pakistan, Ministry of P&NR through Inter State Gas Systems (Pvt) Limited (ISGS) had decided to import LNG on fast track basis and Elengy Terminal Pakistan Limited (ETPL), a subsidiary of Engro has been selected through bidding process. The project is on tolling basis for a period of 15 years, to handle 400 MMSCFD. The location of the LNG Terminal as proposed by ETPL is adjacent to existing Engro Vopak Terminal Limited Chemical and LPG Jetty. Earlier, ECC had approved the fast track LNG import project and had forwarded the summary of the LSA to the prime minister for final acceptance. Engro Corporation''s subsidiary Elengy Terminal Pakistan Limited''s (ETPL''s) had successfully bid for the fast track LNG. The RFP had requested LNG handling capability of up to 1.5 MTPA within 11 months and up to three MTPA from year two onwards whereas ETPL possesses the expertise to provide the ramped-up quantities within 11 months. The tolling price of USD 0.66/MMBTU is extremely competitive given that in India, LNG tolling price ranges from $0.605 for 1,400 through-put to $1.106 per mmbtu for land terminals. 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 the year 2010 was $0.73 per mmbtu in the US and Canada, $0.87 in China, $0.81 in Europe, $0.89 in South Korea and Japan, $0.72 in the Middle East and $0.71 in Southeast Asia. While giving a briefing to the delegation, CEO ETPL stated that Engro has technical expertise to handle the LNG using Floating Storage Re-gasification Unit (FSRU) vessel and Engro is the only company with the manpower, skills and the environmental and regulatory approvals to provide terminal facilities in the shortest possible time to facilitate offloading of LNG into the country and alleviate the energy shortage in next years winter. He said that Engro''s joint venture with Royal Vopak (EVTL) has an extensive experience of handling LPG and was the first company to construct and commission LPG storage in 1999 and cryogenic facility of ethylene (-103oc) in 2009 in Pakistan. EVTL has handled to date 350,000 KT of LPG. SSGC Chairman confirmed that the LSA has been discussed in presence of international legal experts and national team from SSGC, ISGC and MP&NR and no material changes were made to the LSA. The LSA has a formula in place for the retainage which ensures that a retainage of 1 percent is not exceeded at 400 MMSCFD. Unlike standard LNG import deals, the liability of Engro Corporation is unlimited and without cap. SSGC has even the right to terminate within four months of signing of the LSA if certain governmental approvals are not place saddling Engro Corporation with significant [dead] investment. In case Engro Corporation is not able to meet the first gas date of 11 months from signing of LSA, then Engro Corporation is liable up to US $0.15 million per day. Chairman PQA informed that their LNG consultants (QED UK) while going through the Lloyd''s Register Report (QRA) confirmed that the proposed ETPL site is feasible for the LNG project. PQA has a commendable safety and security record over the last 40 years and possesses the expertise to handle vessels with more dangerous cargo and much larger vessels than the proposed LNG vessels. Minister Ports & Shipping stated that PQA and ETPL are finalising the Implementation Agreement (IA) at Port Qasim due to be approved by PQA Board / MP&S. Engro has been pursuing a floating terminal since the days of Maashal. Engro had earlier conducted a thorough site specific QRA in line with SIGTTO and PIANC guidelines wherein the QRA assessed three of the proposed sites of Engro. The QRA after conducting of thorough real time marine navigation simulations, risk dispersion modelling and hazard identification studies concludes the ETPL Brownfield site adjacent to the EVTL terminal as a safe and viable option, having "certain operational advantages". Hazards of Operability (HAZOP) study for the project was conducted in London in January 2014. The studies were attended by SSGC, PQA, Royal Vopak, QatarGas, Excelerate Energy, Technica LTD and were lead by Lloyd''s Register and ensured that the project meets all international safety requirements. Furthermore, a recently conducted consequence analysis study for the project by Lloyd''s Register concludes that the "operational permanent exclusion zone (PEZ) for the project is determined not to extend beyond the berthing pocket of the Elengy Terminal". A maneuverability study was undertaken and will be followed by a full bridge simulation. Such studies are normally not undertaken for terminals in Port Qasim (eg new terminal of coal). It is expected that Engro''s high safety standards based on DuPont will be also implemented in the new terminal and it will obtain certification of OHSAS 18001, ISO 9001, 14001, ISPS and safety audits will be done by the PQA, SSGC, Ogra, QatarGas, and Excelerate Energy during and prior to commissioning of the terminal. Expressing his views during the visit, Minister P&NR said, "After due diligence and conforming to all reasonableness on international and regional parameters, the petroleum ministry is satisfied that the project is a good deal and worth putting on fast track in order to meet the existing shortfall of gas in the country". Shahid Khaqan Abbasi informed that Prime Minister Muhammad Nawaz Sharif will inaugurate LNG terminal at the end of March 2014 and emphasised the signing of LSA and finalisation of implementation agreement by PQA. Kamran Michael supported the project which is of natural importance. The two ministers, Senator Kamran Michael and Shahid Khaqan Abbasi also took a harbour cruise and visited the site of the LNG terminal.

