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News Headlines for the month of
FEBRUARY 2015

Neelum Jhelum project: Pak-Kuwait Addl $32 million Loan Agreement signed

The Pak-Kuwait Additional Loan Agreement of US $32 million for Neelum Jhelum Hydropower Project was signed here on Thursday. Secretary EAD Saleem Sethi and Deputy DG Kuwait Fund for Arab Economic Development (KFED) Hamad Al-Omar signed the agreement on behalf of their respective governments. Minister for Finance Ishaq Dar and Kuwait Ambassador Nawaf Abdul Aziz Alenezi witnessed the ceremony. Kuwait, it may be added, has already been co-financing this project with an amount of 42 million dollars. The project has 969MW generation capacity, total cost of Rs 274 billion with a planned foreign funding of 1,585 million dollars. In this regard 1,110 million dollars have been committed by donors including IDB, Saudi Fund, Opec Fund, Kuwait Fund and China Exim Bank. Minister for Finance Ishaq Dar in his brief remarks welcomed signing of the agreement, saying it was another chapter added to Pak-Kuwait economic co-operation. On behalf of the Prime Minister, the Minister for Finance thanked the leadership and people of Kuwait for their continued support to Pakistan. Hamad Al-Omar on the occasion said he was pleased to sign the agreement and that Kuwait would keep extending support for development projects in Pakistan.-PR

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Dastgir says 10,400 megawatts to be added to national grid by 2017

Federal Minister for Commerce Engr. Khurram Dastgir said here on Wednesday that 10,400Megawatts of electricity would be added to the national grid by 2017. "The financial closure of various power projects is going to be made by the end of March, 2015 and 10,400MW of electricity will be inducted into national gird in the beginning of 2017," he added. The minister was talking to media persons during his visit to the office of Federation of Pakistan Chambers of Commerce and Industries (FPCCI). He said that the top-most priority of the government is to attract both foreign and local investment in the country by restoring peaceful environment and ensuring adequate energy supply. "The menace of terrorism from the country will be eradicated within two years as the whole nation is on the same page," the minister said, adding that the energy crisis will be reduced considerably with the import of Liquefied Natural Gas (LNG) by the end of next month. Talking about the 9th Expo Pakistan which will commence on February 26 at the Karachi Expo Centre, he said that around 1,000 traders and businessmen from 70 different countries have confirmed their participation in this mega event. He said that the four-day export-oriented fair will, on the one hand, help in enhancing image of the country and, on the other, contribute handsome revenue to the national exchequer, besides the event would also promote the sense of self-reliance among the local business community. Commenting on GSP Plus status, he said that the country's export to European Union (EU) from January-November 2014 had increased by $1.16 billion as compared to the same period during the previous financial year. Replying to a question about Indo-Pak trade relations, the minister said that both Pakistan and India will not be able to enjoy trade benefits as long as bilateral diplomatic ties between the two countries were not improved. He was, however, optimistic that Indian Foreign Secretary's forthcoming visit to Pakistan will help in resolving mutual trade issues. The FPCCI president, Muhammad Idrees and the Chief Executive Officer of Trade Development Authority of Pakistan (TDAP), S M Munir, were present on the occasion. Later, businessmen and traders highlighted their issues and put forth a number off suggestions at a meeting held between the minister and the FPCCI members. The FPCCI chief on this occasion demanded of the government to take private sector on board while making FTA/PTAs. He also urged the ministry of commerce to prepare feasibility report with regard to establishing warehouses and bonded carrier facilities for Central Asian Countries, besides dry ports should be set up along with border areas of Afghanistan, Iran and India. The FPCCI chief also demanded that `fake' associations should be banned, plants and machinery for export-oriented agro-based industry should be exempted from duty and knowledge-based economy should be promoted by organising seminars and workshops.

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$1 billion power plant Lucky shortlists Chinese, Korean EPC contractors

