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News Headlines for the month of
OCTOBER 2014

GE expands global wind presence with first order in Pakistan

Executing on growing the presence of renewable energy around the world, GE recently announced that it will supply equipment and procurement contractor HydroChina and wind farm customer Sapphire with 33 GE 1.5-82.5 wind turbines for the Sapphire Wind Power farm in Sindh. GE will also provide 10 years of operations and maintenance services as part of the contract. The 33 wind turbines will comprise the first GE powered wind farm in Pakistan and will be constructed in the Gharo-Keti Bandar Wind Corridor. The wind farm has the capacity to generate 50 MW of electricity, helping Pakistan meet the five percent goal it has set for percentage of electricity generation from renewable sources by 2030. Though this is GE's first wind energy project with Sapphire and HydroChina, Sapphire has selected GE power generation equipment for more than 18 years-choosing GE's Jenbacher engines and gas turbines for projects located in the region. "We chose GE wind turbines because they are a well-proven technology and widely installed around the world, especially in tropical climates like that of Pakistan," said Nadeem Abdullah, owner of the Sapphire Wind Power farm. "GE has been instrumental in supporting Sapphire to achieve financial closure with OPIC." Globally, GE has over 37 GW of installed wind turbine capacity, operating at over 98 percent availability.-PR

Copyright Business Recorder, 2014

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'Punjab government taking solid steps to overcome energy crisis'

A spokesman for Provincial Energy Department has said that Punjab government is taking a number of solid and effective steps for overcoming energy crisis and increasing the production of electricity. He said that Quaid-i-Azam Solar Park is being set up at Bahawalpur for the promotion of investment in renewable solar energy projects. LOI has been issued to the Chinese company for the feasibility study of 900MW solar energy project in Bahawalpur. The spokesman claimed that the company has great expertise in the production of solar energy and an excellent record and has fulfilled all the requirements for getting Bahawalpur project. He said that like other projects, rules and regulations and policies are being strictly implemented in Bahawalpur Solar Power Project. He further said that the company which has acquired licence intends to work as autonomous production institution of energy in solar energy sector in Pakistan.

Copyright Business Recorder, 2014

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Ministries told: 2,500 megawatts must be added to system by February: Nawaz

Prime Minister Nawaz Sharif Friday directed Ministries of Petroleum & Natural Resources, Water & Power and Finance Division to ensure that an additional electricity of 2,400-2,500 MW comes to the system by February 2015, both in the case of LNG and new on-site generation. Nawaz was informed that the first consignment of Liquefied Natural Gas (LNG) import would reach Pakistan by February 2015; and it would be made available to the power sector. The Prime Minister was chairing a joint ministerial meeting of the energy sector here. The meeting was attended by Federal Ministers for Water and Power, Khawaja Mohammad Asif; Interior, Chaudhry Nisar Ali Khan; Information and Broadcasting, Senator Pervaiz Rashid; Planning, Development and Reforms, Ahsan Iqbal; Petroleum and Natural Resources, Shahid Khaqan Abbasi and Railways, Khawaja Saad Rafique. The Prime Minister gave approval to making the consignment available to Kot Addu Power Plant which will produce 1,200 MW, as well as four other private power plants - Orient, Saif, Sapphire and Halmore - collectively producing 800 MW of electricity. The consignment will also be provided to Jamshoro power plant for producing 400-500 MW of electricity. Work on projects, including Fast Track LNG Terminal, SSGC LNG Terminal, Gwadar Nawabshah LNG Terminal & Pipeline, Private LNG Terminals, GEI, PGPL and Bahria to import 2BCFD LNG, enough to generate up to 15,000 MW, will be expedited. The Prime Minister was also informed that there are opportunities for producing affordable power from mobile mounted on-site power plants through 26 gas fields in the country having a potential of 1000 MW. The Prime Minister also directed relevant agencies to implement the already provided tax relief in the LNG policy. He said line losses and theft of electricity should be controlled at all costs and serious steps be taken against theft of gas, irrespective of official status of the persons involved. The Prime Minister directed the Ministry of Water and Power to ensure that in future, if bills are issued without meter-reading, it will be specified on the bill that this is a ''presumptive bill'', and any excess amount charged will be adjusted when the meter is read; the meter will be read at least once every three months. The Prime Minister said the demand of the people to have affordable electricity is justified and also a promise of the PML-N government, vowing to regularly chair meetings of relevant ministries for a better co-ordination and to achieve the desired results within the stipulated timeframe. He said all those working in relevant departments have to work 24/7. He said any lapse will not go unpunished and any good work they do will not go unrewarded.-PR

Copyright Business Recorder, 2014

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French company shows interest in setting up 100 megawatts solar project

A French company, Sun Power Corporation, has expressed interest in setting up a 100 megawatts solar project in Quaid-e-Azam Solar Park. In this connection, a delegation of prominent French company Total and Sun Power Corporation met Punjab Chief Minister Muhammad Shahbaz Sharif here on Thursday, disclosed an official. Member National Assembly Makhdoom Khusro Bakhtiar, Member Provincial Assembly Makhdoom Hashim Bakht, Quaid-e-Azam CEO Solar Park, Punjab Investment Board CEO and concerned officers were also present. The French delegation was comprised by Louis Caillard, Ms Yasmine Wattebled, Laurent Longuet and Saad Khan. During the meeting, Total CEO Marc Soissong said that his company is deeply interested in establishing a 100 megawatts project at Quaid-e-Azam Solar Park and it will be completed on fast track basis in accordance with the vision of the Chief Minister. Talking to the delegation, the Chief Minister said the Punjab government is taking all possible measures for resolving energy crisis being faced by the country. He said that the shortage of electricity has badly affected education, health, agriculture and other sectors. "Solution of energy problem at the earliest is essential for rapid development of the country and promotion of economic and trade activities, therefore, the government is making serious efforts in this regard," he added. He said the Punjab government is setting up Quaid-e-Azam Solar Park over a vast area of 1000 acres in Bahawalpur district of south Punjab and is establishing a 100 megawatts solar project with its own resources, which is in the final stages of completion. He welcomed the interest shown by the French company in setting up a 100 megawatts solar power project. "Speed and transparency in implementation of development projects is the hallmark of Punjab government," he added. He assured the delegation that all necessary facilities will be provided to the French companies.