Copyright Business Recorder, 2014

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South Africa offers expertise in coal technology

South Africa is ready to assist Pakistan in exploiting its coal reserves for power generation and technology of developing gas from coal, High Commissioner of South Africa, Mpendulo Kumalo said here on Thursday. Speaking at a meeting of Karachi Chamber of Commerce and Industry (KCCI), he said South Africa has the expertise and modern technology to extract coal and it can help Pakistan in using its huge coal reserves for overcoming the ongoing energy crisis. He said that South Africa is focusing on enhancing economic relation with Pakistan as much scope for improving economic relationship exists between the two countries. He said that the mandate, which he has received from his government, is to increase exports from South Africa to Pakistan and to project South Africa as a safe country for investments from Pakistan. "Of course, the ultimate goal is to increase the level of total bilateral trade between our two friendly countries" he said. He informed that three trade and business delegation are ready to visit Pakistan during current year but the negative stories about Pakistan, in electronic media on most of the occasions, scared them and they want assurances of security. Kumalo said South Africa is rich in minerals and other natural resources and wishes to encourage Pakistani investors to set up manufacturing plants in South Africa. We offer attractive incentives to investors, and more importantly South Africa is regarded as a gateway to Africa. He said South Africa also offers excellent transport facilities including ports and international airports for the exports of goods. The African continent is the second fastest growing region after Asia and Pakistani businessmen could achieve lucrative results by improving trade co-operation with South Africa. He said Pakistan is also endowed with lots of natural resources and this is an area where both countries should strengthen co-operation for mutual benefit. He said close co-operation between the two countries would not only be beneficial for two nations, it would benefit the two regions as well. He informed that total trade between Pakistan and South Africa amounted to $510 million in 2012. South Africa exports mainly iron, steel, aluminium, and coal to Pakistan while it imports cotton, yarn, textile and leather goods from Pakistan. However, there are many other sectors that could be targeted for South African export to Pakistan. Referring to coal export, he said that the government has limited coal export as it requires coal for its self. Huge construction of small house is under way for poor segment of the society and they too need more electricity, he explained. President KCCI, Abdullah Zaki, said that a preferential trade agreement (PTA) between South Africa and Pakistan can be enacted to provide preferential trade access to enhance bilateral trade. He said that there exists significant potential of exporting foodstuff, fruits, fish, and textile made-up from Pakistan to South Africa. He said that there is also a need of effective trade talks and other trade strategies for promoting bilateral trade between the two countries. Former KCCI President, Majyd Aziz, said Pakistan needs coal technology to exploit its coal reserves and develop energy. He also pointed out that relations between Pakistan and South Africa have remained cordial and amicable since a long time.

Copyright Business Recorder, 2014

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MOL completes work on $225m gas processing plant

ISLAMABAD: MOL Pakistan has announced that its joint venture in Tal block has completed work on Makori gas processing plant at a cost of $225 million, which will immediately start producing 300 tons of liquefied petroleum gas (LPG) per day. “This new addition will take MOL’s production in the country to 300 million cubic feet (mmcf) of gas per day, 21,000 barrels of oil and condensate per day and 300 tons of LPG,” Alexander Dodds, Executive Vice President of MOL Group, said in a meeting with Prime Minister Nawaz Sharif here on Wednesday. Dodds was leading a high-level delegation of the group in the meeting. Federal Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi, Minister of State Jam Kamal Khan and MOL Oil and Gas Company Political Adviser Ali Murtaza Abbas were present. Appreciating the investor-friendly petroleum policy of Pakistan, Dodds suggested that the government should look at other avenues in the petroleum sector including shale gas exploration. The completion of Makori plant will make MOL the second largest producer of oil/condensate and LPG and fourth largest producer of gas in the country. Tal joint venture has so far invested around $1.4 billion in Khyber-Pakhtunkhwa. Petroleum Minister Shahid Khaqan Abbasi said MOL worked with both federal and provincial governments and the local community in an exceptionally professional manner. He asked the prime minister to inaugurate the gas processing facility soon. Federal Petroleum Secretary Abid Saeed asked MOL to step up exploration activities and enhance investment and welcomed the increase in the company’s rig operations, which rose from two rigs to four. Tal block has been jointly explored and developed by MOL, Pakistan Petroleum Limited, Oil and Gas Development Company, Government Holdings Private Limited and Pakistan Oilfields Limited. So far, six discoveries have been made in the block, the first in 2002 and the most recent in 2011. Commercial production has started from five of the discoveries – Manzalai in 2005, Makori in 2006, Mamikhel in 2010, Maramzai in 2011 and Makori East in 2012. Tolanj discovery is under appraisal. The increase in production has coincided with the completion of MOL’s 15th year in Pakistan. With the completion of the new plant, the company’s daily production has increased by 30 mmcf of gas, 7,500 barrels of crude oil/condensate and 300 tons of LPG. Published in The Express Tribune, March 7th, 2014.