Lucky Electric Power Company Limited (LEPCL), a wholly-owned subsidiary of Lucky Cement, has short listed engineering, procurement and construction (EPC) contractors from China and Korea for the development of 660MW coal-based power plant at Port Qasim. The LEPCL, which got a long-awaited Letter of Intent (LoI) from the Private Power and Infrastructure Board on February 11, is also going to file a tariff petition as well as obtain a power generation license from Nepra by April. "Preliminary negotiations with short-listed EPC contractors from China and Republic of Korea are expected to start in parallel," said a notice Chairman Lucky Cement Muhammad Yunus Tabba issued to the company's shareholders at three stock exchanges of Pakistan as well as London Stock Exchange. Eyeing end-June as a deadline for the completion of talks with Chinese and Korean contractors, the LEPCL has already appointed technical consultant to conduct feasibility study for the "supercritical" project. The cost of power generation facility has been estimated at $1 billion or Rs 100 billion. Relying solely on local financing, the LEPCL has set the Debt to Equity Ratio for the project at 25/75 percent. While 25 percent of the total equity would be invested by Lucky Cement the balance would be made available through a banking consortium. "The EPC contractors have been mobilized at site for the preliminary works and financial close with the consortium of local banks for project financing has been achieved on February 9," said Lucky's chief eyeing May 2016 as a completion deadline for the project. Lucky Cement, a leading cement producer which posted a net profit of Rs 5.60 billion for 1HFY15, is venturing into the energy-scarce country's power sector. The cement giant is working on the establishment of two Waste Heat Recovery (WHR) plants at its captive plants located at Karachi and PEZU plants. Each of the facilities is envisaged to produce five megawatts of electricity. While the Karachi plant is expected to be commissioned by the end of this month, the one at Lucky's PEZU plant would have the plant and machinery installed by September. "Your company is currently in the process of tariff negotiation with Nepra for the supply of surplus electricity from PEZU power plant," the shareholders were informed. Lucky Cement also has its global cement manufacturing business flourishing with its investment joint ventures in DR Congo and Iraq performing well during the first half of current fiscal year. While the first drawdown for its cement plant in Congo is expected next month, the company's grinding mill in Iraq achieved production and sales volumes of 378,000 and 372,000 tons, respectively, during July-JanFY15. "The (grinding mill's) operations posted a net profit of $6.4 million," Tabba said. In Congo, the company has started receiving shipments from its European contractor, M/s FLSmidth, under the equipment supply contract. "Civil and mine development work at plant site is in progress." "Your company's strong financial position and free cash flow generating ability would help investing in the projects and avenues which would continue to bring in further efficiencies and increase shareholder value," Tabba gave his future outlook. The company cites a strong local demand, declining coal and fuel prices on international market and lower freight cost as major contributors to its growing profitability during the current financial year.

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Government seeks to import power from China

The federal cabinet has directed Ministry of Water and Power for initiating talks with China to import 3000MW of electricity, an official said Sources said that the issue of electricity import from China came under discussion during a briefing by Secretary Water and Power to Chinese authorities on his recent visit to Beijing. Water and Power Secretary said that Pakistan would be generating 3600 megawatt of electricity in collaboration with China. Additionally, China will export 3000 megawatt electricity to Pakistan, he added. The Prime Minister said that action would be taken against all those responsible for any delay in the energy projects, as the whole nation is suffering due to energy shortage. He directed that the proposed projects should be completed by February 2017. He emphasised that each day is crucial for the development of the country and we have to work on a fast-track basis to complete the energy projects. The Cabinet meeting chaired by Prime Minister Nawaz Sharif Monday also decided to approach political parties against reported use of money and influence in the Senate elections. The meeting decided that other political parties would be contacted, and if necessary, amendments in Constitution and laws to be completed before the Senate elections. The Prime Minister also constituted two committees to co-ordinate all necessary steps in consultation with other mainstream political parties and directed for immediate formation of a Committee comprising legal experts to deliberate on legal issues and submit its report and recommendations to the Prime Minister in the next twenty four hours. Earlier, the Federal Cabinet condoled the death of Justice Rana Bhagwandas and eulogised his services in different capacities and observed a one-minute silence as well. Chairman Capital Development Authority (CDA), in his presentation, gave a briefing to the Cabinet on the prospects of public-private-partnership for carrying out development work in the federal capital, as the authority does not have any sustainable source of income. He proposed that public-private-partnership may be allowed to overcome financial constraints being faced by CDA. The Prime Minister, while approving the proposal, in principle, directed CDA Chairman to go for necessary amendment in the CDA laws for approval by the Parliament. The Cabinet considered and approved initiation of negotiation for a Preferential Trade agreement (PTA) between Pakistan and Afghanistan, signing of a loan agreement for Energy Sector Reform Program between Pakistan and Japan/JICA, gave formal approval to the inter-government framework agreement signed between Pakistan and China for Government concessional loan to finance the Karachi Nuclear Power (K-2/K-3) Project. The Cabinet also approved signing of the reciprocal agreement and an MoU between the government of Pakistan and Iran. The Cabinet considered and gave approval, in principle, to start negotiations with the government of Qatar for holders of Diplomatic and Official Passports and to enter into negotiations on an "Agreement on Transfer of Offenders/Sentenced Persons" between Pakistan and Malaysia. The federal cabinet also gave approval to signing an MoU between Sultanate of Oman and Pakistan in the field of illicit trafficking of narcotic drugs & psychotropic substances. Federal Cabinet also gave ex-post facto approval to an MoU signed between the Ministry of Food & Agriculture Pakistan and Ministry of Agriculture of the Russian Federation, ex-post facto approval of the agreement signed between Nigeria and Pakistan for Co-operation in agriculture. The Cabinet gave approval, in principle, to start negotiations with South Africa for a memorandum of understanding on Co-operation in the application of plant quarantine and phytosanitary measures, and for initiating negotiations for Memorandum of Understanding with the Government of United Arab Emirates (UAE) in the field of manpower. The Cabinet considered a summary of the ministry of Petroleum and Natural resources and gave ex-post facto approval, in principle to start negotiations with Kuwait for signing an MoU. The Cabinet further gave approval to the signing of an MoU between Ministry of petroleum & Natural Resources and Kuwait Petroleum Corporation (KUFPEC), government of Kuwait and Award of Petroleum Rights to Kuwait Petroleum Corporation on Strategic Partner Basis through its subsidiary Kirthar Pakistan B.V. The Cabinet considered and gave its approval to the protocol minutes of the meeting with China National Petroleum Corporation regarding Gwadar Nawabshah LNG terminal and pipeline project. The Cabinet also gave ex-post facto approval to an agreement on China-Pakistan Economic Corridor Project cooperation between the Government of People''s Republic of China and the Government of Islamic Republic of Pakistan.

