14TH INTERNATIONAL EXHIBITION FOR THE ENERGY INDUSTRY

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News Headlines for the month of
AUGUST 2014

NRL awards $242m contract to Chinese company

KARACHI: The National Refinery Limited has awarded around $242.135 million of contract of installing its different plants to a Chinese company, revealed a filing at the stock exchange on Friday. NRL, the second largest refinery in the country, awarded the project contract for the installation of desulphurisation and isomerization plants and associated units to China National Chemical Engineering Corporation-Haulu. The project’s total cost is estimated at $242.135 million. The refinery has planned diesel desulphurisation unit to meet the environment standards of Euro 2. Likewise, isomerisation unit was envisaged to increase the production of motor gasoline by 192,000 metric tons per year. Pacific Asia’s standards for clean fuel are currently very diverse, varying widely from country to country and requiring major investment to meet other specifications such as the Euro 2 standards. According to Wood Mackenzie’s study of the clean fuels status in Pacific Asia, Pakistan will need a sizeable investment to bring it refineries in line with the Euro 2 standards. Industry officials said refining companies in Pakistan would need to spend approximately $1 billion to align their diesel and gasoline productions with Euro 2 standards. Pakistan has set a 500 parts/M limit. The fuel generated by Attock Refinery, National Refinery, Pakistan Refinery, Byco and Pak Arab Refinery Co (Parco) all comprise one percent sulfur, corresponding to 10,000 parts/M. December 2012 was the initial deadline set to meet Euro 2 standard. However, when refineries failed to implement desulphurization by the end of December 2012, the economic coordination committee of the cabinet extended the deadline to upgrade their operations by 2015. NRL’s latest financial report also showed the above-mentioned units are expected to be commissioned by December 2015. NRL has been refining crude oil since 1966. It added two refineries: one in 1977 and second in 1985. The petroleum refining and petrochemical company is engaged in manufacturing and supplying of a wide range of fuel products, like lubes, asphalts and specialty products for domestic consumption and export. NRL posted a net profit of Rs961.875 million for the year ended June 30, 2014 as against the profit of Rs2.845 billion in the preceding fiscal year. In FY14, the company’s earnings per share stood at Rs12.03 as compared to Rs35.59 in FY13. Total sales revenue of the company stood at Rs249.769 billion for the year as against the revenue of Rs216.123 billion earlier. The company did not announce any payouts with the financial results.

Copyright The News 2014

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ARL gets RoSPA Award for third straight year

For the third time in a row, Attock Refinery Limited (ARL) was awarded "Royal Society for the Prevention of Accidents" (RoSPA) Occupational Health and Safety Award 2014 under the Gold Category. The RoSPA Occupational Health and Safety Awards scheme is the largest and longest-running programme of its kind in the UK. It recognises commitment to accident and ill health prevention and is open to businesses and organisations of all types and sizes across the World. David Rawlins, award Manager at RoSPA said: "The RoSPA awards encourage the raising of occupational health and safety standards across the board. Organisations that gain recognition for their health and safety management systems such as Attock Refinery Limited, contribute to a collective raising of the bar for other organisations to aspire to, and we offer them our congratulations." ARL is committed to providing the best quality products in market, endeavours to protect the environment and to ensure health and safety of its employees, contractors, and customers and works for continual improvements in Health, Safety, Environment and Quality (HSEQ) systems. ARL is the first amongst major industrial units in Pakistan to have obtained ISO 9001, ISO-14001 as well as OHSAS -18001 certifications and ISO 17025 accreditation. It has also successfully implemented ISO 50001 Energy Management System. ARL's emphasis on safety, environment and quality assurance has enabled it to meet international safety best practices benchmarks as well as compliance with National Environment Quality Standard (NEQS). ARL is a member of the Attock Oil Group of Companies, the only fully integrated Group covering all segments of oil and gas industry from exploration, production and refining to marketing of petroleum products, besides being also engaged in power generation, manufacturing and trading of cement and other entrepreneurial activities.

Copyright Business Recorder, 2014

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Karak North Block: Canadian-based firm awarded exploration license

The Ministry of Petroleum and Natural Resources on Monday awarded a Model Petroleum Exploration License (MPCL) to Canadian-based Tallahassee Resources Inc in Karak North Block. Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi was the chief guest at the signing ceremony. The exploration license and petroleum concession agreement was signed on behalf of government of Pakistan by Abid Saeed, Secretary Petroleum, Saeedullah Shah, Director General Petroleum Concessions (DG), Wasim Ahmad of Tallahassee along with provincial representative of Khyber Paktunkhawa. While addressing the participant, the Minister said Karak North Block was located in Karak district of KP. The total area of aforesaid block is 99.14 square kilometres and minimum work commitment is US $3.07 million. Apart from minimum work commitment, the company is obligated to spend a minimum of $30,000/year in the block on social welfare schemes. He also directed the Director General Petroleum Concessions to facilitate E&P companies to expedite the exploration process to boost the oil and gas production. DG PEC Saeedullah Shah speaking on the occasion said that during past 15 months oil/gas production of the country had significantly increased. He said that up to 140 million cubic feet per day (mmcfd) of gas and 4,000 barrels of crude oil was added to the system from marginal fields, while over 300 mmcfd of gas and nearly 29,000 barrels per day crude oil was added to the system taking local crude oil production from 73,000 barrels per day to 102,000 barrels per day. He said on June 6, 2014 Mari Petroleum Company Limited, the operator of Ghauri block situated in District Jehlum, Punjab, discovered a significant crude oil reserve with estimated production of 5,500 barrels per day. The oil/gas E&P companies are vigorously working in the upstream oil/gas sector under the supervision of DGPC and his team. Over the past 15 months a total of 120 oil/gas wells were spudded and 30 discoveries were made. The oil production in the country has reached over 100,000 barrel per day of oil on May 28, 2014, which is the highest oil production level achieved so far. The Ministry of Petroleum & Natural Resources after taking all provinces on board in finalising Model Petroleum Concession Agreement and Model Exploration License awarded 50 blocks on provisional basis to nine E&P companies on January 21, 2014. Out of which 21 blocks are in Balochistan, 15 in Punjab, six in Sindh, seven in KP Province, and one in Fata.

Copyright Business Recorder, 2014

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Energy crisis: 'government should promote use of biogas'

