Hagler Bailly, a global management consulting firm with an office in Islamabad, warned in a 2006 study that Pakistan is going to witness gas shortage starting in 2007, and the imbalance will grow every year to cripple the economy by 2025, when shortage will be 11,092 MMCFD (Million standard cubic feet per day) against total 13,259 MMCFD production. The Hagler Bailly report added that Pakistan's gas shortage would get much worse in the next two decades if it did not manage any alternative sources. It appears that we are seeing the beginning of the crisis that HB predicted back in 2006.
Recent Growth in Gas Demand:
Demand for natural gas in Pakistan increased by almost 10 percent annually from 2000-01 to 2007-08, reaching around 3,200m cubic feet per day (MMCFD) last year, against the total production of 3,774 MMCFD, according to Pakistani official sources. But, during 2008-2009, the demand for natural gas exceeded the available supply, with production of 4,528 MMCFD gas against demand for 4,731 MMCFD, indicating a shortfall of 203 MMCFD. This winter, Sui Northern Gas sources have reportedly told the media that the company is dealing with a shortfall of 700 MMCFD of gas due to increasing use of heaters and geysers.
Energy Shortages:
The potentially devastating effect of the gas shortage on the nation can be gauged by the fact that Pakistanis heavily depend on gas for their energy needs, much more so than neighboring Indians. With a gas pipeline network stretching around 56,400 km, pipeline density of 1044 km/mmscmd (million metric standard cubic meter per day) and a 31,000 km distribution network to serve its domestic and commercial consumers and nearly 3000 CNG stations, the gas consumption in Pakistan is much higher than its bigger South Asian neighbor. India relies more heavily on its vast coal reserves for energy.
According to BMI, gas is the dominant fuel, accounting for 47.5% of Pakistan's primary energy demand (PED) in 2007, followed by oil at 30.7%, hydro-electric energy at 12.9% and coal with a 7.9% share. Regional energy demand is forecast to reach 4,859 million tonnes of oil equivalent (toe) by 2013, representing 24.9% growth from the estimated 2008 level. Pakistan’s estimated 2008 market share of 1.52% is set to ease to 1.45% by 2013. The country’s estimated 2.5TWh of nuclear demand in 2008 is forecast to reach 5.0TWh by2013, with its share of the Asia Pacific nuclear market rising from 0.49% to 0.75% over the period.
In terms of overall energy requirements, here is a more complete picture for per capita energy consumption in South Asia and China, using Nationmaster, with 2006-2007 figures and rankings:
Pakistan per capita gas consumption 187 cu meters(ranked 73)
India per capita gas consumption 36 cu meters (ranked 99)
China per capita gas consumption 53 cu meter (ranked 95)
India per capita electric consumption 466 KWhr (ranked 160)
Pakistan per capita electric consumption 430 KWhr (ranked 164)
China per capita electric consumption 2,179 KWhr (ranked 91)
India coal consumption per capita 0.3 ton (ranked 23)
Pakistan coal consumption per capita 0.03 ton (ranked 35)
China coal consumption per capita 1 ton (ranked 16)
India oil consumption per day per 1000 people 2.4 barrels (ranked 165)
Pakistan oil consumption per day per 1000 people 2.2 barrels (ranked 169)
China oil consumption per day per 1000 people 5.7 barrels (ranked 144)
There is strong correlation between energy availability and level of any nation's development. The nations topping the list of human development rankings are also the largest per capita consumers of energy. 