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Reon Energy initiates 1MWp solar power project at Wah Nobel

Reon Energy Solutions took a mega step in energy abundance with the groundbreaking of the 1MWp Solar Power Project at Wah Nobel Chemicals Ltd Reon Energy Solutions is a part of the Dawood Hercules Group-the largest private sector player in the energy sector. The 1MWp project demonstrates Reon's expertise in high scale solutions to meet industrial requirements and Wah Nobel Group's commitment of adopting innovative technologies. Reon has completed a host of successful projects countrywide with its solar and biogas energy solutions making a difference in numerous business fields such as telecom, health, education, agriculture and industry. "The growth in this sector is driven through partnerships," said Inam-ur-Rahman, CEO Reon Energy Solutions. "And our company is the most reliable long-term partner for renewable energy solutions in the country."-PR

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Wind energy projects: Buksh Energy joins hands with Danish company

Over the past six years Buksh Energy (Pvt) Ltd has been committed to maximising energy efficiency and ensuring the optimum utilisation of resources in its attempts to alleviate Pakistan's severe energy crisis. Global Wind Power (GWP) and Buksh Energy have joined hands to provide holistic turnkey solutions for managing and commissioning wind energy projects in Pakistan. The partnership aims at to facilitate the existing wind energy projects with the selection of an experienced EPC and project developer. This is the first ever collaboration of BEPL and GWP for supporting the wind energy sector of the country and will provide a strategic balance of services, utilising the two leading companies' respective strengths and resources to leverage the energy sector of Pakistan. Global Wind Power (GWP), Denmark, is a leading international project developer specialising in developing, implementing, selling and managing wind turbine projects for professional investments. The Ambassador of Denmark to Pakistan, Jesper Moller Sorensen said: "As part of our Danida Business facility, we invited Buksh Energy to Denmark in October to meet prospective partners in the energy sector. I am really excited that Buksh Energy and Global Wind Power found each other. It is exactly innovative partnerships like this that will help Pakistan to meet its energy demand in the future. Denmark is a global world leader in wind solutions, and that potential in Pakistan is enormous." GWP's senior business advisor Nicky Mads Larsen, is also very positive about the company's future with BEPL. He said, "The partnership between Buksh Energy and GWP aims at to combine the best of local and international know-how and experience for the benefit of the local industry, developers and investors. Although we have been in traditional project joint ventures before, our local partner agreement is a new and interesting form of collaboration for which we are very excited, and which allows us to explore markets that would otherwise be difficult to enter." Fiza Farhan, Director of Buksh Energy also shared her enthusiasm for the project, said, "Buksh Energy is extremely excited to bring turnkey wind energy solutions to Pakistan with this venture. I believe that our unique partnership will open new avenues for the renewable energy sector and encourage the development of the wind energy sector in the country." The CEO of BEPL, Asim Buksh said, "It is with great pride that we announce this partnership with GWP as our trusted project development and EPC partner. The partnership aims to fully facilitate the investors in setting up wind farms with a team of experts possessing the finest EPC and project management skill set. This move fits in with our vision 2020 to ensure that we are responsible for five percent of Pakistan's energy needs to be met by renewables."-PR

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Pak-Afghan JEC decisions: implementation status discussed

Finance Minister Ishaq Dar Friday chaired an inter-ministerial meeting on the implementation status of the decisions of the Pak-Afghanistan JEC meeting held on November 13, 2014. The minister was informed that among the most significant projects, there was speedy headway being made with regard to CASA-1000. Issues such as energy pricing, payment guarantees, etc, were finalised in working group meetings held in November-December 2014. The Ministry of Communication gave its input about Torkham-Jalalabad Additional Carriageway saying the ECNEC had approved its revised cost and it was processing request for release of funds. Representative of the Ministry of Railways briefed Dar about the Chaman-Spinboldak Rail Link project. The minister was informed that project activities would be initiated in tandem with the construction of Qandahar-Spinboldak section by Afghanistan. Representative of the Ministry of Port and Shipping informed the minister that the Afghan side had requested trade facilitation and sought storage space at ports in Pakistan. He said there was ample storage space available at Port Qasim and if more storage space was required, Port Qasim Authority would extend that on monthly rental basis. The minister was apprised facilities had been made available at ports for Afghan cargo and that requirement of scanning of Afghan transit cargo would be also being reduced. Dar appreciated scholarship scheme for Afghan students undertaken by the HEC. He was briefed that the HEC had arranged admission of 609 Afghan students including 524 in public sector universities and 85 in private universities. Approximately 400 students had joined already, the minister was further informed. Dar, while appreciating the progress so far achieved by various ministries said that fast track implementation on the decisions taken at the Pak-Afghan JEC was common desire of leadership of both the countries. He asked all the concerned ministries and departments to maintain active liaison among them and with their Afghan counterparts to ensure the decisions were implemented in letter and spirit.-PR