Copyright The Express Tribune, March 7th, 2014

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1,320MW electricity: Dubai's ANC to set up two coal power plants

Private Power and Infrastructure Board (PPIB) on Wednesday signed a Memorandum of Understanding (MoU) with Arab National Construction (ANC) Dubai to establish two coal-based power plants at Gaddani to generate 1,320MW electricity. Prime Minister Nawaz Sharif was present at the MoU signing ceremony by Faris Tayeb Abdul Rahim Al-Baker Vice Chairman and Chief Executive Officer (CEO) of ANC and Noor-ul-Amin Zuberi MD PPIB. Two projects each of 660MW capacity would be constructed, scheduled to be completed in three years. The ANC would also construct a jetty along with the construction of the power plants. The project would bring in approximately $2.5 billion investment in next three years. An official said the government plans to construct 10 projects at Gaddani with each 660MW to produce coal-based electricity. He added that Chinese companies have also signed MoUs to construct six coal-based power plants at Gaddani during the recent visit of President Mamnoon to China. He said one project would be constructed by the government of Pakistan at Gaddani. He maintained that nine of the 10 projects are in process to generate 5,940MW electricity. Earlier, the delegation of the Arab National Construction Group, headed by its Chairman Tayeb Abdul Rahim Ahmed Al-Baker called on Prime Minister Nawaz Sharif. The Prime Minister appreciated the power sector investment by the ANC in Pakistan, adding that it would help Pakistan overcome the energy shortage. Nawaz said the MoU with ANC was another step towards energy self-reliance as energy sector is the main priority of the government. He added that 10 660 MW coal-based power plants would be constructed at Pakistan Power Park in Gadani. He said the government also plans to construct two 660 MW coal-based power plants at Port Qasim, 12 660 MW coal-based power plants at Sahiwal and five other locations in Punjab as well as coal mining at Thar coal fields and mine-mouth power plants in Sindh. The other planned projects in power sector are 1,000 MW Solar Power Park in Punjab, 1,420 MW Hydel Power House at Tunnel 4 Tarbela Dam and 1,310 MW Hydel Power House at Tunnel 5 Tarbela. He said the government is offering several incentives for investment in power sector. The Prime Minister stated that signing of MoU with Qatar on import of LNG and $1 billion investment by ADB in Jamshoro power generation project are clear manifestations of foreign investors'' trust in the government''s pro-investment policies. He added that the development in infrastructure is also one of our priority areas and the government welcomes the investments in that area as well. He said the growth rate has gone beyond the target and has been 5.0 percent as compared to last year''s 2.9 percent for the same period. Nawaz maintained that remittances rose by 10.5 percent against the target of 6 percent. He said we have increased the tax revenue targets by 17 percent. Our achievements have also been recognised by multilateral institutions, he added.

Copyright Business Recorder, 2014

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ETPL site safe to handle LNG import