Only 54% of Pakistanis have access to electricity. Per capita energy consumption in Pakistan is estimated at 14.2 million Btu, which is much higher than Bangladesh's 5 million BTUs per capita but slightly less than India's 15.9 million BTU per capita energy consumption. South Asia's per capita energy consumption is only a fraction of other industrializing economies in Asia region such as China (56.2 million BTU), Thailand (58 million BTU) and Malaysia (104 million BTU), according to the US Dept of Energy 2006 report. To put it in perspective, the world average per capita energy use is about 65 million BTUs and the average American consumes 352 million BTUs. With 40% of the Pakistani households that have yet to receive electricity, and only 18% of the households that have access to pipeline gas, the energy sector is expected to play a critical role in economic and social development. With this growth comes higher energy consumption and stronger pressures on the country’s energy resources. At present, natural gas and oil supply the bulk (80 percent) of Pakistan’s energy needs. However, the consumption of those energy sources vastly exceeds the supply. For instance, Pakistan currently produces only 18.3 percent of the oil it consumes, fostering a dependency on imports that places considerable strain on the country’s financial position. On the other hand, hydro and coal are perhaps underutilized today, as Pakistan has ample potential supplies of both.
Energy Projects:
Pakistan and Germany have initiated serious discussions of German funding of eight ongoing and new hydropower projects worth billions of dollars. These talks have takien place in Islamabad between German Minister for Economic Co-operation and Development Ms. Heidemaire Wiegoreak Zeul and Pakistani Prime Minister's Adviser on Finance Mr. Shaukat Tarin, according Business Recorder newspaper.
In addition to megaprojects such as 1000 MW Neelum-Jhelum hydropower project, a number of community-based micro hydro projects are being executed with the help of the Agha Khan Foundation in Pakistan's Northern Areas and NWFP. Within this region, out of a total of 137 micro-hydro plants, the AKRSP has established 28 micro-hydros with an installed capacity of 619kW. Initially, in 1986, these plants started as research and demonstration units. These projects were extended to Village Organizations (VOs) and became participatory projects. A Village Organization (VO) is a body of villagers who have organized themselves around a common interest.
Pakistan has vast reserves of coal. But there is very little energy produced by burning coal. China has now agreed to invest about $600 million for setting up an integrated coal mining-cum-power project in Sindh. The project will produce 180 million tons of coal per year, which is sufficient to fuel the proposed 405 MW power plant. Pakistan is currently world's seventh largest coal-producing country, with coal reserves of more than 185 billion tons, ranking as the fourth of fifth largest coal reserves in the world. Almost all (99 percent) of Pakistan's coal reserves are found in the province of Sindh. Pakistan's largest coal field is Thar coal field which is spread over an area of 9100 square kilometers, and contains 175 billion tons of coal. So far this coal field has not been developed but efforts are underway.
In addition to the coal project, China has agreed to build several other power plants in Pakistan to help the South Asian nation deal with its worsening electricity crisis. When completed over the next several years, these plants, including Nandipur (425 MW, Thermal), Guddu(800 MW, Thermal) and Neelam-Jhelum(1000 MW, Hydro), Chashma (1200 MW, Nuclear) will add more than 3000 MW of power generating capacity for the energy-hungry country. Pakistan is currently facing a deficit of 4,000 to 5,000 megawatts, resulting in extensive load-shedding (rolling blackouts) of several hours a day.
China has already installed a 325-megawatt nuclear power plant (C1) at Chashma and is currently working on another (C2) of the same capacity that is expected to be online by 2010. The agreements for C3 and C4 have also been signed. The United States has objected to China supplying C3 and C4 on the grounds that any Pak-China nuclear cooperation would require consensus approval by the NSG, of which China is now a member, for any exception to the guidelines. The US is applying double standards since it supported and got approval for such an exception from NSG for its own nuclear deal with India.
Beyond the power generation capacity expansion projects, Pakistan must also pay attention to modernizing its national grid. The country's creaky and outdated electricity infrastructure loses over 30 percent of generated power in transit, partly due to theft, more than seven times the losses of a well-run system, according to the Asian Development Bank and the World Bank; and a lack of spare high-voltage grid capacity limits the transmission of power from hydroelectric plants in the north to make up for shortfalls in the south.
In terms of the cost of renewable sources such as wind and solar, the cost of not empowering the poor rural communities is far greater than the cost of providing a Grameen Shakti type solar system, or Agha Khan Foundation's microhydro or the gearless wind microturbines that are beginning to show up on the rural landscape in Pakistan.