Copyright Business Recorder, 2014

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Power projects: Dar leaves for China to ease concerns

Finance Minister Ishaq Dar on Wednesday left for Beijing to attend the Memorandum of Understand-ing (MoU) signing ceremony of Asian Infrastructure Investment Bank, (AIIB) as well as to alleviate the concerns of Chinese with respect to power projects. The minister will sign the document for Pakistan as founding member. The ceremony is scheduled to be held on October 24 at Beijing. A statement issued by Finance Ministry said that during his stay, the minister will also hold meetings with senior Chinese officials, heads of financial institutions and banks to firm up prospective Chinese investment/funding in the CPEC projects, especially energy sector. The minister will also meet the Pakistani community besides having a detailed interaction with Chinese media during his stay. An official said that the Finance Minister is accompanied by Additional Secretary/Special Assistant to Finance Minister Shahid Mehmood would also hold negotiations with Chinese authorities to ally their concerns with respect to special treatment to their power projects. Sources in the Finance said that Pakistani side would explain to them about investment in the power sector under the current power policy that provides an adequate guarantee for domestic and foreign investors on the basis of a level playing field. A meeting of the Committee of China-Pakistan Economic Corridor power projects was also chaired by Finance Minister on October 17 to discuss the Beijing demand of special treatment for their power projects. A participant of the meeting said that the committee expressed a concern about special treatment or safeguards to Chinese power projects, the current players in the power sector may also seek similar treatment. Finance Minister was of the view that the energy needs of the country was one of the top priorities of the present government and country’s economic policies safeguard the investment of foreign companies. He further stated that the government would continue to follow investor-friendly policies and the energy projects are the prime feature of the Pak-China Corridor and would be facilitated in every possible manner. The meeting of the committee was attended by Federal Minister for Science and Technology, Zahid Hamid, Chairman Privatization Commission, Muhammad Zubair, Secretary Finance, Dr Waqar Masood, Secretary Law, Barrister Zafarullah Khan and other senior officials.

Copyright Business Recorder, 2014

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Country can produce 150,000 megawatts power from wind energy: PCJCCI chief

Pak-China Joint Chamber of Commerce and Industry (PCJCCI) President Shah Faisal Afridi said on Tuesday that Pakistan has the potential of producing approximately 150,000MW power from wind energy sources. While commenting on a recent report compiled by United States Agency for International Development (USAID), which adds that the wind projects can fetch investment of around two billion dollars, he urged the government to opt for the short-term and quick start up of energy projects to curb the prevailing energy crisis that had crippled down the national economy in general and the industrial sector in particular. PCJCCI president said that the government has planned to achieve up to 2,500MW from wind energy by the end of 2015 and from renewable energy resources including 1000MW from solar, 50,000MW from hydro (large), 3,100MW from hydro (small) and 500 MW from waste. But, he expressed deep apprehension over the government decision to opt for the long-term energy projects. "The shortfall is causing a serious setback to the industrial sector and the industrialisation process, as well", he said. He further said that the energy mix in Pakistan is quite imbalance in comparison to other countries, with greater reliance on non-renewable resources of gas (43.7 percent) and oil (29 percent majority of which is imported), therefore; a rational energy mix planning ought to be developed giving greater dependency to renewable (hydel power), indigenous (coal) and wind energy resources. Afridi said that wind turbines projects are relatively fast to install, however, dams and nuclear plants take five to six years to complete and thermal power plants need two years at least, whereas, the wind power plants can be installed in shortest period of 12 to 18 months and the major cost is just the price of land. Knowing the growing energy requirement of the country, and depleting energy resource within the country, the Government of Pakistan deems to diversify its energy mix so that dependency over imported fuel may be reduced and some percentages of power requirement may be met through indigenously available energy technologies. Current government plans to achieve up to 2,500MW from wind energy by the end of 2015 because wind energy is sustainable, clean, safe, and economically competitive, he maintained.

Copyright Business Recorder, 2014

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KP chief minister guarantees security to foreign investors

KP Chief Minister Pervez Khattak has said the provincial government beside provision of all facilities would also guarantee security of the foreign investors interested in making investment in the energy sector of the province. Talking to the Ambassador of Germany, Dr Cyrill Nunn, who called on here in CM Secretariat, the chief minister, said that wrong impression of security situation is being presented to the world which is totally different from the actual. Those present on the occasion were included Peshawar German Consul General, Additional Chief Secretary, Khalid Pervez, Principal Secretary to CM, Mohammad Ashfaq Khan and chairman, CM's Complaints Cell, Haji Dilroz Khan. During the meeting they discussed matters of bilateral interests. The chief minister said that energy is their basic requirement, adding Khyber Pakhtunkhwa is huge resources of the potential of energy. He said that for the arrest of the energy crisis, the provincial government wanted the utilisation of all hydel, gas and oil reserves of the province. In this connection, he said they also offer investment opportunity to international community and would also welcome their technical assistance. Speaking on the occasion, German Ambassador, Dr Cyrill Nunn appreciated the reformative agenda of the provincial government for bringing transparency in the official matters and solid steps against corruption.