The government is planning to bring the first-ever LNG vessel in the country by the beginning of 2015 following the formal approval of LNG import agreement between the Elengy Terminal Pakistan Limited (ETPL) and SSGC. Well informed sources told Business Recorder here on Tuesday that the energy crisis that is severely affecting the country, Engro Corporation's subsidiary Elengy Terminal Pakistan Limited's (ETPL's) bid for the fast track LNG contract to import up-to three million tons per annum (MTPA) of LNG or 400 MMSCFD of re-gasification liquefied natural gas (RLNG) for the next 15 years is a good omen for the country and economy which has been crippling due to gas and electricity shortages. Considering LNG import, the easiest way to resolve the energy crisis in Pakistan in the short term, Engro has been pursuing a floating terminal at its site since the days of Maashal and eventually obtained an NOC for an alternate site at Khiprianwala in August 2011. Total investment in the terminal operation is now over $100m with storage capacity of 82,400 cubic meters. Over the last seven years, Engro's investments in Pakistan have exceeded $1.8 billion with the company continuing to make strategic investments in sectors that can help avert the looming energy crisis. The LNG issue - one of the most controversial issues in Pakistan's energy space - has been delayed several times, much to the detriment of the progress of the country, where the energy deficit has increased alarmingly, consequently limiting economic growth and power supply to the nation. Gas shortage is estimated to be between 1.5 billion cubic feet per day (bcfd) to 2 bcfd. Two tenders for LNG import - that could have helped the aggravating energy sector - were already scrapped this year. Sources said that the government has shown seriousness to accelerate the LNG import process to bring "fast track" LNG into the country in addition to and not instead of, dedicated terminal(s) that are being tendered. The fast track programme will import limited quantities in order to meet nation's energy requirements on an urgent basis. They said that keeping in view the importance of this strategic deal, the government has ensured that Engro gives serious attention to health, safety and environment while building the LNG import infrastructure as well as during the regular LNG operations. Some vested interests which are working against the import of LNG in the country, accused that ETPL's site is not conducive to importing LNG which was proved absolutely incorrect by a quantitative risk assessment 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 also cites certain operational advantages of it. Moreover, the ETPL is committed to comply with all safety regulations and has agreed to third party vendor assessment. According to official sources, Engro Vopak Terminal (EVTL) is the only company with the infrastructure and spare capacity, the manpower and skills and the environmental and regulatory approvals to provide terminal facilities in the shortest possible time to facilitate offloading of LNG into the country. The EVTL has an extensive experience of handling LPG and was the first company to construct and commission LPG storage in 1999 and cryogenic facility of Ethylene (-103oc) in 2009 in Pakistan. The EVTL has the state-of-the-art integrated bulk liquid chemical terminal, which was established in 1997 with an investment of US $65 million and is designed to handle 75,000 dead weight ton (DWT) vessels. The EVTL has handled the largest ship of phosphoric acid of 31.5 KT with DWT of 33.5 KT in 2013 with commissioning of Phase-IV (Ethylene) in 2009. The EVTL has also handled the largest LPG ship of 9 KT with DWT of 19 KT in Pakistan's history in 2013. In association with its partner the Royal Vopak of Netherlands, the EVTL has the ability to leverage its global experience of two LNG terminals based in Rotterdam and Mexico. The EVTL already ensures the safe handling of LPG and cryogenic ethylene supported by effective procedures and systems. The EVTL, which values health and safety and adheres to international standards, has done quantitative risk analysis (QRA), computer simulation studies of channel of Port Qasim and environment study after which an NOC was issued by Sindh Environment Protection Agency (SEPA). Furthermore, with its Vopak association, it has the ability to leverage its global experience of two LNG terminals based in Rotterdam and in Mexico. Moreover, Port Qasim has the skill set and operational knowledge and has safely been handling vessels of larger or of similar dimensions at the FOTCO and QICT for several years. In November 2010, the business completed 13 years of safe operations without a single employee losing a day's worth of work due to injury. The business launched Pakistan's first cryogenic import facility for ethylene, in line with the group's overall motto of pursuing and enabling excellence. Engro Vopak has maintained safety and quality per international standards of OHSAS18001, ISO 9001, 14001, CDIT (THA) and ISPS. Engro Vopak successfully expanded its LPG storage capacity in 2012; the total storage capacity for LPG now stands at 7000 MT. The EVTL has the only state-of-the-art integrated bulk liquid terminal in Pakistan and Engro has established Elengy Terminal Pakistan Limited. This is an open access, merchant floating storage re-gasification terminal with a storage capacity of 3.5 mtpa. Safety audits will be done by the PQA, SSGC, Ogra, QatarGas, and Excelerate Energy. Before the EE and QGAS bring in any vessel, they will ensure that the terminal, as well as the port meets international requirements. If these are not met, they will not bring their $300 to $400 million vessels into the port. Also project HAZOp has been done in the presence of the PQA, SSGC, Lloyds Register, Qatargas, Engro and Vopak and Excelerate and Technica - this ensures the project meets safety requirements and international practices. The PQA has approved the floating storage and re-gasification vessel (FSRU) offloading at the EVTL. It is also to be noted that safe passage at LNG terminals at Escobar, Argentina and South Haven, UK (100 yards) are about 50% shorter than those at the EVTL (326 yards) and to see this evidence physically the PQA and MP&NR officials have visited these ports. Quantitative risk analysis (QRA) by Lloyd's and Environment Impact Assessment by EMC labels this site having operational advantages such as a jetty purposely built for 75,000 dwt vessel and handling hazardous cargoes. Over 15 years of safe operations and trained staff with existing SOPs. The terminal is close to the PQA and tug operations in area ensure tug availability and quick response time in case of emergencies. The access to navigation channel is already available and no hazard to any residential population centers is there as there is no population in a radius of 5 to 7 KM. The terminal site is protected from tsunamis and open sea waves. The existing infrastructure (jetty, basin, turning circle) is available to handle 138-151k FSRU, hence minimum cost and timeline. Existing utilities (electricity, nitrogen) and safety systems (emergency shutdown system, fire and gas detection system, fire-fighting system) are already available. Modifications to jetty civil design and new mooring analysis have considered passing by vessels and weather with 30 knot winds.