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Vestas ready to bring wind energy to Punjab

The Punjab government and an international company of Denmark signed an agreement of co-operation regarding projects of wind technology here on Thursday. On behalf of Punjab government, Additional Secretary Energy Department Khalid Awais Raja signed the agreement, while Vice President of the Danish company VESTAS Gerard Carew signed on behalf of Denmark. Punjab Chief Minister Muhammad Shahbaz Sharif and Ambassador of Denmark Jespar Moller Sorensen were present on the occasion. The Ambassador pointed out that a great deal of potential exists for generating over 1000 megawatts of electricity from wind in the north and south of Punjab. Wind technology potential in Punjab is greater than in Sindh area of Jampir. According to the agreement, four pilot projects pertaining to wind power would be developed by the Danish company for which Punjab government would provide all possible facilities. Each pilot project has the potential of generating up to 250 megawatt electricity. Development work at four potential locations for wind technology would expeditiously be completed on war-footing. Speaking on the occasion, CM Punjab said that Denmark is a great friend of Pakistan and has helped in locating various areas of Punjab for wind power projects to deal with energy crisis for which Punjab government was grateful to the government of Denmark and the Danish Ambassador. He said Denmark is a global leader in wind energy and meets a large percentage of energy needs of its own country through wind power. Punjab would vigorously benefit from the expertise and co-operation of Denmark in wind technology to deal with its energy crisis. He further said the Danish Ambassador took personal interest in promotion of wind energy in Punjab and thanked him for his deep interest in mapping locations in Punjab suitable for generating electricity through wind technology. He said these projects would be completed expeditiously and in a transparent manner with the co-operation of Denmark which will prove to be a milestone in overcoming the energy crisis in the province. The CM directed formulation of Punjab Wind Power Company and said that a Quaid-e-Azam Wind Power Park would be established on the pattern of Quaid-e-Azam Solar Park. Addressing on the ceremony the Danish Ambassador said that Denmark would provide all possible co-operation to Pakistan to deal with its energy crisis. He said installation of wind technology in Punjab would help a great deal in overcoming energy crisis in Pakistan. The process of locating appropriate places for wind technology has been completed in various areas of north and south Punjab with the help of latest technology, he added. Vice President of VESTAS Gerard Carew, reiterated that Denmark has great expertise in renewable energy and 40 percent of energy needs of Denmark are being met through wind technology. He congratulated CM Punjab on this important step and assured that Danish government would continue to provide maximum assistance to Punjab government in overcoming its energy crisis. Special Assistant to the Chief Minister Azmul Haq, Chief Secretary Punjab, Secretary Planning & Development, Chairman Punjab Power Development Company, CEO of Quaid-e-Azam Solar Park and officials of Danish international company VESTAS were also present on the occasion.

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Biomass energy project: Unido-Smeda jointly begin implementation

United Nations Industrial Development Organisation (Unido) in collaboration with Small and Medium Enterprises Development Authority (Smeda) has commenced implementation on a biomass energy project, which is aimed at promoting market based adoption of Biomass Gasification Technology (BGT) for power generation and thermal applications, Chief Executive Officer (CEO) of Smeda Muhammad Alamgir Chaudhry, said. "We cannot just rely on diesel Genset to meet our energy gaps, now the time has come when we should start adopting efficient, biomass gasification technologies which are very successful for Small and Medium Enterprises (SMEs)," he said. Smeda CEO assured to provide all the guidance, information and trainings to SMEs for biomass projects so that confidence of SMEs can be enhanced. In order to enlighten potential SMEs about the techno-commercial viability of the project and considering potential of Gujranwala based industries, the first awareness raising workshop was also held at Gujranwala Chamber of Commerce (GCCI), he said, adding, "the industrialists representing rice processing, wood based products, textiles, packaging and ceramics had shown deep interest for onward adoption of BGTs." Muhammad Alamgir Chaudhry lamented that the current energy crisis had adversely affected SMEs of Pakistan resulting into decreased productivity and increased unemployment. But, Pakistan being an agricultural country has enormous biomass resources which is a sustainable fuel for our future, he said, adding: "Biomass including rice husk, corn cob, wood chips, sawdust etc were being used successfully both for process heat and power generation by many economies of the world including Thailand, China, India and Cambodia." He appreciated services of Muhammad Ahmad, National Project Manager-UNIDO and Ashfaq Ahmad, DGM-Smeda for working hard to demonstrate technology by installation of pilot projects and to create awareness among stakeholders on BGTs.