Copyright Business Recorder, 2014

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SRSP constructs 75KW power station in Kalash valley

Sarhad Rural Support Programme (SRSP) constructed 75KW power station at Sheikhanda village of the Ramboor area of Kalash valley, district Chitral. Chief Executive Officer (CEO) SRSP, Prince Masood-ul-Mulk as chief guest on the occasion while former Nasim, Union Council, Ayun, Abdul Majeed Qureshi presided over the ceremony. On this occasion, residents of the valley highlighted their problems and said that the area is lacking basic facilities even in the present modern era. They also pinpointed the lack of girls' school and dilapidated conditions of the hospital. They thanked SRSP for the construction of the power station to bring light into the lives of the people. The area was still lacking the electricity of the Peshawar Electricity Supply Company (PESCO). Addressing the inaugural ceremony, CEO SRSP, Prince Masood-ul-Mulk said that the power station has been established with the financial assistance of the European Union (EU) funded Programme for Economic Advancement and Community Empowerment. The scheme has cost an amount of Rs 15 million and benefit 260 families, which certainly bring revolution in their lives.

Copyright Business Recorder, 2014

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KP energy sector: Saudi-American consortium to invest $2 billion

Saudi American Consortium has shown its interest to invest up to $2 billion in the development of energy sector projects in Khyber Pakhtunkhwa to utilise the natural resources of the province in order to generate cheap electricity and control the energy crisis in Pakistan. In this context, a simple documentary procedure will be proposed to start the various projects in hydel, solar and oil & gas sector on fast track basis. A group of investors of Saudi American Consortium leading by the Princeton Environmental Group's president Peter Tien visited the civil secretariat Peshawar on Thursday. Meanwhile, the Secretary Energy & Power Department, Sahibzada Saeed Ahmed gave a detailed presentation to the investor group about the available energy sector projects in Khyber Pakhtunkhwa. The presentation was also attended by CEO PEDO, Engr Bahadur Shah, CEO KPOGCL Engr Razi uddin, CPO E&P Syed Zainullah Shah and Chief Finance Officer Akbar Ayub. During the presentation, the same working investment group was informed about the available 15 hydropower projects whose feasibility studies have already been prepared and ready for construction. Group leader Peter Tien said that his group intended to invest up to 2 billion US dollars in the energy sector of KP but a simple procedure would be adopted in documentary procedure while starting the construction work in these projects. He expressed the hope that our group would produce cheap electricity through the available natural energy resources of the province. He stated that our working group will again visit Peshawar the next month to plan the commencement of construction works in energy projects.

Copyright Business Recorder, 2014

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New power projects: Machinery, other items worth $50 million to attract no customs duty

The government has decided to exempt machinery, equipment and other capital goods worth $50 million from customs duty for new power projects against valid contracts, official sources told Business Recorder. Giving details, sources said that the Finance Bill 2014 has introduced a new Fifth Schedule to the Customs Act, 1969 to replace Customs S.R.O. 575(1)/2006 dated 05-06-2006. This envisages import of plant, machinery and equipment (including energy-related projects) and their local manufacturing status linking with CGO-11/2007, with the objective to encourage the locally manufactured goods and also to save valuable foreign exchange. In the process of transferring the terms and conditions of the SRO 575(1)/2006 to the Fifth Schedule of Customs Act 1969, certain entries (mentioned in SRO 575(1)/2006, against Sr. Nos. 1, 2, 6, 15, 20, 28, 29, 31 and 35A), were not linked with CGO-11/2007 and were now subjected to determination of local manufacturing status. The provision relating to exemption on the "import of machinery, equipment and other capital goods as plant for setting up of a new industrial unit, against valid contract (s) or letter (s) of credit and having the total C&F value of such imports for the project US $50 million or above" also stands deleted, which, otherwise was providing exemption to the companies importing equipment for use in agriculture, telecom, solar, power/energy and renewable energy sectors etc. Consequently, importers and end users of different sectors and technologies such as agriculture, telecom, solar, power generation, etc have now become liable for higher duties and taxes in case their imported goods are covered under CGO-11/2007 or declared as manufactured locally by the Engineering Development Board (EDB). The sources said deletion of the entries and provision to the SRO has resulted in around seventy additional cases referred to EDB till date concerning solar equipment imports. EDB has been striving with limited resources to facilitate through adjudication considering different specifications, engineering standards, quality/testing procedures, useful life, etc. Several meetings of local manufacturers and importers were held for a fair/transparent and impartial decision and to balance the competent interests of both local manufacturers and importers. While importers contest the capacity of local manufacturers to produce the equipment, the process for determining the manufacturing status of the imported equipment was stretched beyond desired limit impacting timely execution of the project. Following key points have been noted while processing these cases: (i) large Engineering Procurement and Construction (EPC) projects involve performance guarantees, warranties and financing stakes which otherwise were void in case condition of part supply of local equipment was incorporated; (ii) local manufacturers on the other hand have certain grievances relating to the duty and tax regime applicable to the inputs as well as their finished products and lack of incentives to promote indigenous manufacturing; and (iii) considering the energy crisis, it was very likely that more import orders would be placed in the near future for setting up of projects related to alternative energy resources, power generation, telecom and other sectors, which in many cases were based on facilitation by the Provincial and Federal Governments to investors in such sectors. The EDB, in its summary to the Economic Co-ordination Committee (ECC) of the Cabinet submitted the following proposals to overcome the problem in short as well as in the long run: (i) the proviso "import of machinery" equipment and other capital goods as plant for setting up of a new industrial unit, against valid contract(s) or letter(s) of credit and having the total C&F value of such imports for the project $50 million or above" deleted in the Fifth Schedule to the Customs Act, 1969, may be restored to avail exemption from determination of local manufacturing status; and (ii) further, to facilitate local manufacturers and provide them a level playing field, a working committee may be formed by the Federal Board of Revenue with representation from Ministry of Commerce/National Tariff Commission, EDB, Board of Investment and local manufacturers of energy equipment to review whether appropriate incentives can be offered to manufacturers to address their grievances and enhance their competitiveness for increased local and export sales. The ECC discussed the issue in detail and decided that the condition of local manufacturing appearing in Part I of fifth Schedule to the Customs Act, 1969 and 6th Schedule of the Sales Tax Act, 1990 shall not apply on "import of machinery, equipment and other capital goods as plant for setting up of a new power unit, against valid contract (s) or letter (s) of credit and having the total C&F value of such imports for the project of US $50 million or above with the condition that it will be only for those power projects which were in IPP mode meant for supply of electricity to national grid. This has been decided in view of the fact that, due to energy shortage, development of power sector is the priority area. This measure is revenue neutral as any additional tax is a pass-on item that would increase the cost of subsidy. The ECC also decided to constitute a working committee headed by Ministry of Industries and Production with representatives from Federal Board of Revenue, Ministry of Commerce, National Tariff Commission, Engineering Development Board, Board of Investment and local manufacturers of energy equipment to review whether appropriate incentives can be offered to manufacturers to address their grievances and enhance their competitiveness for increased local and export sales.