The government should promote use of biogas to deal with the serious energy crisis engulfing the country since 200-5-06, as current gas production of 4.2 Billion Cubic Feet per Day (BCFD) and total power production of 14,000 megawatts are insufficient to meet the souring energy needs of the country, officials said. A senior official of the Planning Commission of Pakistan talking toBusiness Recorder here on Friday said that the government is taking a number of steps to cope with the energy crisis, but the on-going projects will take five to ten years so to resolve the energy crisis especially in rural areas, the government needs to encourage use of biogas. Pakistan's domestic crude oil production stands at 100,000 barrels per day against total demand of 400,000 barrels per day, while natural gas production stands at 4.2 BCFD against total demand of 6.5 BCFD, the government is dealing with the demand/supply gap though gas load management plan. Pakistan being an agriculture country with a significant livestock population as per estimates there were approximately 27.3 million buffaloes, 28.4 million cattle head, 60 million goats and about 40 million sheep in Pakistan sufficient to meet the energy needs of the rural population, he added. He also said that poultry population also stands at 300 million. By using this source as a mean of energy within a couple of years the country especially rural areas will require no more natural gas connections for domestic as well as commercial purposes. Giving the salient features of the use of bio gas he said: (i) Excrement from animals and humans is turned from waste to benefit, (ii) the waste collected from one cow or buffalo provides enough gas for regular cooking needs, (iii) families with more animals and a larger plant could also use gas for electricity generation, ((iv)) the gas is a renewable, clean-burning source of fuel, ((i)) gas replaces wood or charcoal for cooking, eliminating the need to cut firewood and greatly reducing deforestation, ((vi) Families in un-forested areas no longer have to pay for firewood or charcoal, saving them money, (vii) the post-digestion slurry is (nearly) free of pathogens and creates excellent natural fertilizer and mulch for crops, eliminating the need for families to buy chemical fertilisers, saving them money and retaining more nutrients in the land. (viii) Using gas instead of wood or charcoal eliminates respiratory health issues caused by inhaling smoke from open fires in kitchens and open spaces which affects women especially (who do most of the cooking), (ix) gas provides fuel for boiling water, sterilising it and saving families and children from waterborne diseases (many people already know to boil water, but where fuel is scarce or expensive, free gas may lead to families feeling freer to boil water more consistently), and (x) If used for lighting, families can avoid using kerosene and its dangers-smoke inhalation and risk of fires and burns. The official said that to promote the use of biogas in Pakistan, Netherlands is collaborating with Pakistan with installation of a biogas plant having investment of Rs 300,000 that could run a small-size factory without interruption round the clock. Introduced by the Netherlands Development Organisation, the 100-cubic- metric plants can run generators, dairy farms, poultry farms and other small-size factories on power from biogas with an estimated cost of Rs 300,000. The input of the plant is cow dung or farm waste that is produced by 30 to 40 animals. When contacted Rehmat Tarar of Pakistan Domestic Biogas Program, he said that Rural Support Programmed Network (RSPN) was working to promote use of the biogas. He said that biogas as compared to other fuels like diesel, liquefied petroleum gas (LPG), and electricity was much cheaper and had many other benefits. "It can be used to operate tube-wells plants, reduce labour work of women in rural areas, can be used for cooking purposes as a replacement of LPG and natural gas, help protect from different diseases, have environmental and economic benefits. The official said installation of a biogas plant for operating tube-well cost Rs 170,000, of which Rs 40,000 subsidy was being provided by the PDBP and the rest was being arranged by the client whereas installation of biogas plant for domestic cooking purpose ranges between Rs 20,000 to Rs 170,000. The consumers are being encouraged to install biogas plants and for this purpose four years' free of cost services are also being provided by the registered companies. In Pakistan, SNV Netherland's Development Organisation has worked together with RSPN in the implementation of the Pakistan Domestic Biogas Program since 2009. This is a five-year program being implemented in 12 districts of Central Punjab by the RSPN in partnership with local and national stakeholders. The first nine months of the program were funded by SNV, while the remaining four years after October 2009 till October 2013 were being funded by the Embassy of the Kingdom of the Netherlands in Pakistan, with technical assistance from SNV and Winrock International. By the end of 2014, PDBP aims at setting up 14,000 biogas plants through the development of a fully functional and market-oriented biogas sector.

Copyright Business Recorder, 2014

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40 percent of power generation depends on imported RFO: Hubco chief

Chief Executive Hubco, Khalid Mansoor, has said that country's existing energy mix is neither sustainable nor affordable as around 40 per cent of power generation is dependent on imported residual fuel oil (RFO). It results in higher cost of power generation, alarming levels of circular debt and high import bills draining the country's foreign reserves, he added. Briefing media persons at his office on Thursday, the Hubco chief said that the need of the hour was to minimise dependence on foreign oil. He also emphasized the need for looking towards investments in indigenous resources like coal and hydro which could help build our local energy economy. "Creating this energy economy is not only a stopgap measure to meet the challenges, but also an opportunity that can be seized and cultivated to deliver long-term socio-economic benefits for the country and its citizens," he said. Globally, the percentage of energy production through coal out of the total energy mix is approximately 41pc but in the case of Pakistan it stood at a massive low of 0.1pc. He said that Independent Power Producers (IPPs) are in severe liquidity crisis owing to the alarming level of circular debt and power purchaser's default on its contractual agreement. WAPDA's payment default has resulted in severe effects on the financial viability of the power plants and has affected the sustainability of the operations. Claiming that the IPPs are on the verge of collapse, he said that Wapda and NTDC currently owed Rs 220 billion to the IPPs against the overdue invoices for electricity purchased and received on the national grid. He said that contrary to the power purchase agreement, Wapda has released a meager amount or in some cases absolutely no payments to the IPPs over the past few months. Claiming that the IPPs having most modern machines are producing much more electricity with same fuel compared to public sector. At present, IPPs contributed more than 50pc requirement of Pakistan's energy supply. Mansoor said that maintenance of two boilers of Hubco had been carried out at an estimated cost of $20 million whereas the other two boilers would also undergo the maintenance process in October and November this year. Pointing out that Chinese investors are evincing keen interest in power projects in Pakistan, he said: "We are currently negotiating with different potential investors and sharing our feasibility with them. The initial plan to have a 660 MW coal-based power plant could be backed up with another 660 MW plant if investors are confident to invest further. Speaking of Hubco's growth initiatives, he said that the company has signed an agreement to invest $20 million in Sindh Engro Coal Mining Company Limited for the development of Thar resources. Hubco is also working on developing an imported coal-based project of up to 660 MW at its Hub site, he added. The Hubco chief said that the company wanted to convert its existing RFO based 1,292 MW Hub power plant to coal but in the absence of clear-cut policy guidelines on coal conversion, the Company's Board has decided to keep the conversion on hold and gave go-ahead for setting up a new coal-based power plant.

Copyright Business Recorder, 2014

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Power import from Iran: Ministry seeks government nod to extend contract

The Ministry of Water and Power has reportedly sought the government approval to extend contract with Iranian company M/s TAVANIR for 74 MW electricity import for Balochistan, sources close to Secretary Water and Power told Business Recorder. The sources said Wapda and Power Generation & Transmission Management Company Iran (TAVANIR) entered into a contract for 30 years for sale and purchase of 32 MW electricity on November 6, 2002 at 3 cents per unit for an initial period of three years to meet the demand of Makran Division, Balochistan. Quantum of electricity import from Iran was subsequently enhanced to 39 MW and 74 MW. The electric network of M/s TAVANIR for supply of 74 MWQ was energised on February 16, 2012. Tariff of 39 MW power supplied was fixed at 5 cents per unit for a period of three years up to December 31, 2008 which was further revised and enhanced to 6.25 cents per unit with effect from January 1, 2009 to December 31, 2010. The tariff effective from January 1, 2011 to December 31, 2013 was linked to the formula given in amendment 2 and it remained in practice. For re-fixing the electricity tariff for another term and to discuss other issues, a meeting was held in Tehran between Pakistani delegation and representatives of M/s TAVANIR on March 17-18, 2014. As per minutes of the meeting it was agreed that tariff would remain the same for the period with effect from January 1, 2014 to December 2014 as per the formula of amendment 2. According to official documents, tariff will be Rs 2.5+0.07xP. Electricity price will be payable in cents. 2.5 cents per unit for fixed portion of the delivered electricity cost. The monthly average price of barrel of Opec basket crude oil in $65. Notwithstanding the above-mentioned formula, the price of delivered electricity will remain within the limits of 7 to 10 cents per unit. The revised tariff will be incorporated in the contract through an amendment 3 which be signed accordingly not later than April 30, 2014. Both sides agreed to meet each other in August/September 2014 with the aim to discuss and agree upon the revised tariff effective from January 1, 2015 onwards. The Board of Directors (BoD) of NTDC has already approved the agreed tariff. NTDC will seek Nepra''s approval of the agreed tariff as per regulatory requirement but before making power acquisition request to Nepra, approval of GoP is necessary. "As we get approval from the government, NTDC will submit a petition with Nepra for determination of tariff," the sources concluded.