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POF launches 1MW captive mode solar power project

The groundbreaking ceremony of 1 MW Captive Mode Solar Power Project at Wah Nobel Chemical Ltd was held at Pakistan Ordnance Factories here on Tuesday. Lieutenant General Muhammad Ahsan Mahmood, Chairman POF Board and Muhammad Sharif Ex-Member POF Board and Technical Advisor to Chairman laid the foundation stone of 1 MW Captive Mode Solar Power Project at Wah Nobel Chemical Ltd by unveiling the plaque on the site. Chief Executive Wah Nobel Syed Naseem Raza, Inam-ur-Rehman Chairman Reon Energy Solution and senior officers of POF attended the ceremony. Addressing on this occasion, Lieutenant General Muhammad Ahsan Mahmood, Chairman POF Board remarked that this Solar Power Project is a landmark event in the realm of solar energy projects in the country as the said project is the largest captive solar power project in the country. The project will meet the energy requirements of Wah Nobel Chemicals Ltd and other industrial units in the area. Chairman POF Board congratulated both Nobel Energy and Reon Energy Solutions for initiating the project as it will prove to be a landmark in the history of captive solar projects in the country. He further added that this endeavour would create confidence into the people who had apprehensions regarding the utility of solar power projects. It would prove to be a role model for industrialists to generate solar energy for their factories and industries to meet their energy needs. Chairman POF Board appreciated the efforts of Wah Nobel Group for initiating this unique project in pursuit of green energy solutions. He said that, "The successful commissioning of this landmark project will contribute to the economic nourishment of our company and will help to build confidence of consumers and industries in the domain of solar power. He said Nobel Energy Ltd and Reon Energy solutions have approached this project with a true collaborative spirit and on the basis of their past experiences. "I am hopeful, both of them will join hands and work together to complete this project on time."-PR

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Tajikistan to provide 1000 megawatts electricity to Pakistan in 2017: envoy

Ambassador of Tajikistan to Pakistan SherAli Jonono here on Saturday said that under an agreement Tajikistan will provide 1000MW electricity to Pakistan in 2017, and necessary arrangements are under process in this regard. While addressing the members of Sialkot Chamber of Commerce and Industry (SCCI) he said that Tajikistan is interested to promote trade relations with Pakistan. The ambassador further said that there are five free trade zones in Tajikistan which are playing tremendous role in accelerating business activities. "Business community of Pakistan can use huge trade potentials as China and Iran are holding five to six trade exhibitions yearly in Tajikistan and Pakistani businessmen can also exploit this opportunity", he added. He further said we are importing pharmaceutical and six trucks of sugar through Chaman and Tehran boarders daily. He urged the business community of Pakistan to focus on opportunities for introducing their products to enhance trade volume between both the countries. In his address of welcome Acting President SCCI Mir Alamgir Meyer said that Sialkot would a milestone in enhancing co-operation between private sectors of both the countries to reap the potential of trade that exists between Sialkot and Tajikistan but so far has remained untapped. There are lot of opportunities for foreign investors in Pakistan, he added. He further stated that in Sialkot sports goods, surgical instruments and leather goods are booming areas for trade and foreign investment. Earlier, the Tajik ambassador visited Iqbal Manzil (the birth place of Allama Iqbal) to pay homage to great philosopher and poet.

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First coal-fired power plants: Nepra approves upfront tariff

National Electric Power Regulatory Authority (Nepra) has approved upfront tariff of levelised tariff of 8.3601 cents and 8.6417 cents for first coal-fired power plants of 660x2 and 150MW installed capacity. The Authority gave determination in accordance with Section 31 Sub Section (4) of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 read with Regulation 3 of the Upfront Tariff (Approval & Procedure) Regulations, 2011 (vide SRO 757(1) 2011). According to a press release, Nepra has introduced new regime of upfront tariff according to which tariff is determined within 10 days of admission of application. In order to arrive at the upfront tariff, the Authority has gone through a rigorous process as provided in Nepra upfront tariff (Approval and Procedure Regulations 2011) and Nepra Tariff (Standard and Procedure Rules 1998). Nepra takes all major decisions after going through a threadbare mechanism of public hearing where comments and views are invited from general public and stakeholders. As an autonomous regulator of the energy sector the authority has to take into account the interest of all the stakeholders though the general consumer protection remains the main priority of the regulator. The application of Port Qasim Electric Power Company (Pvt) Ltd for unconditional acceptance of coal upfront tariff for its 660x2MW (gross) Port Qasim Coal-fired power project and Grange Power Limited for its 150MW (net) coal-fired power plant were accepted and levelised tariff of 8.3601 cents and 8.6417 cents was granted respectively.-PR

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Neighbours offer 6500 megawatts to Pakistan