Given the unresponsive nature of "democracies" and incompetent and corrupt governance in India and Pakistan, many of the poor rural communities far away from the national grid will probably never be electrified unless there are community-based local green initiatives pursued with the help of NGOs.
Compressed Natural Gas (CNG) Industry Growth:
According to International Association of Natural Gas Vehicles, as of December 2008, Pakistan has the world’s highest number of vehicles running on compressed Natural Gas (CNG). The number is 2 million. Pakistan also has the World’s largest number of CNG refueling stations, 2941 as of July 29, 2009.
Just as the worst electricity crisis of its history is currently gripping the nation, it appears that the gas crisis has begun to rear it ugly head, with recurring reports of low gas pressure, CNG station closures and rationing, and gas "load shedding" for businesses and consumers. The blame game has already started and there appears to be little relief in sight on either the electricity or the gas fronts. One of the reported effects of the gas shortage is delay in the availability of power from the rental power plants which are expected to operate on gas. It appears that the attempt to solve the electricity crisis has made life even more difficult for the people by spawning a gas crisis at the same time.
Citizens and industries in Lahore have been particularly badly hit, resulting in angry protests widely reported in the media. The All Pakistan Textile Mills Association (APTMA), the textile industry group, has claimed that it suffered losses of about Rs 1 billion in December due to lack of smooth gas supply to the industry. Pakistan's CNG industry is also feeling the pinch after rapid growth in the last few years.
Rental Power Plants (RPPs):
A story in Pakistani newspaper the News is alleging that "these expensive rental power plants, which were being installed with tall claims to address the energy crises in the country, were said to have now become one of the major reasons behind a new sorts of energy crises in Pakistan, as their gas requirements are bound to hit other sectors of economy running on gas supplies".
Solutions For Gas Shortage:
The best solution to alleviate the gas shortage is to build a pipeline to import over a billion cubic feet of gas a day from Iran, but such a project will take many years to implement even on an accelerated schedule. In the meantime, Pakistan's Sui Southern Gas Company (SSGC) is working on completing a project, dubbed Mashal LNG Project, that was started three years ago to import 500 MMCFD of LNG from Qatar by 2010. But even that won't happen till October 2011. The second phase of this project will add an additional 500 MMCFD of LNG by 2013.
In response to the alarming gas situation, there are reports that Pakistan is finally going ahead with the multi-billion dollar Iran-Pakistan Gas Pipe Line Project and has initiated the process of arranging financing of US $1.245 needed for laying 800 Km long pipe line from Pakistan-Iran border to Nawab Shah. Pakistan will also import 1.05 billion cubic feet of gas per day from Iran at 78 percent of crude oil parity price. Pakistan and Iran have already signed Gas Sales Agreement (GSPA) for importing 750 million cubic feet gas per day which will be used to generate 4500 MW of electricity and would be a cheaper alternative to the presently expensive imported furnace oil used in the existing thermal power houses. Another 250 million cubic feet of Gas per day is also envisaged to the purchased for development projects at Gawadar in Balochistan. Considering the magnitude and strategic nature of the Gas Line Project, the government has adopted a private-public partnership approach for financing the project with debt equity ratio of 70:30 under which the Pakistan government will provide 51 per cent equity. This equity financing would be provided upfront through selected Public Sector Entities like OGDCL, Pakistan Petroleum Limited , Government Holding Private Limited, Employees Old Age Benefits Institution and State Life Insurance Corporation. The debt will be sourced from the market backed by the government guarantees for transportation tariff. Any gap in raising the required debt from the market, the funds will be available by PDSP allocations.
The current completion date for Iran-Pakistan gas pipeline project is June, 2014, if things go smoothly. There is significant investor interest. Russia's Gazprom is very keen on the project. "We are ready to join the project as soon as we receive an offer," Russia's deputy energy minister Anatoly Yankovsky has been quoted as saying by the media. Another top Russian government official has said Moscow sees the pipeline as a means to divert Iranian gas from competing with Russian exports on the European market.