Copyright Business Recorder, 2014

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Energy, infrastructure projects: Chinese company seeks to make $10 billion investment

China Gezhouba Group Corp/China Energy Engineering Group showed interest in investing $10 billion in energy and infrastructure projects in Pakistan and a meeting was held in the Board of Investment (BoI) office in this regard. According to details, Tao Jie Chief Finance Officer, Deng Siwen, Chief Commercial Officer and Syed Ahmed local representative of China Gezhouba Group called on Chairman BoI Dr Miftah Ismail and discussed the signing of MoU with the Board, investment projects to be under taken and the visit of the company's President. Tao Jei briefed Dr Miftah that China Energy Engineering Group is interested in participating in the projects related to Pak-China Corridor and can also offer financing/loans for undertaking these projects. In this regard, the president of the company will visit Pakistan next week and during the meeting with Prime Minister, an MoU of strategic corporation will also be signed with BoI. He further said that the company will participate in the bidding of Gaddani Coal Project and is also interested in Jamshoro Power Project. And they will also work on Engineering Procurement and Construction (EPC) for jetty and transmission lines. Dr Miftah Ismail said that the signing of MoU with the company should not be another agreement. We should work seriously for maturing the investment of $10 billion during the due course of time. He further said that as the company is involved in large number of mega infrastructure projects in China and other countries, we offer the company to bid for the construction of Hyderabad-Sukkur road. The company was also involved in the construction of Jhang road, a part of Lahore to Multan Motorway. China Energy Engineering Group Company Limited (CEEC) was established on September, 2011. It is a sole state-owned company and provides full range of engineering services including feasibility studies, design, procurement, consultancy, planning, financing, construction, management, operation etc. The company has substantial business interests in over 60 countries world-wide with an established presence in countries such as Pakistan. China Gezhouba Group Corporation (CGGC) is affiliated with China Energy Engineering Group Company Limited (CEEC).

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Nawaz seeks to woo oil, gas investors

Prime Minister Nawaz Sharif said the Government is making all-out efforts to enhance oil and gas exploration activities in the country through investment-friendly policies. Talking to Alexander Dodde, Executive Vice President, MOL, who called on him here on Tuesday, Prime Minister said Pakistan has a vast onshore and offshore sedimentary area out of which only around 35 percent is under exploration. Shahid Khaqan Abbasi, Minister Petroleum was also present at the occasion. He further stated that the government believes in providing level playing field to all foreign investors and oil and gas companies and assures them protection of their investments. Prime Minister appreciated professionalism and expertise of MOL and the important role it has been playing in this region for the last 15 years in the development of petroleum and gas sector of Pakistan. MOL management in Pakistan deserves applauds for their role in smooth operations of the company; however, they need to explore more investment opportunities in Oil and Gas Sector of Pakistan, PM further stated. Prime Minister encouraged MOL to acquire new blocks independently or jointly with Pakistan''s state owned Companies, ie Oil and Gas Development Company Limited (GDCL) and Pakistan Petroleum Limited (PPL) through competitive bidding process or joint ventures. Alexander expressed the confidence in present government''s economic policies and appreciated its efforts to boost energy sector in Pakistan.-PR

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TRL may go on steam by mid of 2015

The Al-Ghurair financed, Trans Asia Refinery (TRL) Limited at Port Qasim is expected to go on steam by the middle of next year. The installation and start-up of the project has come a step closer with the issue of tenders for engineering and construction by the operators, Trans Asia Refinery (TRL) Ltd - and the successful completion of a health check on all critical equipment. More than one hundred million rupees have already been spent on the refinery for the last year when the TRL signalled to end the project delays with an announcement that investors had decided "to push the project forward in the interests of all parties and the people of Pakistan". The Trans Asia Refinery is a direct investment of Al Ghurair Investment LLC, a UAE-based family conglomerate and one of the most diverse industrial groups in the Middle East. TRL's CEO, Sultan Al Ghurair said: "We promised last year that we were fully committed to this project and I think the progress we have made since then has borne that out". "We have a thriving, long-term relationship with the Government and people of Pakistan and are delighted to be able to contribute to the economy of the country and the future prosperity of its people". At least four international firms of consultants from Pakistan, India, the UK and US were hired by the TRL to study the engineering of different sections of the refinery, develop 'basis of design' plans and, ultimately, prepare Invitation to bid proposals for various parts of the development. Trans Asia Refinery floated the revised tenders on February 1, 2014, reflecting certain upgrades required meeting the new products specification - and the project has stimulated interest from around the globe. A number of companies are currently preparing their proposals for engineering, procurement and construction contracts. When completed, the TRL plant will produce four million tons of petroleum products every year - all in high demand in Pakistan. Its output will include 80,000 tons of LPG, 455,000 tons of Naphtha, 410,000 tons of Motor Gasoline, 422,000 tons of Jet Fuel and 1,000,000 tons of Gas Oil - of which 630,000 tons will be, treated Diesel. It will also produce 1,050,000 tons of Fuel Oil and 200,000 tons of Bitumen. The announcement of "total commitment" to the Refinery gave the project fresh impetus and began a flurry of activity, starting with an essential check of major critical equipment such as reactors, pressure vessels, columns, towers, heat exchangers and coolers - all now given a 'clean bill of health'. A TRL spokesman said: "All major critical equipment was inspected thoroughly by a world-class third party inspection company and found to be in good condition, as we were confident it would be. This is another significant step forward and, as far as we are concerned, it is now full steam ahead". The TRL refinery will create at least 350 direct jobs and several thousand indirect jobs for Pakistani workers. The government officials have welcomed the project which will reduce dependence on petroleum imports and also the burden of additional foreign currency expenses. It will also boost technology development in Pakistan.