China, Iran and India are said to have offered 6500 MW electricity to Islamabad to help it fight off a projected 8500 MW shortfall this summer, well informed sources told Business Recorder. "We have offers of 6500 MW electricity in hand from three neighbouring countries but no decision has yet been taken to import electricity from any country," the sources added. China and Iran are willing to export 3000 MW each to Pakistan whereas India has expressed willingness to supply 500 MW. Pakistan and India held a couple of rounds of talks on the modalities of electricity trade but failed to finalise any agreement despite the fact that the Pakistani cabinet had cleared a Memorandum of Understanding (MoU). A Pakistani delegation, source said, will visit Iran during the third week of the current month to discuss electricity tariff. Electricity is already being imported from Iran; however, the Power Purchase Agreement (PPA) has expired. Iran argues in favour of a hike in tariff but Pakistan argues that since price of oil has declined massively there is no justification for an increase in the existing tariff. The sources said both countries will also discuss details of Iranian offer of 3000 MW as no groundwork has been done on this proposal at this stage. Both sides will also discuss different options on the trade of 1000 MW electricity for which an MoU was signed by the then Managing Director Pepco, Rasool Khan Mehsud. "We have to see how Iranian electricity will be injected into Pakistan''s transmission system, and what will be the final cost prior to entering into any agreement," the sources continued. According to sources, since the Central Asia South Asia (CASA 1000) project is at an advanced stage, Pakistan would seriously consider importing 1000 MW from Iran to meet Balochistan''s requirements. "Pakistan has to maintain a balance of imported and locally generated electricity as import cannot be initiated blindly," the sources further added. In reply to a question, the sources said 1500 MW additional power will be added to the system this summer from 740MW gas-fired Guddu thermal plant and 400 MW Nandipur Power Plant which has been converted to furnace oil. The government also expects a few hundred megawatt electricity would be added to the system from solar park, in addition to procurement of electricity from dormant thermal Independent Power Producers (IPPs) at a fixed price.

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'Government taking all-out steps to overcome energy crisis soon'

Punjab Minister for Industries Chaudhry Muhammad Shafique has said that government is taking all-out steps to overcome electricity and gas loadshedding soon. While speaking at the Lahore Chamber of Commerce and Industry here on Monday he said, "Steps are being taken on a war footing in order to strengthen the national economy. Punjab government is encouraging and providing opportunities to the local and foreign investors to invest in the country." He said that all options are being explored to provide uninterrupted power supply to the industry so that industry could grow smoothly and contribute to creating more jobs. He said the federal government and Punjab government are focusing on the alternate energy resources. He said that 60 percent gas crisis shortage would be resolved once LNG import is started from Qatar. He said that concrete measures are being taken to improve the law and order situation as it is must to encourage foreign and local investment. He said that no department would be allowed to create hurdles in the smooth running of business and industry related issues would be resolved on priority. He said that measures are being taken to enhance skilled manpower and new courses are being introduced in collaboration with Tevta in this regard. The minister said that country could earn huge foreign exchange through exporting skilled manpower to the other countries. LCCI Senior Vice President Mian Nauman Kabir while speaking on the occasion said that shortfall which Punjab is facing is not consistent thus pushing the industry further in a state of uncertainty. Even the shortfall is not persistent in Punjab for industrialists to plan ahead for an emergency. He said that setting up of cottage city in the nearby vicinities of large cities can be beneficial for the uplifting of the economy as well as for the economic alleviation. Mian Nauman Kabir said that industrial estates in Lahore should be exempted from loadshedding of gas and electricity completely. LCCI Vice President Syed Mahmood Ghaznavi said that law and order, investor friendly policies and ease of investing are some of the steps which the Punjab government should take to attract the local as well as foreign investors in the province.

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Development of coal, solar & wind sources vital to economic progress: PEW

The government should make all out efforts to develop its vast energy sources such as coal, solar, wind and nuclear power for sustainable economic progress of the country, Pakistan Economy Watch (PEW) on Sunday said. The oil importing countries are happy over reduction in oil prices, including Pakistan but uncertainty looms over oil and LNG markets, PEW President Dr Murtaza Mughal said adding a new energy landscape is unfolding before us with exciting prospects which calls for extra caution for policy-makers. A mistake of judgement at this critical juncture can result in heavy price for the economy and the nation, Dr Mughal warned. He said despite slump, the global LNG supply would get a boost of 10pc during this year and a 30pc jump within next five to seven years. He said the oil price collapse has left many deep sea and other oil extraction projects economically not viable which will have a negative impact on the oil exploration industry in the long run. Due to the uncertainty, many countries have started taking interest in the coal, solar and nuclear power again and our policy-makers should also follow the suit, he suggested. Dr Mughal said India is generating 3000MW from renewable sources but it has started a project to generate 20,000MW from solar energy and 100,000MW of renewable energy by 2022 which is a step towards energy self-reliance. On the other hand, Pakistan where 38 percent population lacks electricity, solar market remains underdeveloped due to technical, economic and institutional barriers that calls for a policy review.

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World Bank accords approval to five energy projects

Finance Minister Senator Ishaq Dar has appreciated the recent approval of country’s five energy projects by the World Bank’s Executive Board. In a statement, he said this approval was the manifestation of confidence of international organisations in the continued improvement in country’s economy owing to prudent fiscal policies of the government led by Prime Minister Nawaz Sharif. The board of executive directors of the World Bank has approved five energy sector projects, which include Gul Ahmad wind power limited, Tenaga Generasi limited (wind power), Gulpur hydro project, Sindh Public Sector Reform project and acceleration of Tarbela IV extension project. The Bank’s approval is in line with the government’s 4Es - education, economy, energy and elimination of terrorism - policy, he said. Dar said the projects added a new chapter to the Pak-World Bank economic co-operation. He assured that these projects would be undertaken with due diligence and completed within the tenure of the present government. This is the largest ever portfolio approved by the World Bank in one month. The energy projects are expected to add over 10,000 MW to the national energy grid.