Copyright Business Recorder, 2014

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Power projects: World Bank wishes to fast track funding: Houerou

Federal Minister for Finance Senator Mohammad Ishaq Dar met Vice President of World Bank's South Asian Region Philippe Houerou at the World Bank, Washington DC. Houerou said that World Bank wished to fast track funding of Dasu hydropower project and Tarbela power projects, said a message received here from Washington here on Monday. He also reiterated his resolve to supporting Pakistan government's reforms agenda, especially Pakistan's ongoing energy projects. The Finance Minister, while recalling the state of Pakistan's economy at the time when the present government took over, expressed his gratitude for World Bank's unwavering support for Pakistan's economic revival in the form of Country Strategy Partnership and support of government's priority area of four E's. Houerou congratulated the Finance Minister on the successful negotiation and signing of CASA-1000 Transit Pricing Agreement between Pakistan and Afghanistan. He termed the agreement historic and commended the resolve shown by Prime Minister Nawaz Sharif last year for its conclusion. Senator Dar acknowledged the World Bank's assistance for the conclusion of CASA-1000 Agreement. He said Prime Minister Nawaz Sharif was hoping to have close co-operation in political and economic spheres with the new government in Afghanistan. The CASA-1000 Agreement, he said, was a good start in this regards. Senator Dar extended special thanks to Houerou for great help the World Bank and the IMF provided on IDA-16 and said that Pakistan was now banking on IDA-17. Referring to the recent flash floods and Zarb-e-Azb, the Finance Minister said almost a million people were dislocated. The government, he said, was thinking to avail of the offer by some multilateral donors and friendly countries for their rehabilitation once UN sponsored Recovery Need Asseessment (RNA) was available. Houerou offered his condolence on the loss of thousands of lives and displacement of people due to the flash floods. He expressed his readiness to support in the rehabilitation and reconstruction phase. The Finance Minister said that the government had successfully undertaken tax reforms and the first batch of SROs had been eliminated. Dar briefed about the healthy trends in the economy of the country as a result of government policies, the revenue growth for example, he especially mentioned, had witnessed 16.4 percent growth rate during the last fiscal year and the government was eyeing for 20 percent growth this year despite all challenges. Dar referred to the useful meeting of President World Bank with the Prime Minister in New York last month and hoped that the issues of debt financing, tariff adjustments and fuel reductions would be resolved soon. Houerou commended the approach of government of Pakistan in addressing the issue of sit-ins through political dialogue. Senator Dar apprised the Vice President of the government's serious pursuit of reform agenda regardless of all odds and said that allocation of funds for public service and uplift of the poor had significantly been increased in the current financial year.

Copyright Associated Press of Pakistan, 2014

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Neelum-Jhelum project: first unit to be completed by December next year

The first unit of 969 megawatt Neelum-Jhelum Hydroelectric Project is expected to be completed by December next year as directed by Prime Minister Nawaz Sharif. According to official sources, sixty-five to seventy percent works on this important project has already been completed so far. The project would formally be commissioned in 2016. Once completed, the project would contribute about 5.15 billion units electricity to the national grid annually. Meanwhile, Economic Co-ordination Committee of the cabinet has approved seventeen billion rupees in sovereign guarantees for laying down a transmission line from Azad Kashmir to central Punjab for supplying the electricity.

Copyright Independent News Pakistan, 2014

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46 sites selected to set up solar energy projects in Punjab: Shahbaz

Punjab Chief Minister Muhammad Shahbaz Sharif averred on Sunday that there was a vast scope of electricity generation from the solar energy in Punjab and 46 sites have been selected for setting up small solar energy projects to minimise power shortage. He was presiding over a high-level meeting here which reviewed prospects of setting up solar energy projects in the province. German solar expert Dr Gerwin Greesman and Additional Chief Secretary Energy Jehanzeb Khan gave a briefing on small solar power projects. Addressing the meeting, the Chief Minister said that resolving of energy crisis was essential for eliminating poverty and unemployment as well as accelerating trade and economic activities. He said the government was taking all possible measures to deal with the issue of shortage of electricity. Shahbaz Sharif dilated that untimely protests and sit-ins have wasted a lot of precious time of the nation and there was no room for further delay. He said collective efforts were needed to remove darkness from the country and concerned departments and institutions will have to perform their duties in this regard with a renewed spirit. He said the energy crisis has badly affected education, health, agriculture and other social sectors. He said resolving of energy problem was of vital importance for promotion of industrialisation. The Chief Minister said the government-led by Prime Minister Muhammad Nawaz Sharif was making sincere efforts to deal with the energy crisis. He said there were vast opportunities of generation of electricity from the solar power and solar energy projects of 01 to 50 megawatts will play an important role in minimising shortage of electricity. He said concerned departments should spare no effort for speedy implementation of small solar projects. Shahbaz Sharif issued directions that immediate measures to be adopted for implementation of small solar projects and a team be formed for speedy and transparent execution of these projects. He disclosed the Punjab government was initially setting up a 100-megawatt solar project in Quaid-e-Azam Solar Park in Bahawalpur with its own resources and work was being carried out speedily over this project which will start producing electricity by the end of the current year. The Chief Minister said the Punjab government was also working on coal, hydel, biogas, biomass and other projects of power generation from alternative sources. He said that there was also a vast scope of production of electricity from biomass and speedy efforts were needed in this direction. He said the government was working round the clock for resolving the energy problem and overcoming other issues and the day was not far when the country will put on the path to progress and prosperity. Advisor Azmul Haq, Senior Member of Board of Revenue, Additional Chief Secretary Energy, Managing Director of NTDC, officers of MEPCO, FESCO, NEPRA, Quaid-e-Azam Solar Park, energy experts were present in the meeting.