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Coal-based power projects can help control power crisis: chief minister Punjab

Punjab Chief Minister Muhammad Shahbaz Sharif has said that coal-based power generation projects are short-term planning and can help control power crisis to a large extent within a short period of time. He said that the cost of production of electricity from coal is about 50% less than that of thermal energy. He said that the Punjab government is working on a big project of generation of electricity from coal in the province and six sites have been selected for setting up of power plants. He said that there is a need to evolve a complete system for supply of imported coal from the seaports to the sites of the proposed power plants. The chief minister constituted a sub-committee headed by Additional Chief Secretary Energy and directed to submit its recommendations within 14 days regarding the supply of coal, its off-loading at seaports and supply system of railways. He was addressing a high level meeting, here on Sunday. Federal Minister for Railways Khawaja Saad Rafique, Minister for Ports and Shipping Kamran Miachel, former federal minister Shaukat Tareen, Provincial Minister for Minerals Sher Ali Khan, Federal Secretary Ports and Shipping, General Manager Operation Railways, Chief Secretary Punjab, Acting Chairman Karachi Port Trust, Chairman Port Qasim Authority, Chairman Planning & Development, Additional Chief Secretary Energy and senior officials of Railways and NESPAK were present. The participants reviewed in detail the matters regarding a comprehensive system for transportation of imported coal for coal power project. The Chief Minister said that all out measures are being taken for ridding the country of the energy crisis and the work is being carried out on power generation projects round the clock under the leadership of Mian Muhammad Nawaz Sharif. He said that the efforts of the government will succeed and darkness would be removed from the country. He said that every movement is precious and the concerned departments will have to move forward in a planned manner for controlling shortage of electricity. He said that there should be a close co-ordination between the departments concerned regarding transportation of imported coal. He said that there is a need for evolving a comprehensive mechanism for the supply of imported coal from seaports to the power generation plants through railway track. He directed that a comprehensive strategy be evolved for coal power plant projects keeping in view the future needs. He said that Chinese technology should be utilised for the off loading of coal from ships at the ports. The Chief Minister constituted a sub-committee comprising the high-ups of departments concerned headed by Additional Chief Secretary Energy and directed that the committee should consider all aspects of the matters in a professional manner and submit its final recommendations in two weeks. The committee would comprise senior officers of Railways, Port Qasim, NTDC, Karachi Port Trust, NESPAK, PESPAK and Punjab government. Federal Minister for Railways Khawaja Saad Rafiq said that the model of development evolved by Chief Minister Punjab Muhammad Shahbaz Sharif would be followed for proceeding in this matter and Railways will play a key role in the supply of imported coal to the proposed sites from the seaports. Federal Minister for Ports and Shipping Kamran Michael said the way government is moving forward speedily for resolving energy crisis has given the hope that Pakistan would soon counter its shortage of electricity. He said that the target given by Punjab government for supply of coal would be achieved within the time frame. Acting Chairman Karachi Port Trust and Chairman Port Qasim Authority gave briefing on the capacity of their respective institutions while General Manager Railways informed about the supply of imported coal through Railways.