Copyright Independent News Pakistan, 2015

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Project at Gadani Power Park to be placed in actively-promoted list

The Standing Committee on Planning, Development and Reform met under the Chairmanship of Abdul Majeed Khan Khanan Khail, MNA here on Tuesday. The Committee was briefed that the Prime Minister approved the concept of 6,600MW Pakistan Power Park at Gadani on July 26, 2013 and a company, named Pakistan Power Park Management Company Ltd (PPPMCL) was established on August 6, 2013 under Section 42 of the companies Ordinance, 1984, under the Ministry of Water & Power. The project was originally proposed to establish 10 x 660MW coal-fired power plants with total generation capacity of 6,600MW for which MoUs were signed with Chinese and other power sector companies on IPP basis. Meanwhile, China-Pakistan Economic Corridor Projects has to finalise list of Early Harvest Projects to be presented to the Chinese side during the Expert Group meeting on energy. During meeting with Chinese side in Beijing it has been decided and agreed by both sides that Pakistan Power Park at Gadani shall be placed in the actively promoted list of projects. MNAs Dr Nafisa Shah, Asyia Nasir, Sher Akber Khan and Iftikhar-ud-Din were present in the meeting.-PR

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AJK decides to rebid power project

The Azad Jammu and Kashmir (AJ&K) government has decided to offer 48 MW Jagran-II hydropower project for rebidding after a controversy emerged in the award of the project. Chaudhry Yasin, Minister for Irrigation, AJ&K, who is also head of the AJK hydroelectric board, told Business Recorderthat he took this decision at a meeting of the board to ensure transparency in the award of this important project. The French agency, Agence Française de Development (AFD), has earmarked Euro 68 million for the project and one million Euros for engineering services. The world''s biggest Chinese company in hydropower generation, Sinohydro, which was the lowest bidder through its local representative, wrote a letter to the Prime Minister''s Office for intervention accusing the Azad Jammu and Kashmir Electric Board (AJK-HEB) of accepting the second lowest bid by another Chinese company, CWE. He said, Sinohydro offered to do the job for Rs 6.9 billion while CWE demanded Rs 7.4 billion. The letter written to the Prime Minister''s Office by Sinohydro''s representative said that at the tender opening on September 23, 2013, the read out price of Sinohydro and its local partner was the lowest. During the bid evaluation period, not a single clarification was sought from them with respect to any deficiency in the bid. The letter said that the LHC set aside blacklisting of Sinohydro''s partner by the Punjab government on February 13, 2014. It added that the judicial order removed the ground on which the evaluation committee decided to exclude the lowest price bid. The other objections to the bid pertained to some missing cost items, which are covered by the undertaking given by the Chinese company that its cost offer includes the entire scope of work. However, Gorsee said, Sinohydro''s partner was blacklisted by the Punjab Emergency Services Department when the bids were submitted and opened. He claimed that the LHC did not dispense with blacklisting and only remanded the matter to the competent authority for a decision. "We discussed all pros and cons of the project and decided to offer it for rebidding so that the project can be awarded to the real lowest bidder," Chaudhry Yasin added.

Copyright Business Recorder, 2015

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Coal-fired plants: EPGTPL granted licence

National Electric Power Regulatory Authority (Nepra ) has granted generation licence to Engro Powergen Thar (Pvt.) Limited (EPGTPL) which intends to establish coal-fired power plants of 3600 MW in Thar. EPGTPL will initially establish two projects of 330 MW as first part of the Energy Park which would have total generating capacity of approximately 3600 MW. EPGTPL has already applied for the acceptance of an upfront tariff for coal. The project is also included in the least cost expansion plan of NTDC which would be responsible for evacuation and transmission of power from the power plant. A couple of days ago, Engro Powergen Limited (EPL) signed a joint venture agreement with China Machinery Engineering Corporation (CMEC) for development of 2 x 330 MW coal-based power plant in Thar Block II. The joint venture company, Engro Powergen Thar Limited (EPTL), will enter into a coal supply agreement with Sindh Engro Coal Mining Company (SECMC) for the purchase of 3.8 metric tonnes per annum coal which will be used for power generation. The joint venture agreement was signed by Shamsuddin A. Shaikh - CEO EPL and Zhang Chun - President CMEC. Pakistan is a coal-rich country, with estimated coal reserves of around 185 billion tons. Most of these reserves are situated in Thar

Copyright Business Recorder, 2015

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Country's first LNG terminal set to start operations in March