Iranian Consul General in Pakistan, Masoud Mohammad Zamani has told Pakistani news site the Dawn that Iran has completed major portion of work on Iran-Pakistan gas pipeline project and within couple of months the pipeline will be at Iran-Pakistan border. Hopefully, by 2013 Iran gas will be used in Pakistan, Iranian envoy explained during a meeting with members of Karachi Chamber of Commerce and Industry.
India, too, needs to import gas to meet its growing energy needs. But it pulled out of the pipeline project after the US-India nuclear deal. If and when India does come back to the table, the pipeline built from Iran to Nawabshah in Pakistan can be extended to support additional capacity for India.
Current Issues:
As the nation's attention turns to the gravity of the worsening gas energy crisis, the growing supply-demand gap for electricity is still unaddressed. The government's attempts to fill the gap with rental power have raised many questions and drawn serious corruption charges from the opposition parties and the media. Analysts at Center for Research and Security Studies are asking why have some private power producers completely shut down? And why are other private power producers operating well below their full capacity? It is being alleged that the reasons for buying rental power to fill the electricity gap rather than pay the outstanding dues of the independent power producers (IPPs) to fully utilize exiting installed capacity have to do with the kickbacks offered by the rental power operators. According to Reuters, Finance Minister Shaukat Tarin almost resigned after failing to persuade the cabinet against renting, an option he considered expensive and inefficient.
There have been widespread complaints in Islamabad, including by Mr. Tarin, that the government had solutions to improve the power output but was refusing to implement them in order to benefit a handful of power plant operators, such as those supplying rental power, while the IPPs are not being paid for supplying power from currently underutilized installed capacity. Requests for information by Transparency International Pakistan regarding rental power contracts have been ignored by the Ministry of Water and Power. There are widespread corruption allegations against President Asif Ali Zardari personally who has allegedly influenced the award of the 783 MW rental power contracts to a former governor of Oklahoma and his Pakistani partner.
Rental power is not an issue by itself. While it does provide some relief, it does not address the core problem of making sure that government departments, politicians, businesses and all consumers pay for power they use to make it attractive for private investments in the power sector.
Currently, most IPPs in Pakistan are operating well below capacity because they are not being paid billions of rupees owed to them. Paying them should be the first step toward filling the supply-demand gap by fully utilizing current capacity, and restoring order in the power market. Unless this done, the electricity rates will keep rising because the honest consumers end up footing the power bill for the many deadbeats and power thieves.
Meeting Energy Demand Growth:
BMI forecasts Pakistan real GDP growth averaging 3.98% a year between 2009 and 2013, with the 2009 estimate at 2.50%. The population is expected to expand from 161mn to 177mn, with per capita GDP and electricity consumption increasing by 20% and 11% respectively. Power consumption is expected to increase from an estimated 81TWh in 2008 to 99TWh by the end of the forecast period, which provides are relatively stable theoretical generation surplus (before transmission losses, etc.), assuming 4.3% annual growth in electricity generation.
Between 2008 and 2018, BMI is forecasting an increase in Pakistani electricity generation of 59.2%,which is mid-range for the Asia Pacific region. This equates to 27.2% in the 2013-2018 period, up from25.1% in 2008-2013. PED growth is set to increase from 19.1% in 2008-2013 to 25.8%, representing 49.9% for the entire forecast period. An increase of 49% in hydro-power use during 2008-2018 is a key element of generation growth. Thermal power generation is forecast to rise by 52% between 2008 and2018, with nuclear usage up 380% from a low base.
Summary:
The failures of successive Pakistani governments in tackling the growing energy crisis are shameful. Inaction at this point would be criminal. The Iran-Pakistan gas pipeline project has to be accelerated to avoid significant further harm to the country. At the same time, the shortages of electricity and gas need to be managed actively and fairly to minimize the impact on the consumers and the businesses to help the economy recover from the current slump. The issue of unpaid electricity bills and the rampant power theft should be confronted head-on to restore investor confidence in long-term energy projects in the country. Since the federal government is the biggest dead beat, followed by the four provincial governments, FATA, the KESC and the KW&SB, it is an opportunity for the current leadership in Islamabad to lead by example by paying off their outstanding utility bills, and resolving the circular debt issue in energy sector expeditiously.