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Energy woes force LSM sector to make alternative fuel arrangements

Persisted energy outages in the country have forced the large-scale manufacturing (LSM) sector to make or explore the alternative arrangements. The State Bank of Pakistan has added a special section on Alternate Energy Resources to its first quarterly report for FY14, to explore the substitute arrangements that various industries have made to ensure smoother production. According to its report, under the alternative energy resources power-intensive units like steel melting, edible oil/ghee and textile spinning industries have opted for generators that run on high speed diesel or furnace oil. While gas-intensive units like paper, glass and chemical industries have been shifted to boilers that can run on coal, waste heat and biomass. Energy availability in Pakistan has been declining over the past few years due to a lack of investment; stagnant supply of domestic gas, persistent inefficiencies in energy-related Public Sector Enterprises (PSEs) and inadequate infrastructure for gas import, it added. Although, all economic sectors have been adversely affected by energy shortages, however, industrial sector has been hurt the most. More specifically, when power and gas outages began in FY09, a number of industries suffered production declines, except those that run primarily on coal. Steel In the steel melting process, scrap is melted by using arc furnaces to form billets. This process is 100 percent electricity intensive and cannot be substituted by any other energy source. Facing power shortages, smaller firms located in Punjab, switched to diesel-run generators, which not only increased production cost, but also reduced productivity, as uninterrupted power supply is required to melt steel scrap. In contrast, larger units in Karachi switched to captive power, which required higher fixed costs, but guaranteed smooth production without interruptions. In contrast, the re-rolling process that requires the preheating of billets to shape final products, is a gas-intensive process. It is estimated that around 12-13 re-rolling units in Punjab have installed coal gasification plants in the previous two years. These plants have been imported from China, and their costs vary from Rs 4 million to Rs 30 million. In addition to this, some smaller units in Punjab are also using used tyres for heating purposes. Paper The production of paper is a very energy-intensive process, and requires a combination of electricity and steam. In Pakistan, natural gas was the main fuel source for generating steam; its shortage has forced many manufacturers to shift to alternative sources recently. For instance, a large number of pulp manufacturers are using bio-mass run boilers (mainly wheat straw, kai grass and bagasse) to drain extra moisture from the paper, while one of the largest paper manufacturer has recently installed a coal/bio-mass run boiler. Textiles Within textiles, spinning and weaving of fiber are electricity-intensive, whereas dyeing and finishing are gas-intensive processes as these require a steady supply of steam. Most spinning units are large-scale units and can afford to run on back-up diesel generators. Weaving sector uses power looms for fabric manufacturing. These power looms are small-scale units, and are forced to shut down in case of power outages as alternative energy sources are too expensive for their modest operations. Some medium-sized power looms have installed diesel generators, but as is the case in the steel sector, this has increased production costs. In contrast, a number of textile processing units have installed boilers that can run on bio-fuels like cotton waste, rice husk, and other waste. As far as big textile groups are concerned, most of them have captive power plants of their own. More importantly, these companies use gas fired combined-cycle power plants, which generate power from gas; and the waste produced is automatically used to generate steam. Chemical In the chemical sector, caustic soda and soda ash are highly gas-intensive products. Recently, the two largest players in Pubjab namely Ittehad and Sitara Chemicals, have shifted part of their production to coal-fired boilers. The other two large producers in Karachi, have also reduced their dependence on natural gas. ICI Chemicals has installed a coal-fired boiler for its soda ash plant, while it has arranged solar thermal boilers for its polymer plant. Engro Polymers, on the other hand, is using excess energy from normal operations to generate steam using waste boilers, for the production of polymers. In the polyester business, the largest manufacturer (Ibrahim Fiber), has installed a gas-run power plant, which produces steam as a by-product that is sufficient for the production of polyester staple fiber. Leather The leather industry requires both electricity and steam for its production process. Punjab-based firms are using diesel-run generators as a back-up for electricity. For the gas-intensive process of drying of leather, a few companies have installed solar thermal boilers to generate steam. In Karachi, where gas outages are not as common as in Punjab, manufacturers only rely on diesel generators. Sugar Presently, most of the large mills are generating power from by-products that is not only sufficient for their own needs, but could add (by some estimates) as much as 3,000 MW of power to the national grid. Realizing this potential, the ECC approved a Framework for Power Co-generation in March 2013, which sets the modalities related to co-generation, tariff determination, and sales to DISCOs. This process would be overseen by the Alternative Energy Development Board. Cement Cement production is the most energy-intensive within LSM. The process of clinkering requires a great deal of energy. This need heating the rotary kiln using various fuels including pulverised coal or coke, natural gas, lignite, and fuel oil. In Pakistan, almost all cement manufacturers shifted from natural gas to coal in the early 2000s, which means this sector was largely immune to the worsening energy shortages in the country. However, as a cost cutting measure, a number of cement manufacturers have started using bio-fuels, especially refused and tyre derived fuels. In addition, some plants have also installed heat recovery plants to generate their own electricity. Fertilizer The fertilizer sector has no alternative, but to use natural gas as the principal raw material (feedstock) in the production process. Due to inadequate availability of gas, fertilizer production has declined in the previous 2 years, and the demand-supply gap in the country had to be met via imports. Edible oil/ghee In Pakistan, edible oil manufacturing includes the refining, bleaching and deodorization of imported palm oil. These processes are highly energy-intensive as they require heating and cooling at different stages. Steam is a primary heating source, for which these units have installed boilers that run on furnace oil and high-speed diesel. Due to high costs and space limitations, manufacturing units cannot afford large boilers that run on bio-fuels, and hence are forced to operate on relatively expensive imported fuels. Glass Glass manufacturing is also an energy-intensive process. Most of the energy consumed comes from natural gas combustion, which is used to heat furnaces that melt the raw material to form glass. In Pakistan, these furnaces are typically fired on natural gas. The share of natural gas in total fuel cost is estimated at 62 percent.38 Most of the large players in this sector are planning to install coal gasifiers within 2 years.