Copyright Business Recorder, 2014

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BoDs Punjab Bio-Energy meeting: 'feasibility report for first plant at AARI in implementation phase'

Punjab can produce 58.42 million tons of bio-mass from sugarcane, wheat, rice, cotton and maize crops as per a survey conducted in 2013 out of which, 27.85 million tons can be used for production of electricity after meeting the domestic requirements. A consultant firm has pointed out five such places in the province where bio-mass can easily be obtained and feasibility reports in this regard are about to be completed. This was informed at the first meeting of the Board of Directors of the Punjab Bio-Energy (Pvt) Limited here on Tuesday with Company's Chairman Hamid Malhi in the chair. The company is one of the two companies set up by the Punjab government on the directives of Chief Minister Punjab Shahbaz Sharif for producing energy through use of bio-mass. The other company with the same name will work under the Punjab Agriculture Department while the above-mentioned company will be working for the provincial energy department. Secretary Agriculture Punjab Ali Tahir briefed the BoDs about the bio-mass and said there were vast opportunities to produce power through bio-mass. He said one of the feasibility reports about setting up first plant at Chak Jhumra on the land of Ayub Agriculture Research Institute (AARI) had gone in the implementation phase. He said besides producing power those plants would also promote trend of increasing agricultural production and enhance the income of the growers. The Secretary further said that efforts were also being made to attract investment in the sector of producing power through bio-mass while growers were also being imparted with basic information to ease the process of obtaining bio-mass. The meeting also discussed the future strategy in detail and took various decisions in this regard. Others who attended the meeting included Mumtaz Ahmad Manais Chairman Punjab Agriculture and Meat Company (PAMCO), Dr Muhammad Ghaffar Dogar Project Director Bio-mass and representatives of the finance, energy and planning and development departments. Punjab Bio-Energy Private Limited Chairman Chaudhry Hamid Malhi talking to Business Recorder said that provincial government was very keen to exploit the potential of using crops waste or residue for producing energy and meeting the requirements of the province. He said the Company would ensure the constant supply of raw material for five plants to be set up across the province for producing energy. He said the first project or pilot project was being set up in Chak Jhumra which would be completed in next two years was reviewed and discussed in the meeting and various strategies were discussed to make the projects a success.

Copyright Business Recorder, 2014

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Power load management: USAID PDP imparts training to DISCOs' staff

The United States Agency for International Development (USAID) Power Distribution Program (PDP) is strengthening Pakistan's energy sector to improve the supply and distribution of power. In this effort, the USAID Power Distribution Program is training the staff of government-owned power distribution companies (DISCOs)s in power load management, which will eventually help in reducing unscheduled load shedding. In this context, the USAID Power Distribution Program organized a two-day training session for Faisalabad Electric Supply Company (FESCO) officials in Faisalabad. CEO FESCO Rashid Aslam distributed certificates among the training's participants. The training was attended by 25 FESCO officers including Executive Engineers (XENs), Subdivisional Officers (SDOs) and Chief Engineer (CE) Transmission & Generation levels. The United States Agency for International Development (USAID) Power Distribution Program has successfully implemented its "Load Data Improvement (LDI) Program" in DISCOs, aimed at minimising unscheduled load shedding. Automatic Meter Reading (AMR) devices were installed on a fast-track basis in all DISCOs including FESCO. The project also included the upgrade of each DISCO's Power Distribution Center (PDC) and accordingly FESCO's PDC was upgraded and made functional on May 30, 2013, with live data now being acquired from all of its grid stations and outgoing feeders. The National Power Control Center (NPCC) supplies electricity to FESCO which then distributes it to the end consumer. Previously, the actual load data on incoming and outgoing feeders of grid stations was read manually by operators and transmitted telephonically to the DISCO's PDC. This information was then manually transmitted to the NPCC for generation dispatch, in a process that was both time-consuming and opened the information to easy manipulation, with a distinct absence of accountability and oversight. Currently, under USAID's LDI Program, the FESCO PDC is outfitted with multiple screens displaying live load data by grid substation and feeder. Power factor information is also displayed indicating when capacitor banks should be deployed to improve the voltage level. To date, a total of 1,064 AMR meters have been installed on 85 grid stations of FESCO that are reporting live load data information to perform effective load management and curtailing unscheduled load shedding. The LDI project has helped FESCO in almost eliminating unscheduled load shedding, obtaining optimum utilisation of available power, target planned load shedding resulting in increased revenues, and improving FESCO's operational and financial performance. The USAID Power Distribution Program is a five-year USAID funded project. Through this program, the United States Government provides assistance to the Government of Pakistan in its efforts to reform the power sector and mitigate the current energy crisis. The Program is helping government-owned DISCOs improve their performance by reducing losses, increasing revenues and enhancing customer services. More information can be solicited from its website: http://pdip.pk

Copyright Business Recorder, 2014

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AJK government to launch plan for electrification system uplift

AJK government has launched an integrated phased development plan for the uplift of the electrification system in three districts of Mirpur, Kotli and Bhimbher in Mirpur division, official sources said. Official sources told APP that uplift plan includes improvement of existing supply lines, instillation of new express feeders and high power transformers in all the three districts. AJK Electricity Department have proposed the priorities to achieve the current fiscal year development target fixed for entire Azad Jammu Kashmir including Mirpur division to provide uninterrupted power supply to the consumers. Elaborating the ongoing financial year development plan in Mirpur circle the sources said that the gigantic plan involved the installation of new latest transformers as well as high power and light transmission poles in all the three districts of Mirpur division including Mirpur Kotli and Bhimbher.

Copyright Associated Press of Pakistan, 2014

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Dar, Olson discuss progress on energy projects

Richard G Olson, US Ambassador to Pakistan called on the Finance Minister Senator Mohammad Ishaq Dar here on Tuesday and discussed progress made so far on economic co-operation between the two countries and expressed their satisfaction. The Finance Minister informed the Ambassador that overall economic situation in the country is satisfactory, as all the economic indicators are reflecting positive trends and now the government is working to consolidate the gains made during the last one year. He also discussed funding for ongoing and future energy projects which the government intends to launch soon. He underlined the importance of completing the ongoing energy projects on the fast track. Both the sides also discussed progress made on CASA-1000 and Diamer Bhasha Dam projects. The Ambassador assured the Finance Minister that the US would continue to build economic relations and partnership with Pakistan with the aim to bring development and prosperity in the region. The Ambassador also expressed US keen interest in relief and rehabilitation of the Internally Displaced Persons (IDPs) in NWA. The Finance Minister informed that the diplomatic and donor community based in Islamabad will be briefed by the concerned departments for the rehabilitation plans. He appreciated US support for IDPs and hoped that the international community will join hands with the Government of Pakistan for rehabilitation of IDPs. The Ambassador appreciated the decision of the government for allowing live cattle import from the countries where there are minimum risk of BSE infected cattle. The Ambassador also informed that the US investors are actively participating in divestment of GOP shares in public sector enterprises. The Finance Minister informed that the government was able to fetch good price for PPL and UBL shares. He said that the plan for divestment is on track and the whole process will be carried out with complete transparency and fairness. The US Ambassador informed the Finance Minister that the reimbursement of Coalition Support Fund is on track and payments will be made according to the schedule.-PR