Here is a recent video clip of former President Muharraf talking about the power crisis in Pakistan:
Related Links:
Pakistan's Electricity Crisis
Pakistan's Gas Pipeline and Distribution Network
Pakistan's Energy Statistics
US Department of Energy Data
Electrification Rates By Country
CO2 Emissions, Birth, Death Rates By Country
China Signs Power Plant Deals in Pakistan
Pakistan Pursues Hydroelectric Projects
Water Scarcity in Pakistan
Energy from Thorium
Comparing US and Pakistani Tax Evasion
Zardari Corruption Probe
Pakistan's Oil and Gas Report 2010
Circular Electricity Debt Problem
International CNG Vehicles Association
Lessons From IPP Experience in Pakistan
Correlation Between Human Development and Energy Consumption
BMI Energy Forecast Pakistan
Threre are more reasons to migrate to Canada
1 year ago
80 comments:
Few days back ,I attended an International conference on Science and Technology.In one of the sessions Dr Samar Mubarak Mand(Former Nuclear Scientist)was the speaker.He is now Member Science and Technology with Planning commission.He described about Trillions of tons of coal reserves in Thar and about setting up of a 1000 MW coal fired power plant,where coal would be used in situ.
I do not remember much of his speech ,but got the impression that it just might solve all our Electric and Gas problems
Najam: "Trillions of tons of coal reserves in Thar and about setting up of a 1000 MW coal fired power plant,where coal would be used in situ."
Yes, various reports indicate that Pakistan has vast reserves of coal. But there is very little energy produced by burning coal. China has now agreed to invest about $600 million for setting up an integrated coal mining-cum-power project in Sindh. The project will produce 180 million tons of coal per year, which is sufficient to fuel the proposed 405 MW power plant. Pakistan is currently world's seventh largest coal-producing country, with coal reserves of more than 185 billion tons (second in the world after U.S.A.'s 247 billion tons). Almost all (99 percent) of Pakistan's coal reserves are found in the province of Sindh. Pakistan's largest coal field is Thar coal field which is spread over an area of 9100 square kilometers, and contains 175 billion tons of coal. So far this coal field has not been developed but efforts are underway.
Thar reserves are inflated wildly to trap foreign investors.
Best soln is IPI
But that would invite wrath of White gods.
So that is out.
During 2008-2009, the demand for natural gas exceeded the available supply, with production of 4,528 MMCFD gas against demand for 4,731 MMCFD, indicating a shortfall of 203 MMCFD. This winter, Sui Northern Gas sources have reportedly told the media that the company is dealing with a shortfall of 700 MMCFD of gas due to increasing use of heaters and geysers.
I agree that the best solution to alleviate the gas shortage is to build a pipeline to import over a billion cubic feet of gas a day from Iran, but such a project will take many years to implement even on an accelerated schedule. In the meantime, Pakistan's Sui Southern Gas Company (SSGC) is working on completing a project, dubbed Mashal LNG Project, that was started three years ago to import 500 MMCFD of LNG from Qatar by 2010. But even that won't happen till October 2011. The second phase of this project will add an additional 500 MMCFD of LNG by 2013.
Pakistan is finally going ahead with the multi-billion dollar Iran-Pakistan Gas Pipe Line Project and has initiated the process of arranging financing of US $1.245 needed for laying 800 Km long pipe line from Pakistan-Iran border to Nawab Shah. Pakistan will also import 1.05 billion cubic feet of gas per day from Iran at 78 percent of crude oil parity price. Pakistan and Iran have already signed Gas Sales Agreement (GSPA) for importing 750 million cubic feet gas per day which will be used to generate 4500 MW of electricity and would be a cheaper alternative to the presently expensive imported furnace oil used in the existing thermal power houses. Another 250 million cubic feet of Gas per day is also envisaged to the purchased for development projects at Gawadar in Balochistan. Considering the magnitude and strategic nature of the Gas Line Project, the government has adopted a private-public partnership approach for financing the project with debt equity ratio of 70:30 under which the Pakistan government will provide 51 per cent equity. This equity financing would be provided upfront through selected Public Sector Entities like OGDCL, Pakistan Petroleum Limited , Government Holding Private Limited, Employees Old Age Benefits Institution and State Life Insurance Corporation. The debt will be sourced from the market backed by the government guarantees for transportation tariff. Any gap in raising the required debt from the market, the funds will be available by PDSP allocations.