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Model agreements, licences: eight more blocks awarded to E&P companies

The government on Friday formally awarded 8 more Model Petroleum Concession Agreements (MPCAs) and Model Exploration Licences (MPCLs) to foreign and local exploration and production companies. The Petroleum Ministry has taken all the four provinces on board for the execution of Petroleum Policy 2012 and as part of MPCAs and MPCLs has so far awarded 28 blocks out of 50 to Exploration and Production (E&P) companies. Of all the blocks, 21 fall in Balochistan, 15 in Punjab, 6 in Sindh and 8 in Khyber Pakhtunkhwa. The execution ceremony was held here with Shahid Khaqan Abbasi, Minister for Petroleum & Natural Resources as chief guest. The ceremony was attended among others by Jam Kamal Khan, State Minister for Petroleum & Natural Resources and Zahid Muzaffar, Advisor to Ministry of Petroleum & Natural Resources. The respective MPCL and PCAs were signed by Abid Saeed, Secretary Petroleum and Natural Resources, Saeedullah Shah, Director General Petroleum Concessions, Erwin Kroll, Senior Vice President of Middle East and Caspian Region, OMV, Riaz Khan, Managing Director, OGDCL, Asim Murtaza, Managing Director, PPL, Taj Muhammad Afridi, Chief Executive Officer, Al-Haj and other directors from concerned provinces. The government executed 8 more PCAs and MPCL over Block No 2867-5 (Kuhan) and 2866-4 (Margand) with M/s OMV (Pakistan) Exploration Gesellschaft m.b.H (OMV) and Pakistan Petroleum Limited (PPL), block No 3369-1 (Orakzai), 3170-7 (Hetu) and 2868-7 (Zorgarh) with Oil & Gas Development Company Limited (OGDCL), block No 2569-5 (Khipro East) with PPL, block No 3169-4 (Baska North) and 3271-6 (Potwar South) with Al-Haj Enterprises (Pvt) Ltd (AL-Haj). The Kuhan block will be operated by OMV while Margand block will be operated by PPL. The government is giving high priority to develop indigenous hydrocarbon resources to bridge the demand and supply gap. Due to the untiring efforts of Ministry of Petroleum & Natural Resources and especially by the DGPC and his team and keen interest generated by the investment friendly and attractive policies, since taking over by the current government 73 numbers of wells have been spudded and 18 discoveries made so far. The oil production in the country has crossed 90,000 bbl per day on 26.02.2014, which is the highest oil production level achieved so far. Orakzai block is located in Kurram Agency, Orakzai Agency and Hungo district of Khyber Pakhtunkhwa, Hetu block is located in Bhakkar and Mianwali districts of Punjab and D I Khan district of KP, Zorgarh block is located in Ghotki, Kashmore districts of Sindh, Dera Bugti and Jaffarabad districts of Balochistan and Rajanpur district of Punjab, Margand block is located in Khuzdar district of Balochistan and Dadu district of Sindh, Khipro East block is located in Sanghar and Umer Kot districts of Sindh, Kuhan block is located in Khuzdar, Jhal Magsi, Bolan and Kallat districts of Balochistan, Baska North block is located in D I Khan and Tank districts of KP, Zhob district of Balochistan and South Waziristan Agency and Potwar. South block is located in Chakwal, Khushab and Mianwali districts of Punjab. The total area of aforesaid blocks is 18,852.64 squire kilometres and minimum firm work commitment is $60.73 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. OMV (Pakistan) Exploration Gesellschaft m.b.H, existing under the laws of Austria, a 100 percent owned subsidiary of OMV Aktiengesellschaft, started exploration activities in the Province of Sindh in 1991. The first significant gas discovery was made at Miano in Sukkur district of Sindh province in 1993, followed by the Sawan discovery in 1997. Further discoveries, Latif and Tajjal gas fields were made in 2007. In 2011, OMV Maurice Energy Limited acquired Petronas Carigali Pakistan Limited. At present, OMV holds working interest in eight exploration blocks in Pakistan and is operator of five development and production. OMV is currently producing 2,648 barrels of crude oil and 375 Million Cubic Feet per Day (MMCFD) of gas.

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