Copyright Business Recorder, 2014

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KP starts work on 356 micro hydel power stations

The KP government has started construction work on 356 micro hydel power stations in different backward areas to resolve the current energy crisis in the country. This was stated in a meeting of the Board of Directors (BoDs) of Pakhtunkhwa Energy Development Organization (PEDO) held here on Tuesday. PEDO Chairman Tariq Iqbal Khan presided over the meeting. The meeting was also attended by the Secretary Energy and Power Sahibzada Saeed, Secretary Home Syed Akhtar Ali Shah, Additional Secretary Finance Engineer Khan Zeb Khan, Sardar Mohammad Tariq, Rohail Mohammad, Raqeeb Khan, Ghulam Sarwar, Zahidullah Shinwari, Engineer Nauman Wazir, Secretary Board and CEO PEDO, Engineer Bahadur Shah and CEO KPOGCL Razi Uddin. During the meeting the board has been given a detailed presentation regarding the pace of work on ongoing energy projects and in this context certain decisions were made. It was expressed a great optimism over the steps of the present provincial government to start up 356 mini micro hydel stations in various backward areas where the electricity facility is not available. Moreover, it was decided that a steering committee will be constituted to look into the pace of work and performance in these stations. In addition to this, it was also decided that the province will built a 400MW thermal power station of its own available natural gas recourses for minimising loadshedding crisis. During the meeting, the PEDO's finance, accounts and audit committees were reconstituted and various responsibilities were assigned to its members. The PEDO chairman has stressed upon the various technical expertise that are working in energy sector to consume their maximum strength to complete the hydel as well as other energy development projects in the given time period so that the people of this province could be benefited early.

Copyright Business Recorder, 2014

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10,400 megawatts projects: Beijing to make required funding

Pakistan and China have signed an agreement according to which Beijing will fund 14 hydel and thermal power projects of 10,400 MW in Pakistan on first priority list. Pakistani delegation led by Secretary Water and Power Nargis Sethi comprised senior officials from the Ministry, Private Power Infrastructure Board (PPIB), Economic Affairs Division (EAD) and Planning Division. The team held detailed negotiations with the Chinese government and finalised an agreement which will later be submitted to the federal cabinet for approval. Prime Minister Nawaz Sharif has congratulated his energy and economic team on obtaining approval of the Chinese government for putting the following 14 power projects, which would generate 10,400 MW of electricity, on first priority list: (i) Port Qasim (coal fired) 1320 MW; (ii) Sukki Kanari (hydropower) 870 MW; (iii) Sahiwal (coal fired) 1320 MW; (iv) Engro Thar (coal fired- mining of block 2) 660 MW; (v) Muzafargarh (coal fired) 1320 MW; (vi) Gwadar (coal fired) 300 MW; (vii) Quaid-e-Azam solar park (Cholistan) 1000 MW; (viii) United Energy (wind power, Karachi) 100 MW; (ix) Dawood (wind power, Karachi) 50 MW; (x) Sachal (wind power) 50 MW; (xi) Sunnec (wind power) 50 MW; (xii) Rahimyar Khan (coal fired) 1320 MW; (xiii) SSRL Thar (coal fired) 1320 MW; and (xiv) Karot (hydropower) 720 MW. These projects would commence immediately and be in operation by the year 2017-2018. In addition, there are few other power generation projects totalling 6445 MW which would be completed in the second phase on a fast track basis. The Prime Minister said that this gesture of the Chinese government manifests the deep cordial relations the country has with Pakistan as well as showing the confidence of the international community in the policies of the government. The Prime Minister was pleased to note that the MoUs that Pakistan had signed with China in the recent past are now being translated into on-ground projects. He expressed the confidence that this massive addition to the power sector of the country would prove immensely beneficial in overcoming electricity shortages. He said this is part of the government’s energy roadmap which aims at ensuring provision of cost effective electricity to the masses. He said these are the fruits of democracy which have started to reach the people. He said the government’s desire and focus is on removing unemployment, eliminating power shortage and bringing economic prosperity and "we will stay the course". When contacted a spokesman for Water and Power said that as and when the team reaches Islamabad, a detailed briefing will be given to media.

Copyright Business Recorder, 2014

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Minister inaugurates 500kv DG Khan Grid Station

Minister of State for Water and Power Abid Sher Ali inaugurated newly constructed 500Kv DG Khan Grid Station along with 30-Km long 500Kv Transmission Line by NTDC on Wednesday. He said present government is focusing on improvement and up-gradation of electricity transmission system along with the power generation through all available resources. According to him, the National Transmission and Despatch Company (NTDC) have expedited the up-gradation of electricity transmission and distribution system in compliance with Prime Minister's directives to facilitate the smooth injection of additional power generation. He said this grid station and transmission line has been completed with the cost of Rs 4,500 million and is envisaged both for southern Punjab and Balochistan to meet with the growing power demand. Earlier the MEPCO and QESCO networks had long Transmission Lines, which were causing low voltage problems along with forced load shedding in both provinces. Completion of this project would not only enhance the transmission system capacity and system reliability of existing MEPCO and QESCO system networks but also act as bridge between Punjab and Balochistan. The 500Kv DG Khan Grid Station will feed 132KV Grid Stations of DG Khan (Sakhi Sarwar, Choti, Daajal and Jampur) and will provide third alternate 220KV source to Balochistan Province through its 132KV Grid Stations of Loralai, Pishin, Qilla Saifullah, Muslimbagh, Khanozai, Harnai and Zhob Districts including Duki, Sinjavi, Mekhter, Kingri, Rakhni and Zhob. It will also help to meet load growth, line losses and forced load shedding along with improvement in voltage profile and system reliability in said areas. While appreciating the efforts of NTDC engineers and its staff, Abid Sher Ali added that apart from completion of 500Kv DG Khan Grid station, NTDC has completed/constructed series of grid stations both at 220Kv grid station Khuzdar and 220Kv Ghazi Grid Station Lahore in June 2014 along with 220Kv Okara Grid Stations in July this year. Recently, NTDC has also installed huge transformers of 250MVA at 220Kv Bund Road Lahore and 160MVA at 220Kv Grid station Mardan. Hence, the government is all out to overcome the menace of load shedding and to provide relief and uninterrupted power supply to consumers, he added.

Copyright Business Recorder, 2014

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PTI chief to inaugurate hydropower project today in Swat

Chairman PTI Imran Khan and KP CM Pervez Khattak will inaugurate ground work on 150 KW Bar Lalkoo-Sakhra Mini Hydropower Project on Swat river at Matta today (Thursday). It will also be the opening of the series of 350 small hydel power stations to be established on rivers in Malakand region that besides overcoming the load-shedding will also pave way for setting up new Industrial estate near Chakdara and providing cheap electricity to its factories to attract maximum investment in the province.