Copyright Business Recorder, 2014

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US lauds Pak-Afghan transit price agreement

The United States welcomes the agreement announced on Saturday between Afghanistan and Pakistan over transit pricing for the Central Asia South Asia electricity transmission project (CASA-1000). This marks an important step in bilateral relations between Afghanistan and Pakistan, and one of the first foreign policy achievements of the new government of national unity in Kabul led by President Ashraf Ghani and Chief Executive Officer Abdullah Abdullah. When completed, CASA-1000 will enable the Kyrgyz Republic and Tajikistan to sell excess summer hydropower to fill supply gaps in Afghanistan and Pakistan. The project forms an essential element of a regional energy market that connects suppliers with customers as a means to promote economic growth. The transit price agreement represents a critical, final step towards completion of a power purchase agreement, and provides the momentum for remaining donors to commit to implementation of CASA-1000. The United States will continue to engage with the four CASA-1000 countries and our international partners to advance this project not only to link suppliers of clean, green hydropower with customers, but also to sustain our long-term commitment to stability, security and prosperity for Afghanistan, its neighbours and the broader region.-PR

Copyright Business Recorder, 2014

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Electricity from garbage: Sindh government to start 672 megawatts project

The Sindh government is starting a project to produce six hundred seventy-two megawatts electricity daily from two thousand tons garbage of Karachi city. An official of the Power Department told our Karachi correspondent that feasibility report of the project has been prepared and it will be completed within thirty months. The project is a joint venture of Sindh Government and US based Princeton Environment Group.

Copyright News Network International, 2014

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Buksh Energy granted first LoS for solar power project

Alternative Energy Development Board (AEDB) has granted the country's first Letter of Support (LoS) to Buksh Solar Pvt Ltd (BSPL) for its 10 Megawatts (MW) solar powered generation facility catering to Bahawalpur and Cholistan districts. Buksh Solar is a special purpose vehicle of Buksh Energy Pvt Ltd solely set up to facilitate the 10MW Solar IPP that would sell electricity to Multan Electric Power Company (Mepco). The proposed project will have an installed capacity of 10MW, of which the energy produced will be distributed to Mepco. The proposed power plant would use solar power as a fuel to generate electricity and will use state-of-the-art technology producing 16,731MW electricity per annum. In addition, BSPL has recently been awarded an unconditional acceptance of Upfront Tariff and Generation License approval from Nepra (National Power Regulatory Authority). The 10MW Solar IPP would be the first solar project in Pakistan demonstrated on a mega scale with a power purchase agreement with the Disco's. This project promises to demonstrate the immense solar potential the country has 2.32 Million MW and the utilisation of the same for large scale energy production. In addition to the 10MW Solar IPP Buksh Energy since its inception in 2009 has emerged as a leading Energy Management company in Pakistan working extensively on solar integration across diverse market segments. Asim Buksh, CEO Buksh Energy Pvt Ltd, said, "Average dependable electricity capacity in summers reaches upto 15,000MW. Pakistan is losing up to three percent of its GDP because of frequent power shortages hence IPPs have to collaborate with the government in order to bring the energy crisis under control. Pakistan is facing one of the worst electricity shortages of all times as the demand for electricity is increasing and the supply is decreasing. We are pleased to be the pioneers in achieving the first solar IPP of the country. We hope that our 10MW will help meet the energy crisis in Pakistan. We aim to cater to five percent of Pakistan energy needs with renewable energy resources. In this prospect our first endeavour being solar energy, wind energy and biomass/biogas."-PR

Copyright Business Recorder, 2014

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220 kV sub station at Chakdra: Rs 4.39 billion PC-1 approved by Ecnec

The Executive Committee of the National Economic Council (Ecnec) has approved Rs 4.397 billion PC-1 for setting up of 220 kV sub station at Chakdra. The meeting chaired by Finance Minister Ishaq Dar considered and approved Ministry of Water and Power proposal for establishing a 220 kV sub station at Chakdra with a total cost of Rs 4.397 billion, including Foreign Exchange Component (FEC) of Rs 1.916 billion. The project aims at meeting growing power demand of Dir, Malakand, Mardan, Swat and Dargai under the jurisdiction of Pesco. The meeting also discussed and approved Khyber Pakhtunkhawa government for integration of health services delivery with special focus on Maternal New-born and Child Health (MNCH), Lady Health Worker (LHW), Extended Programme on Immunisation (EPI) and Nutrition Programme (USAID and DFID-assisted). The project envisages integration of three vertical health programmes EPI, MNCH, Family Planning & PHC Programme (LHW Programme) and Nutrition Programme for provision of primary healthcare without duplication of resources. Federal government would keep on financing the LHW Programme till 30.6.2015 in accordance with the decision of the Council of Common Interests (CCI) taken on April 28, 2011. The meeting was informed that any additional demand of funds by the provincial governments would be examined by the Ministry of Planning, Development and Reforms. Matter of federal financing of LHW Programme beyond 2015, ie, up to 2017 would be discussed and decided in the next National Finance Commission (NFC) Award.