Pakistan's first Liquefied Natural Gas (LNG) terminal has been completed by Engro Vopak Terminal Limited (EVTL) and the company has given go ahead to the government to start operations in the first week of March, 2015. According to petroleum ministry officials', in the first phase Pakistan is going to strike a long-term LNG supply contract with Qatar at current commodity international rate, which is in the range of $7 to $8 per MMBTU. The sources said that during Petroleum Minister Shahid Khaqan Abbasi's recent visit, Qatar assured Pakistan of supplying sustainable LNG for 15 years at 13.5 percent of Brent (which is around $7 per MMBTU), and Pakistan presented two drafts of agreements - one for long-tem and the other medium-term. "As yet both the countries have not agreed on LNG price but keeping in view the current international prices, it should be in the range of $7 to $8 per MMBTU. The Qatar government has assured Pakistan of supplying the required quantity of LNG. Pakistan has addressed all the concerns of the Qatari government and they are ready to supply LNG," the officials stated. Pakistan at present is facing serious gas crisis, as a result supply to many industries and other sectors has been suspended and to deal with the crisis, the government is going to begin LNG import within the next few years. The government wants to commence importing 400 Million Cubic Feet per Day (MMCFD) of LNG from Qatar on fast track basis for which a LNG terminal has reached its final stage at Port Qasim Karachi with a capacity to handle a maximum of 650 MMCFD of the commodity. The officials said that Malaysian LNG producer and supplier Petronas had also assured Pakistan of supplying 200 MMCFD of LNG per annum. They added that during a recent visit, the senior management of Petronas showed great interest in supplying 1.5 million tons LNG per annum to Pakistan. Under the agreement, the government is required to arrange LNG imports and pick up to 250 mmcfd with effect from April 1, 2015, failing which they will have to pay the Engro LNG terminal operator $270,000 per day. Recently a number of LNG producers approached the government and showed willingness to supply the commodity, including state-owned energy companies of Brunei Darussalam and China. According to the ministry officials, all these companies are interested in supplying the commodity on a government-to-government contract basis. According to the officials, PB Trading Sendirian Berhad, a wholly-owned subsidiary of Brunei National Petroleum Company, also known as Petroleum Brunei, a national oil company, and Petro China, one of China's largest petroleum companies, have expressed interest in exporting LNG to Pakistan. In addition to these, Pakistan would explore the possibility of importing LNG from countries like Australia, Nigeria, Indonesia, Algeria, Russia and Oman, which are exporting gas to many countries of the world. In another major project, the government has awarded a $3-billion Gwadar LNG pipeline and terminal contract to a Chinese company, which will serve as an alternative to the Iran-Pakistan (IP) gas pipeline project.

Copyright Business Recorder, 2015

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Shale oil/gas reservoirs: OGDCL starts exploration

State owned Oil and Gas Company Limited (OGDCL) has started exploration of shale oil/gas reservoirs in the country, senior officials said. The OGDCL board of directors recently approved $8 million for exploring shale oil/gas reservoirs, which according to US Energy Information Administration (EIA), stands at 586 Trillion Cubic Feet (TCF) of gas and over 9 billion barrels of shale oil in Pakistan. The American federal authority on energy statistics and analysis has estimated fresh recoverable shale gas reserves of 105 TCF and over 9 billion barrels of oil in Pakistan. Federal Minister for Petroleum, Shahid Khaqan Abbasi has directed the OGDCL chairman board of directors Zahid Muzaffar and Managing Director (MD) OGDCL, Mohammad Rafi to expedite their efforts in exploring shale oil/gas reservoirs to deal energy crisis. The OGDCL is the leading oil/gas producer with over 1.25 Billion Cubic Feet per Day (BCFD) of gas and nearly 45,000 barrels of crude oil. The Ministry of Petroleum and Natural Resources has formulated first-ever Shale Gas Policy and has to get formal approval from the Economic Co-Ordination Committee (ECC) of the cabinet. A senior Petroleum Ministry official told Business Recorder here on Friday that according to shale gas policy the Exploration and Production (E&P) companies will get around $12 per MMBtu as wellhead gas price, which is almost double the price of E&P companies getting for conventional gas production. Pakistan's conventional gas reserves are estimated to be 58 TCF. The exploration of shale gas is capital intensive and hundreds of wells are explored with the depth of 2,000 to 4,000 meters and explored the shale gas by fracturing the stones with shale gas in rocks. Shale gas is extracted directly from a sedimentary source rock and since it has low permeability as compared to conventional reservoirs, it did not come out easily and, hence, specific investments and pricing is required for its exploitation. The official said the new estimates appeared to be very encouraging for Pakistan but 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 development 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 shale gas. Pakistan is particularly heavily dependent on natural gas for its energy needs. At present actual demand for gas is around 8 BCFD, while managed demand is hovering around 6 BCFD against total supply of 4.3 BCF. Shale gas/oil reservoirs estimates of Pakistan are backed by proven studies and verified technical data. "The risked, technically recoverable shale gas resource is estimated at 201 TCF, with 96 TCF in India and 105 TCF in Pakistan," the EIA said. At present, no shale gas is being produced in Pakistan and significant work is required to kick start this high potential energy source, the officials said. US consultant Advanced Engineering Associates International, Inc (AEAI) that embarked on the strategic study to assess the actual reserves of shale gas in Pakistan and then with the help of the US experts four methods would be formulated to exploit the shale gas reserves. The official said that the US has developed skill to explore shale gas 40 years ago and the shale gas in the US is found on the surface, whereas in Pakistan it is lying in depth 2,000 to 4,000 meters in the land.

Copyright Business Recorder, 2015

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