Copyright Business Recorder, 2014

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'Tarbela-Swabi transmission line to be completed before Eidul Azha'

The Speaker of Khyber Pakhtunkhwa Assembly, Asad Qaiser, has said that work on Tarbela-Swabi transmission line would be completed before Eidul Azha. Addressing a public meeting in Chota Lahore in Swabi, he said the establishment of Gajju Khan Medical College will usher a new era of development and progress in the area. He said a fund of Rs 8.5 million has already been approved for the construction of Chota Lahore canal, while classes in the Women University of Swabi have also been started. He said that establishment of a separate power feeder for Chota Lahore has been approved and a notification in this regard had also been issued. He said work on the project would start soon. Similarly, he said that installation of 21 new power transformers has also been approved for the area while the replacement of old transmission line will resolve the problem of low voltage.

Copyright Business Recorder, 2014

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MoIT introduces self-managing energy systems in buildings Ministry of Information

Technology and Telecommunications (MoIT) has completed a project which was launched to introduce a system to conserve energy usage in buildings. The energy conservation, cited as the 'most important fuel' in energy generation, is possible in buildings only if usage is known in real time. Moreover, if heavy duty devices could be controlled in an automated way then more energy could be conserved by adjusting the usage of these devices automatically. National ICT R&D Fund, a department of the Ministry executed the project in collaboration with Lahore University of Management Sciences (LUMS). Official sources on Friday said with this information one could plan energy usage, thereby reducing energy consumption and saving bills. They said buildings such as houses, offices and other structures were the biggest consumers of energy and according to a study out of all consumers of energy in most developed countries 37 percent of energy was consumed by buildings. This is ahead of energy consumption in industrial sector which consumes 28 percent and transportation sector which consumes 32 percent. Elaborating further, the sources said in order to conserve energy, the supply and usage in buildings must be treated as a self-managing system. The Self-managing Energy System (SES) in buildings is able to get goals, priorities and constraints from the consumers while its key benefits are to develop a localised low cost Home Area Network implementation for controlling heavy duty electric appliances for energy conservation, and if alternate sources of energy such as solar cells, wind energy or PHEV (Plug-in Hybrid Electric Vehicles) are available then SES will be able to incorporate it seamlessly into the system. The sources said the benefits that would be achieved using SES are: using a very simple user interface to allow the consumers to state goals, priorities, and constraints on energy usage in a typical building to automatically plan energy usage through controlling devices, make the consumers, aware of their energy usage patterns and show them the energy and cost savings. It has also ability to seamlessly integrate alternate sources of energy such as solar energy in overall energy systems of buildings. The sources said with global warming and impending scarcity of fossil fuel, cleaner sources and better utilisation of energy has been considered as a major goal for future technology advancements and research and to this end, many governments world-wide are working on a new energy infrastructure commonly known as "The Smart Grid" which is envisioned to better manage the processes of energy generation, transmission and distribution. The conservation of energy and using alternate cleaner sources of energy in buildings is cited as a major step towards solving energy shortage problems faced by developing countries such as Pakistan. Another possibility is to use low-powered alternate energy sources such as solar cells and wind turbines in buildings to reduce the dependence on energy purchased from power companies.

Copyright Associated Press of Pakistan, 2014

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Jhimpir, Gharo clusters: ECNEC approves WPPs worth Rs 11.27 billion

The Executive Committee of National Economic Council (ECNEC) has approved Rs 11.277 billion Wind Power Plants (WPPs) at Jhimpir & Gharo clusters. Source said it is anticipated that around 1,756 MW power from Wind Power Plants (WPPs) at Jhimpir & Gharo clusters will be available from 2016. The project envisages evacuation of power from wind power plants at Jhimpir & Gharo Wind Clusters through construction of 220 KV and 132 KV double circuit transmission lines along with associated 220 KV sub-stations at Jhimpir and Gharo and extension of 500/220 KV sub-station at Jamshoro. Phase-1 of the project envisages laying of 132 KV transmission line for interconnection of Wind Power Plants (WPP) to 132 KV sub-station at Jhimpir, laying of 132 KV double circuit transmission line from Jhimpir to Tando Mohammad Khan Road (total length of transmission line is 107 km). The phase-11 comprises: (i) the existing 132 KV Jhimpir collector sub-station will be upgraded to 220KV; (ii) construction of new 220 KV Gharo substation;(iii) extension of Jamshoro 500/ 220 KV substation;(iv) laying of 220 KV double circuit transmission line from Oharo to Jhimpir and TM Khan Road (145 km); (v) laying of 132 KV transmission line for interconnection of WPPs with 220 KV Gharo substation (85 1cm). An amount of Rs 5.047 billion has been allocated in the Public Sector Development Programme (PSDP) for 2014-15. Sector Issues: The ECNEC was informed that the project was considered by CDWP in its meeting held on 02-05-2014 and was recommended to ECNEC in principle subject to rationalization of cost by a committee comprising Chief (Energy), Co-ordinator (Energy) PD&R, representatives of NTDC, Alternate Energy Development Board (AEDB), Sindh Government and Finance Division. In compliance with the CDWP decision, the committee held its meeting on 26-06-2014 and rationalized the cost from Rs 11.701 billion to Rs 11.277 billion with Foreign Exchange Component (FEC) of Rs 5.281 billion. Minister for Planning, Development and Reforms has raised serious concern over the completion period of the project and wanted it to be completed within its stipulated timeframe of four years.

Copyright Business Recorder, 2014

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US hails Prime Minister's focus on energy crisis, extremism: Fatemi

Tariq Fatemi, a top diplomat, has wrapped up his US visit during which he met with senior Obama administration officials, key legislators and think-tanks members, saying there is appreciation for the way Prime Minister Muhammad Nawaz Sharif is tackling the energy crisis and confronting the scourge of extremism and militancy. Fatemi, Special Assistant to the Prime Minister on Foreign Affairs, also paid, in the course of his week-long trip, a flying visit to New York where he addressed the United Nations Security Council and held a series of meetings at which he underscored the urgent need to end Israeli attacks against the Gaza Strip. About his talks in Washington, which began on July 21, he said there was now better appreciation of each others' point of view on issues of concern to the two countries. "My visit was timely, productive and comprehensive- it took place when important developments are talking place on our eastern and western borders," Fatemi said in an interview with APP. He was obviously referring to the emergence of new leadership in India and the process of political transition in Afghanistan. "I was able to brief my interlocutors on the priorities of Prime Minister Nawaz Sharif's government - both as regard to domestic policies as well as foreign policy objectives," he said. On the energy issue, he said, they assured him that the Obama administration would continue to remain engaged with Pakistan as a resolution of this crisis would help strengthen the country's economy. The ongoing military operation against militants in North Waziristan, Fatemi said, was seen in Washington as the outcome of a national consensus resulting from the Prime Minister's efforts to first engage with the militants in a dialogue, and undertake military operations only when it becomes inevitable. As regard the Prime Minister's foreign policy goals, he said, there was acknowledgement that the Prime Minister was assiduously promoting policies that would create a peaceful neighbourhood. In this regard, he pointed out Nawaz Sharif's outreach to Afghan President Hamid Karzai and Pakistan's quiet assistance in ensuring peaceful, orderly presidential polls in Afghanistan by sealing the borders. This was seen as an evidence of as major shift from the earlier years when Islamabad was perceived to be interfering in the Afghan domestic affairs. Prime Minister Nawaz's repeated public declarations that Pakistan wished to see Afghanistan as an independent, sovereign and united country was also noted. The Americans, Fatemi said, appeared confident that Prime Minister Sharif's sincere endeavours to promote the normalisation process with India. He said they regarded it as the right policy, which would not only reduce tensions between the two countries, but also create the ground for meaningful economic and commercial engagement between them. "My mission in Washington was to keep American officials both in the State Department and other departments fully briefed on all aspects of our bilateral ties," the special assistant said, adding that, in turn, he was able to get a better feel of how Washington sees the development in the region. He said there was mutual desire to promote peace and stability in the region. Replying to a question, Fatemi said he discussed at length the ongoing military operation, emphasising that it was focused, objective-oriented, and most importantly directed at all militant and extremists who are equally treated. The special assistant said Pakistani military's well-planned operation would be far more successful and yield greater results should the US, Nato, ISAF and Afghan forces undertake similar operations on the other side of the border. "I was assured there was great merit in my plea for a reciprocal action."