Copyright Business Recorder, 2014

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50 megawatts wind power project in Gharo: Sindh government gets $130 million Chinese investment

The Sindh government got another Chinese investment of $130 million for setting up 50MW Wind Power Project near Gharo city, said a press release issued here on Monday. Chief Minister Sindh Syed Qaim Ali Shah witnessed the sub-lease (land) signing ceremony between AEBD and Hydro Dawood China Wind Farm (50 Mw) at CM House Karachi. Consul General of China, officers of AEBD and Energy Department were also present. Shah while talking to the Consul General China and other participants of ceremony said that Sindh Province had great potential in the field of wind energy and added that so far potential of 50,000 MM of wind energy has been identified in the Jhampir Gharo wind corridor. He said that Sindh Government had developed a comprehensive energy policy to meet it growing energy needs through cheap and indigenous resources specially wind and coal resources which are largely available in the province. The Chief Minister Sindh said that support and active participation of Chinese investment to explore both these resources in the province was highly appreciable. He said that Pakistan China friendship had a glorious past as well as bright future and would continue to act as a stabilising force for the entire region. This project is executed by two private companies which include Hydro China and Dawood Power (Private) Limited under their joint venture. The financing of this project would be made by the Chinese state-owned bank, whereas the Sindh Government has allotted 1720 acres of land to the company after it obtained LOI for 50 MW Wind Power Project from Alternate Energy Development Board (AEDB), NOC on Initial Environment Examination (IEE) report from SEPA, generation license and, upfront tariff from NEPRA and Energy Purchase Agreement (EPA) with NTDC. The Financial close of this project is expected by the end of this year and the construction will start from January 2015. The total construction period would be 18 months and commercial operation of this project would be before June 30, 2016. This project was included as one of top priority project for Pak China Economic Corridor and to generate hundreds of jobs for local people.

Copyright News Network International, 2014

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‘OGDCL to focus on shale gas exploration’

KARACHI: The Oil and Gas Development Company Limited (OGDCL) has been focusing on exploration of shale gas in Pakistan and initiated a shale gas potential evaluation study in its existing exploration area. Mohammad Rafi, managing director of OGDCL, said the company has also dedicated three wells to assess the potential of this untapped energy. “Based on the results of the study and the outcome of the core assessment from these wells, the company would proceed in this direction,” Rafi said. OGDCL has planned 35 wells, including 19 exploratory wells in the current fiscal year, which would be spud across the country, while three of these 35 have been dedicated for shale gas potential assessment. Exploration companies had already found some traces of shale gas during the search for conventional gas, as 10 percent to 12 percent shale gas appears on the upper faces of conventional gas, Rafi said. OGDCL has earmarked Rs105 billion for the development expenditure, while Rs52 billion would be spent on wells in the current fiscal year. The company based on its aggressive exploration strategy coupled with the near-term completion of the development projects and a strong financial position is well positioned to deliver upstream growth and improved profit margins, he said. With the operational and technical expertise in hand, the company will continue to undertake new development activities and accept new challenges for adding reserves and optimising production, while keeping with the long held strategy of creating and maximising value for the shareholders. Pakistan has estimated shale gas reserves of 51 trillion cubic feet (TCF) as compared to the conventional gas reserves estimated at 58 TCF. The massive shale gas reserves in Pakistan have been estimated by the US Energy Information Administration (EIA).

Copyright The News, 2014

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Chinese firm to set up coal-fired power plants in Punjab

A delegation of China Machinery Engineering Corporation led by its Vice President Li Jingkai met Punjab Chief Minister Muhammad Shahbaz Sharif here on Sunday. Matters regarding setting up of coal-based power plants from the local coal at the Salt Range were discussed in the meeting. The Chinese company showed keen interest in the project and it was agreed to set up coal-based power plants to be operated with the local coal. Talking to the delegation, the Chief Minister said that there were vast reserves of coal in Punjab and the provincial government has made a plan to utilise the coal for the power sector. He welcomed the offer of Chinese company to set up coal-fired power plants in Punjab. He said that the project of coal-fired power plants will be implemented speedily and transparently while using modern methods of mining will also result in increase in coal production. He said that the site has been identified for the project of coal-fired power plants and facilities like water, infrastructure, and grid and transmission line were available near the proposed site. The Chief Minister said a comprehensive strategy has been evolved regarding the supply of local coal to power plants on priority basis. He said the Chinese company should devise a strategy for the implementation of the project with minimum time. He said that new job opportunities could also be created through the mining of coal. He said that China was a close friend of Pakistan and extended commendable co-operation for the development of different sectors. He said that collaboration of Chinese companies with the Punjab government will further strengthen the bonds of friendship. Vice President of China Machinery Engineering Corporation Li Jingkai said that the project of modern coal mining in Punjab and establishment of power generation projects will be completed speedily. He said his company has expertise in coal mining as well as energy sector and full co-operation will be extended to the Punjab government in coal mining.

Copyright Business Recorder, 2014

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''LNG import to begin after completion of terminals''

Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said that Liquefied Natural Gas (LNG) would start arriving Pakistan within three months after completion of terminals. While responding to the questions of the members of the National Assembly during the session, the Minister said that a mechanism is under consideration to ensure uninterrupted Compressed Natural Gas (CNG) supply to consumers. He said that under a proposal CNG dealers would be allowed to import LNG and supply it to consumers on regular basis. He expressed the hope that after completion of terminals, LNG based gas would start arriving Pakistan within three months. He said government is planning to import two billion cubic feet of LNG in four years. Answering to a written question, the Minister said that total recoverable oil and gas in Khyber Pakhtunkhwa as on June, 2014 are 126 million barrels of oil and 1334 billion cubic feet (Bcfd) of gas. Minister of State for Parliamentary Affairs, Sheikh Aftab Ahmed said all election petitions are expected to be disposed of by the end of the year. He said that al total of 403 election petitions were filed after the last general election of which 317 petitions have been disposed of by the election tribunals and 86 are still pending.