Copyright Associated Press of Pakistan, 2014

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US moot explores ways to overcome energy shortages

Pakistan’s energy crisis could best be addressed through a holistic approach integrating immediate improvement in current generation and supply systems with judiciously planned exploitation of diverse sources, top experts emphasized at a one-day conference. Organized by Woodrow Wilson Centre for International Scholars, the conference brought together public officials and leading private sector experts who explored ways including alternative sources of energy - solar and wind - to overcome the chronic shortages causing a loss of up to three percent of GDP each year. Islamabad is striving for development of a low cost and sustainable power sector that would meet its energy needs in a sustainable manner, Mussadiq Malik, Advisor to the Prime Minister on Water and Energy, told the inaugural session of conference, moderated by Robert Hathaway, Director Asia Programme. The conference was informed that Pakistan’s goals include supply of inexpensively generated electricity at affordable rates for its 180 million people, which can be possible through high levels of generation, transmission, and distribution efficiency. Pakistan, Malik said in his presentation, aspires to eliminate the demand supply gap, reduce true economic cost of power to single digits, and eradicate pilferage in five years. He identified demand supply gap, lack of affordability and inefficiency/pilferage as the three major power challenges in Pakistan. In 2012 the average generation stood at 10,808 MW pushing the average demand-supply gap up to 4,608 MW. "We will encourage competition by developing energy corridors and favourable tariffs for low cost energy sources, and creating a key client management system," the advisor said. In her presentation made from Islamabad via a video link, Secretary Water and Power Nargis Sethi focused on a series of reforms needed to revamp the sector including efforts towards rationalisation of tariff and improved recovery. She also underscored the importance of balancing energy mix, pointing out that a high dependence on imported oil for electricity production places considerable strain on the economy as compared to that of domestic gas and hydropower. "Thus Pakistan needs to have an energy mix so it is not dependent upon expensive fuel to generate that energy. Costs can be brought under control by first shifting the generation fuel mix from the expensive residual furnace oil to coal and hydel-based generation." Javed Akbar, an energy entrepreneur, called for a policy thrust on encouraging hydel, wind, and solar power growing to 50 percent of electricity generation within 10 years. He particularly advocated the use of solar energy for residential needs. The participants included Robert Lesnick, senior natural gas consultant, World Bank "Oil and gas," Khalid Mansoor, Chief Executive Officer, The Hub Power Company Limited (Hubco) "Coal," Shannon Grewer, Managing Director, EMI Advisors LLC "Coalbed methane, geothermal, and small hydro" Chair, Ziad Alahdad, former director of operations, World Bank'' Energy bureaucracy, "Akhtar Ali, chief executive officer, Proplan Associates" Energy pricing and efficiency, William B Milam, former ambassador and senior scholar at the Woodrow Wilson Centre and Michael Kugelman, senior associate for South Asia.

Copyright Associated Press of Pakistan, 2014

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Proposed LNG terminal: government decides to build pipeline from Nawabshah to Gwadar

Pakistan has decided to construct a 711-km gas pipeline from district Nawabshah to Gwadar to connect the proposed Liquefied Natural Gas (LNG) terminal which would also be extended by 71-km towards Iranian border for transportation of gas under Iran-Pakistan (IP) gas pipeline project, provided the US sanctions against Iran are lifted, Petroleum Ministry officials said. According to a senior official of the Petroleum Ministry, Pakistani authorities have informed the Iranian government that Pakistan is going to initiate the laying of 711-km of pipeline from Gwadar to Nawabshah as a part of the LNG import project, whenever the US sanctions on Iran were lifted, the pipeline would be extended by 71-km to Iranian border in a bid to transport the gas. "Whenever the US sanctions are lifted, the Nawabshah-Gwadar pipeline will be extended from Gwadar to MP 250, a point at Pak-Iran border for the import of Iranian gas," the official added. Replying to a question regarding the penalty clause of the IP project according to which if Pakistan failed to complete it by the end of December 31, 2014 an amount of $3 million as penalty would be paid to Iran, the official said the step of constructing the pipeline has been taken to avert the penalty. Pakistan has already invoked the clauses pertaining to force majeure written in the agreement in view to the US sanctions that have factually impeded Pakistan from initiating the laying down of the pipeline. He said that there are international sanctions on import of natural gas from Iran. He cited a recent example that a fine of about $9 billion has been imposed on the largest French bank, BNP Paribas, because of its financing transactions with Iran and other countries in violation of the US-imposed sanctions. Despite the eagerness expressed by successive Pakistani governments for the project, no government has been able to move ahead. Pakistan faces a daily shortage of about 2 Billion Cubic Feet per Day (BCFD) of natural gas. The medium-term solution to this problem is import of gas through pipelines or in the form of liquefied natural gas (LNG). Although the outgoing PPP government held ground-breaking ceremony of the IP project in early 2013, no tangible development has been made related to work on the project. The ministry has prepared a summary to be sent to the next meeting of the Economic Co-ordination Committee (ECC) of the cabinet, seeking permission for the construction of a LNG terminal at Gwadar port with the capacity to handle up to 1 Billion Cubic Feet per Day (BCFD) of LNG to deal with the prevailing serious energy crisis. As per plan, the IP gas pipeline project Pakistan would import 750 Million Metric Cubic Feet per Day (MMCFD) of gas from Iran''s South Pars gas field on the Pakistan-Iran border, where Iran has almost completed the construction of pipeline, while Pakistan as yet is unable to start build the pipeline. Companies from China, Japan and Russia have shown an interest to build the LNG terminal at Gwadar port and lay down the pipeline, he said. After the ECC approval, "We will try to get this project included in the list of early harvest projects to be pitched before China for funding and completion of the project." The pipeline will require $1 billion and over $2 billion will be needed to construct the terminal with LNG handling and re-gasification facilities and to erect large LNG storages facilities. "This will be the second LNG terminal as the first fast track terminal is being constructed by Engro''s Elengy Terminal Pakistan Limited (ETPL) at Port Qasim, which is scheduled to be completed by March 31, 2015.

Copyright Business Recorder, 2014

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OGDCL discover gas from Pasakhi Deep Well No 1

Oil & Gas Development Company Limited (OGDCL) has discovered 14.015MMSCF of gas and 125 barrel per day of condensate from Exploratory Well Pasakhi Deep Well No. 1, which is located in district Hyderabad of Sindh Province. OGDCL with 100 percent working interest in Pasakhi Deep D&PL lease discovered Gas and Condensate from its Development Well i.e. Pasakhi Deep Well No. 04. The structure of Pasakhi Deep Well No. 04 was delineated drilled and tested using OGDCL''s in house expertise. The well was drilled down to the depth of 3460M, targeting to test the hydrocarbon potential of Massive Sands of Lower Goru Formation, whereby reserves of hydrocarbon have been discovered in exploratory well Pasakhi Deep Well No. 01. The Zone has been tested with 14.015 MMSCFD of gas and 125 BPD of condensate 36/34" choke size. The discovery of Hydrocarbon in Pasakhi Deep Well No 04 will add to the hydrocarbon reserves bas of Oil & Gas Development Company Limited.-PR

Copyright Business Recorder, 2014

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Shale gas policy formulated: E&P companies to get $13/mmbtu well-head gas price

The Ministry of Petroleum and Natural Resources has formulated the first-ever ''Shale Gas Policy'', which would be forwarded to the Economic Co-ordination Committee of the Cabinet for final approval, officials said. A senior Petroleum Ministry official told Business Recorder on Thursday according to shale gas policy, the Exploration and Production (E&P) companies will get $13 per mmbtu as well-head gas price, which is almost double the price of E&P companies getting through conventional gas produce. "We are confident that in the next meeting of the ECC the first-ever shale gas policy would be approved and subsequent to its approval, the ministry will allow E&P companies to start exploration activities," the official added. According to US Energy Information Administration (EIA), total shale gas reserves in Pakistan stand at 586 Trillion Cubic Feet (TCF), whereas shale oil reservoirs over 9 billion barrels. The EIA has estimated recoverable shale gas reserves of 105 TCF and over 9 billion barrels of oil in Pakistan. These estimates of recoverable hydrocarbon reserves are many a time higher than so far proven reserves of 24 TCF gas and about 300 million barrels oil. Pakistan currently produces a little over 4 Billion Cubic Feet per Day (BCFD) of gas and about 100,000 barrels of crude oil per day. The official said the extraction of shale gas/oil is four times costlier and technology extensive as compared to conventional natural resources. He said the shale gas had seen tremendous developments in the US and a couple of other countries were trying to use the latest technology. Pakistan, he said, was also encouraging exploration and production companies to venture into shale gas. He said in next ECC meeting, the ministry is going to forward a total 16 different summaries for approval, which include deregulation of Liquefied Petroleum Gas (LPG) prices and fixation of Oil Marketing Companies (OMCs) and petroleum dealers'' margins. The ministry is also to forward a summary regarding the construction of a Liquefied Natural Gas (LNG) terminal at Gwadar Port with a capacity to handle up to 1 BCFD commodity and a summary regarding the fixation of dealers margin "We are also sending a summary regarding the allocation and tariff of imported LNG to different segments of economy," the official added. The ministry will forward a summary of the allocation and use of flare gas to different sectors, another summary is regarding policy guidelines to Oil and Gas Regulatory Authority (Ogra). "The ministry has constituted a team to negotiate LNG prices with different potential commodity suppliers, including Qatar and we are also seeking the approval of LNG. Pakistan in first phase is all set to import up to 400 mmcfd of LNG on fast track basis," he maintained. "Pakistan is world''s top CNG consuming country, where an estimated four million vehicles are running on CNG, while the CNG outlets for past 6 years are facing serious gas shortage as a result of national energy crisis to keep the CNG business intact we have decided to allow CNG sector to import LNG for their outlets and for this purpose a summary is being moved to the ECC," the official added.

Copyright Business Recorder, 2014

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LNG import scheduled for March 2015, National Assembly told

The government on Wednesday informed the National Assembly that LNG import is scheduled for March 2015 but efforts are under way to materialise the project by the end of current year. Minister for Petroleum and Natural Resources, Shahid Khaqan Abbasi stated during question hour that work on the country's first LNG terminal would be completed by December 2014 and LNG import is originally scheduled for March 2015. However, he added that the government is making efforts to materialise the plan by the end of current year. The minister said import will be done through a transparent process and LNG would be used for power generation to overcome the power crisis. In a written reply to a question, he added that at present Pakistan is negotiating with Qatar only for procurement of Liquefied Natural Gas (LNG). However, for the import of regasified Liquefied Natural Gas (RLNG), negotiations are also under way with M/s Gail, India. Since Pakistan is facing acute shortage of natural gas, injection of RLNG in the gas network will play an important role in minimising the gas shortfall. He said the government is also working on alternative schemes to get gas from Iran, which includes establishment of an LNG terminal at Gwadar, to be connected with the Iranian border for import of gas. On Turkmenistan-Afghanistan-Pakistan-India gas pipeline project, he stated that the operating agreement has already been signed by the concerned countries. He said progress on this project is expected in November 2014 after a meeting of the Asian Development Bank, the main financer of the project. About IP gas pipeline, he said that China has indicated to join the IP project at any stage and added that international sanctions on Iran are major reasons for the delay in implementing the project. The minister added that expert groups of both the countries are scheduled to meet this month to workout implementation plan for the project. The petroleum minister added that under the bilateral Gas Sale and Purchase Agreement (GSPA), Pakistan segment of IP gas pipeline Project is to be completed by December 31, 2014 to start taking the contractual gas volume by January 1, 2015. He stated that under GSPA, both sides have also agreed on "take or pay" ie, if Pakistan does not take the contractual volumes of the gas from January 2015, the country would still have to pay the amount of the gas not taken. About ban on gas connections to new housing colonies, Abbasi said the ban was imposed in 2011 due to anticipated gas shortage. The ministry has moved a summary to get approval for giving new connections, he added.

Copyright Business Recorder, 2014

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Net oil, gas production up by seven percent: OGDCL to start exploration activities in 17 new blocks

The Oil and Gas Development Company (OGDCL) will start exploration activities in 17 new blocks this year. Chairman, OGDCL Board of Directors, Zahid Muzaffar along with Managing Director OGDCL Mohammad Rafi, while announcing annual financial results of the company at a press conference here on Tuesday, said OGDCL's net oil/gas production during past financial year 2013-14 had increased by seven percent, while the overall increase in oil/gas production was 15 percent of which eight percent was depleted. He added that OGDCL's BoDs, in its meeting on August 5, approved the financial results of the company for the year ending June 30. During the financial year 2013-14, OGDCL continued to deliver robust financial results coupled with steady operational performance, while successfully maintaining its position as the leading player in Exploration and Production (E&P) in terms of oil & gas reserves in the country. OGDCL recorded improvement in its production volumes, reaching average daily net crude oil and gas production of 41,330 barrels per day and 1.17 Billion Cubic Feet per Day (BCFD) as against 40,101 barrels per day and 1.1 BCFD respectively in the previous year. Moreover, average daily production of LPG also increased by 25 M Tons. OGDCL's net sales revenue increased by 15.1 percent to Rs 257.014 billion compared to Rs 223.365 billion last year. Company's net profit after taxation increased by 35.8 percent reaching a new record level of Rs 123.915 billion against Rs 91.273 billion in the preceding year translating into earnings per share of Rs 28.81. The BoDs declared final cash dividend of Rs 3.0 per share (30 percent) totalling to Rs 9.25 per share (92.5 percent) for the year ending June 30, 2014 against Rs 8.25 per share (82.5 percent) during last year. OGDCL was also successful on the exploration front where it realised two new finds of hydrocarbon namely Saand-1 in District Tando Allah Yar concession and Maru East-1 in District Ghotki, both in Sindh Province. The improved results indicate sustainable business growth and financial strength to undertake future exploration and development programmes leading to increased shareholders returns in the future.