Copyright Business Recorder, 2014

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E&P companies dig up a record 102 wells in one year

The oil/gas Exploration and Production (E&P) companies working in upstream sector of the country have spudded 102 wells within one year, which is a record in country''s history, as out of them 50 wells are exploratory. Senior officials at the Ministry of Petroleum and Natural Resources told Business Recorder on Wednesday that Directorate General (DG) Petroleum Concession (PC), which regulates the oil/gas sector, has directed these companies to speed up work on the acquired blocks and complete it within stipulated time period, otherwise their licenses would be cancelled. Following the directions, the E&P companies have increased local gas production up to 400 Million Cubic Feet per Day (MMCFD) in last one year. During the period, local crude oil production has been increased by almost 25,000 barrels per day, which took the local crude oil production to record level of 100,000 barrels per day from 75,000 barrels per day a year ago. During the on-going year, Pakistan Petroleum Limited (PPL) has made four significant natural gas discoveries in Gambat Block in Sindh. The cumulative gas production from the four wells is expected to be 60 MMCFD, equivalent of approximately 7,400 barrels per day oil, valued in foreign exchange at $750,000 per day. While, Oil and Gas Development Company Limited (OGDCL) made a significant oil/gas discovery in district Attock, which would produce 12 MMCFD of natural gas and 200 barrels of crude oil per day. Mari Petroleum Company Limited (MPCL) has also drilled five wells over the period which resulted in increase of gas production by 61 MMCFD. The company has also made a significant crude oil discovery in District Jehlum, Punjab with estimated oil production of over 4,000 barrels per day. This year, the ministry has added over 400 MMCFD of natural gas into the system, but this addition is not sufficient to meet the local demand. As per officials, the country''s local gas production stands around 4.2 Billion Cubic Feet per Day (BCFD) against total managed demand of 6.5 BCFD and in order to meet the growing demand, the government has initiated import of Liquefied Natural Gas (LNG) from Qatar for which LNG terminal is under construction at Port Qasim in Karachi which would be completed by the end of April 2015. 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.

Copyright Business Recorder, 2014

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PPL announces fourth discovery in Gambat South

Pakistan Petroleum Limited (PPL), the operator of Gambat South Block, with 65 per cent working interest (WI) along with its joint venture partners Government Holdings (Private) Limited and Asia Resources Oil Limited with 25 per cent and 10 per cent WI, respectively, announced another gas-condensate discovery from exploratory well Kinza X-1 in District Sanghar, Sindh. This is the fourth discovery in the block after Wafiq, Shahdad and Sharf gas-condensate discoveries. Exploration well Kinza X-1 was spud on July 28, 2014 and reached the final depth of 3,695 meters on September 13, 2014. Based on wire line logs, potential hydrocarbon bearing zones were identified in the Massive Sand of Lower Goru Formation, which are under testing. Initial testing flowed 12 MMscfd gas along with condensate at 48/64" choke size, thereby confirming the presence of commercial quantities of natural gas and condensate at Kinza X-1. The expected output from the well will translate into approximately 2,100 barrels per day in oil equivalent and foreign exchange saving of USD 200,000 per day. However, the well is being flowed at different choke sizes to measure gas flow rates and the actual flow potential will be determined after completion of the test.-PR

Copyright Business Recorder, 2014

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Mari Petroleum set to launch international operations

Mari Petroleum Company Limited (MPCL) is set to launch international operations in collaboration with international oil & gas exploration companies, Lieutenant General Nadeem Ahmed (r), Managing Director MPCL said. Talking to Business Recorder on Tuesday, MD MPCL said the company within the past one year has increased local gas production by 61 Million Cubic Feet per Day (mmcfd) taking it from 584 mmcfd in 2013 to 645 mmcfd in 2014. He said MPCL is looking to work in Central Asian countries in collaboration with Hungarian oil/gas exploration/production company MOL and Malaysian Petronas on joint venture basis. He said MPCL has started Pakistan's first-ever commercial production of tight gas from Zarghun South Gas Field, adding that gas supply from Zarghun gas field is dedicated to Quetta. The Zarghun gas field will add up to 20 million cubic feet of gas per day into the system and it is the first-ever gas field from where gas production is dedicated to a certain city or area. He said the government in principle has agreed with the company for the replacement of existing Gas Sales Purchase Agreement (GSPA) based on cost plus formula. Currently, MPCL is getting $0.78 for producing one mmbtu of gas from Mari Gas Field while other companies are receiving up to $6 for similar production. "Our success ratio in 2013-14 was 100 percent as MPCL drilled five oil/gas wells and all were successful and as a result the company's oil/gas production significantly increased. A few months ago MPCL share prices were trading at around Rs 174 per share, which now is trading at Rs 560 per share. We discovered crude oil on Ghori Block. Crude oil production in Haleem Block district Karak has jumped from 550 barrels per day to 1,100 barrels per day," he added. The MD stated that the company is extensively working in the exploration of oil and gas sector and in 2012-13 contributed Rs 65 billion to the national kitty, which in 2013-14 reached Rs 76 billion mark. MPCL declared highest-ever dividend of 38.65 percent in 2013-14 against 37.84 percent in the 2012-13 and reached highest-ever share price of Rs 560. "Our crude oil/condensate production also touched new heights over the period as it went up to 199,000 barrels against 191,000 in 2012-13," he added. MD MPCL said in spite of financial constraints MPCL drilled 6 exploration/appraisal wells - the highest number of exploration/appraisal wells drilled by the company in a year. MPCL spent $40 million on exploration and development activities against an allocation of $32.5 for the year. He added that the company has commenced production on nine oil/gas wells adding that overall the company's efforts saved $3.2 billion foreign exchange for the country. "In Mari field we are sitting on the second largest oil and gas reservoirs of the country, but due to financial constraints we remain unable to undertake drilling of multiple wells at a time because federal government allocates us nearly $20 million for exploration purposes. With this amount only one oil/gas well can be drilled. On our regular request this year the federal government has increased allocation for exploration activities from $20 million per year to $37 million per year," Nadeem Ahmed added. The government in principle has decided to replace current Gas Sales Purchase Agreement (GSPA) which is based on cost plus formula with Mari Petroleum Company Limited (MPCL) in a bid to bring the company at par with other exploration and production companies operating in the upstream oil/gas sector of the country. He said the company has plans to increase spending on exploration and production activities from current $40 million per year to $120-$128 million per year during next few years. To speed up the exploration and development activities, MPCL recently purchased a modern rig costing $20 million from China and it will be used in exploring oil/gas in Karak area of Khyber Pakhtunkhawa. MPCL's success ratio is 1:1.4 which is high compared to other E&P companies with an average of 1:4; internationally the ratio is 1:8. About 78 percent of MPCL's gas production is dedicated to fertiliser plants and the company is playing a very critical role in the growth of the agriculture sector. MPCL is supplying 12 percent of its gas to power houses while the rest is being supplied to other sectors. MPCL is supplying gas at $0.78 Per Million British Thermal Unit (mmbtu) - lower than the price charged by other public sector and private E&P companies. Currently, MPCL is working in 17 oil/gas blocks of which 11 blocks are entirely being explored by MPCL while in other 6 blocks MPCL is a joint partner.

Copyright Business Recorder, 2014

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Chinese delegation meets Abbasi

A Chinese delegation led by Li Tong, Chief Executive Officer/Chairperson, Bank of China International called on Federal Minister for Petroleum & Natural Resources Shahid Khaqan Abbasi here on Tuesday. The delegation comprised the representatives of M/s China Tianrui Group, M/s. Metallurgical Corporation of China, M/s BOC International Holdings Limited, M/s GCL-Poly Energy Holdings Limited and M/s Shandong Hi-Speed Group Co is on a four day visit to Pakistan to look into the investment opportunities available in Pakistan. Federal Minister for Petroleum & Natural Resources Shahid Khaqan Abbasi briefed the delegation on the energy sector of Pakistan, its ongoing projects and the projects in the pipeline. He informed the delegation that the present government in Pakistan is committed to coping with the energy crisis, the country is currently facing. In this direction, the government has initiated a number of new projects in the energy sector, like, import of LNG, installation of re-gasification terminals and to laying down new pipelines for transportation of the fuel from the southern ports to the upcountry. He also appraised the delegation of the opportunities available in the oil and gas exploration and the establishment of oil refineries in Pakistan's coastal areas and benefits attached with it. The Chinese delegation appreciated Pakistan's investment friendly regime and took a keen interest to invest in the energy sector of Pakistan. The delegates expressed their resolve to capitalise from the investment opportunities offered by the government of Pakistan especially in the projects linked with the import of the LNG. The delegates also showed an interest in the mineral sector of Pakistan. The minister pledged to extend every possible assistance and co-operation to the Chinese companies and investors, willing to take up projects in Pakistan. Secretary Petroleum Abid Saeed, Additional Secretary, all DG of relevant sections and other senior officials also attended the meeting.-PR

Copyright Business Recorder, 2014

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Promotion Conference in Beijing: Pakistan sees more Chinese investment in oil, gas sector

'Pakistan Oil and Gas Promotion Conference' was held in Beijing on Friday to showcase the country's abundant hydrocarbon potential to Chinese investors. The event was jointly arranged by the China Overseas Investment Union and Pakistan's Embassy in Beijing, according to a message received from Pakistan Embassy in Beijing. Pakistan Ambassador to China Masood Khalid drew the attention of Chinese potential investors who had participated in a large number to the plentiful potential and opportunities on offer in exploration and production of huge reserves of coal, shale gas, minerals and oil in Pakistan. He said that oil and gas sector of Pakistan had developed considerably in recent years. There was a liberal investment regime for foreign investors. Equal treatment was given to local and foreign investors. Foreign equity was allowed upto 100 percent. Remittance of royalty, dividends, capital and profits was allowed and foreign investment was fully protected, he explained. The Ambassador said the success rate of oil and gas discovery in the Pakistan was encouraging, inviting the Chinese companies to explore and establish joint ventures with local petroleum companies. Many foreign companies had benefited from the enabling environment for the prospective investor, he pointed out. He also highlighted the ideal location of Pakistan for trans-regional trade and investment due to its unique geography, saying it provided the cheapest and most viable sea route from Western China to Central Asia, Middle East and Africa. Pakistan was therefore naturally positioned to serve as an Energy and Trade Corridor for China, he emphasised, adding the port of Gwadar was the node for transportation of goods and energy supply to and from China. He said the deep sea port once fully developed and operational could not only meet urgent energy needs of China but would do that in the most efficient way, adding that setting up of an oil terminal and a refinery was also on the cards in addition to establishing primary infrastructure in Gwadar. Executive Director of China Overseas Investment Union Zheng Shuai also spoke on the occasion saying that given the incentives, he was hopeful that more Chinese companies of oil and gas would venture into Pakistan's hydrocarbon sector.

Copyright Associated Press of Pakistan, 2014

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