Copyright Business Recorder, 2014

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Ahsan briefs German Ambassador about energy projects

Federal Minister for Planning, Development and Reform Professor Ahsan Iqbal met German Ambassador to Pakistan Dr Cyril Nunn here on Tuesday to discuss bilateral ties of Pakistan and Germany. The Ambassador appreciated the economic initiatives undertaken by Government of Pakistan and called for strengthening the ties between two countries. The Ambassador informed the Minister about upcoming events in Germany for promotion of economic co-operation between two countries and discussed areas for future co-operation. Ahsan Iqbal said, "Pakistan Vision 2025 will be launched on 11 August, 2014 by the Prime Minister and will be a roadmap for national revival." The Minister outlined the priorities of government and explained the high priority accorded to energy sector of Pakistan as energy loss is hampering growth of Pakistan's economy. "Government has given highest priority to energy sector for coming two years," he said. He said that the government is working on one hand to end the electricity crisis and on the other is adopting cheaper means of energy to control high cost of generation and for that several new coal-based power plants are being installed on a fast-track basis, which would take three years to complete and by 2017 'we will have significantly increased the electricity generation capacity of Pakistan.' He further said that government has expedited work on on-going energy projects and is also focusing on energy efficiency, demand management and distribution system up-gradation. "In partnership with the provincial governments, federal government is launching an awareness campaign to help improve energy efficiency and manage the electricity demand," he added. He said, "We hope 2,000 megawatt of power will be available within a year with the completion of these ongoing projects. We are also expecting a saving of 1000 megawatt by introducing demand management measures." Talking about the physical infrastructure, the Minister highlighted that the government has taken several initiatives to improve the physical infrastructure of the country which will create jobs as well as improve delivery and transportation of goods and services. He said, "Karachi-Lahore Motorway (KLM) is a mega project which will improve the road network of Pakistan." The Minister also talked about the steps taken to modernise the railway system which will help in coal transportation for coal-based power plants. The Minister said that Pakistan Vision 2025 will put Pakistan on a fast-track of growth and make it one of the fastest emerging markets of world. The focus of Pakistan Vision 2025 is to create a strong economy for stable and strong Pakistan.-PR

Copyright Business Recorder, 2014

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Significant gas reserve discovered in Gambat

Pakistan Petroleum Limited (PPL) has made a significant natural gas discovery in Gambat Block located in Sindh. The gas field will produce 30 Million Cubic Feet per Day (MMCFD). Official sources in the Ministry of Petroleum and Natural Resources told Business Recorder here on Monday that this year the ministry has added over 400 MMCFD of natural gas to the system, but this addition is not sufficient to meet the local demand. As per officials, the country''s local gas production stands at around 4.2 Billion Cubic Feet per Day (BCFD) against total managed demand of 6 BCFD. To meet the increasing demand the government has initiated the import of Liquefied Natural Gas (LNG) from Qatar for which a LNG terminal is under construction at Port Qasim in Karachi which would be completed by the end of April 2015. The ministry officials told Business Recorder on Tuesday that apart from this 100 MMCFD of gas and 4,000 barrels of crude oil, the country''s oil/gas production from other fields also increased by nearly 300 MMCFD and crude oil production within last 12 months rose from 73,000 barrels per day to 102,000 barrels per day. On June 6, 2014, Mari Petroleum Company Limited (MPCL), the operator of Ghauri block situated in District Jehlum, Punjab discovered a significant crude oil reserve with estimated production of 5,500 barrels per day. The Ministry of Petroleum and Natural Resources has added 113 Million Cubic Feet per Day (MMCFD) of additional gas and 4,000 barrels of crude oil to the system produced by 21 smaller oil/gas fields from June 2013 to May 2014. According to official data of the Petroleum Ministry, the oil/gas exploration and production companies working in the upstream sector during past 14 months drilled 78 oil/gas wells and announced 21 new discoveries, which have started producing 113 MMCFD of gas and 4,000 barrels of crude oil per day. The PPL operates six producing fields across the country at Sui (Pakistan''s largest gas field), Adhi, Kandhkot, Chachar, Mazarani and Hala and holds a working interest in fifteen partner-operated producing fields, including Qadirpur the country''s second largest gas field. As a major stakeholder in securing a safe energy future, the PPL pursues an aggressive exploration agenda aimed at enhancing hydrocarbon recovery.

Copyright Business Recorder, 2014

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Govt set to allow CNG sector to import 600mmcfd LNG

ISLAMABAD: In a major positive development, the government is all set to allow the Rs400 billion CNG sector to import 600mmcfd LNG in phases through private arrangement besides allocating 200mmcfd pipeline capacity for the sector in the first phase and 400mmcfd in the second phase. “We are going to table the summary in the next ECC meeting that is most likely to be held on August 8 seeking approval for the pipeline capacity to transport re-gasified LNG to be imported by the CNG sector,” a senior official of the Ministry of Petroleum and Natural Resources told The News. “Once this project gets materialised, the gas will be available at the CNG stations for seven days a week round the clock.” This means the CNG sector in Pakistan will emerge as the biggest LNG importer in the years to come.The CNG sector, the government official said, was hopeful of importing the LNG by March 31, 2015 replacing the local CNG. And the local gas being used by the CNG sector will be surrendered to the government that will use it either for the industrial sector or for power generation. If the government opts to use the local gas, abandoned by the CNG sector, for power generation, then it would immediately be in a position to generate 1,600MW electricity. The official said the LNG price would be de-regulated and sold in liters and not in kilograms. The government or Ogra will have no role in fixing the price. The CNG sector will regulate the price on its own and maintain it at 25-30 percent parity with petrol. The official said the CNG sector was going to ink a deal with Engro LNG terminal to import 200mmcfd LNG and 400mmcfd through other terminals being installed by other players under private arrangements. “The Engro LNG terminal has the capacity to handle the import of 690mmcfd gas. However, the dependable capacity of Engro terminal exists at 600mmcfd gas, out of which the government wants to import 400mmcfd LNG while the remaining 200mmcfd will be imported by the CNG sector.” The official said in a bid to bail out the government from the energy crisis, the CNG sector had carved out a plan to import 600mmcfd LNG in phases through foreign suppliers under the LNG policy 2011. A confidential letter written by the All Pakistan CNG Association to Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi, a copy of which is exclusively available with The News, unveils the plan to import LNG serving the CNG sector. Under the plan, this sector has made a Special Purpose Vehicle (SPV) with the name of Universal Gas Distribution Company Private Limited (UGDC). The UGDC will handle all the commercial agreements with gas utilities like the Sui Southern and Sui Northern and LNG suppliers and LNG terminal operators to secure a long-term agreement for LNG supply arrangements. The UGDC will further be responsible for the entire project management and to handle the LNG distribution system thereby sparing the pipeline capacity in future for use by the gas utility companies. The letter says the UGDC will need to get the gas marketing and distribution license from Ogra and a price deregulation policy. The plan mentions that the Punjab CNG stations will require 150mmcfd gas during the first phase against the bulk sale gas agreement to be inked between the UGDC and Sui Northern for an interim period of 18-20 months starting from the grant of distribution license to the UGDC till the projected supply through imported LNG is successfully commissioned. Under the second phase, the CNG industry will import 200mmcfd LNG from the suppliers and distribute it to the CNG stations through the network of gas utility companies for 18-24 months until such time that the LNG terminal becomes operational. The initial imported volume of 200mmcfdg gas will gradually be enhanced to 400mmcfd or as per requirements of the CNG market in the whole country. In the third and the final phase, after three or three and a half years, the UGDC will continue to import LNG off hook itself from the Sui utility companies’ pipeline network. The UGDC will build its own storage and distribution network of supply.

Copyright The News, 2014

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