can some body post a topic here for “First Electric Car in pakistan”
Imagine never to put Patrol or diesel or cng… and never have to change oil in your car…..
you drive your car almost almost Free…..
below is the first Electric car in pakistan….. totally Homemade…
here is the link….
http://www.elektraautomotive.com/
http://evworld.com/article.cfm?storyid=1778
http://observers.france24.com/en/content/20091027-elektra-1-homemade-electric-car-pakistan
http://www.france24.com/en/node/4911224
Check out my blog, on First Pakistani home made Electric Car..
http://123surfer.blogspot.com/2010/01/pakistans-first-electric-car.html
Unfortunately, there is a long history of opacity and graft in the award of power contracts in Pakistan.
In the mid-1990s, BB awarded did the Hubco deal and other IPP contracts, which were later revoked by NS on corruption charges against Zardari, and NS demanded renegotiation that itself brought new charges of graft against Nawaz Sharif. It also soured the investors' interest in power sector.
And now, some of the same IPPS who invested in Pakistan are all running well below capacity, while Zardari is awarding rental power contracts to some of his "friends" such as the former governor of Oklahoma who was himself indicted by the US on corruption charges.
Here's a story from The News about this:
"The former governor of Oklahoma (USA), David Walters, is indeed an extremely resourceful man. As reported by Michael D Bates in the Urban Tulsa Weekly (Sept 3, 2008), “Political observers thought David Walters’ political career was finished when he departed Oklahoma’s Governor’s Mansion in 1995 after a single term and an indictment on eight felony counts.
“Accusations that Walters had promised state jobs in exchange for campaign contributions began early in his term as governor. In October 1993, Walters was indicted by a multi-county grand jury on six felony perjury counts, two felony conspiracy counts, and a misdemeanour count of accepting an excessive campaign contribution. Prosecutors dropped the felony charges in exchange for a guilty plea on the misdemeanour”.
The man who received an indictment in his own country however received riding tips in 1995, from none other than Mr Asif Ali Zardari. And now, almost fourteen years later, the gentleman has bagged extremely lucrative contracts for providing 783 MW of rental power.
Besides enjoying the obvious blessings of the top officials of the country, Mr Walters has none other than the energy czar of Pakistan, I Z Ahmed as his business partner. Mr Ahmed it may be recalled was also touted as being extremely close to the former president, Pervez Musharraf.
Mr Walters confirmed to The News from USA, in writing, that President Asif Zardari was known to him since 1995 when he (AZ) had taken him for a horse ride. “I had the privilege of meeting President Zardari in Islamabad on my last visit to Islamabad last month and reminded him that the last time we had met was when he had invited me and my colleague to join him for horseback riding in 1995. Mr David also recalled that seeing me struggle with the horse, Mr Zardari had said: “I take it riding is not your passion.”
http://www.thenews.com.pk/top_story_detail.asp?Id=24730
Here's a Wall Street Journal report about India trying to reduce dependence on China in power sector:
MUNDRA, India—India is trying to rein in its heavy reliance on Chinese equipment and know-how for the ambitious expansion of its power sector. The shift casts a shadow over what has been a healthy partnership in an often tense relationship between the giant neighbors.
India wants to boost electricity output by 60% in the five-year span ending March 2012 to alleviate severe shortages and help fuel a rapidly growing economy. But it doesn't have enough of its own equipment and engineers to meet that goal, so power companies have looked overseas for help. U.S. and European suppliers are too expensive, but low-cost Chinese contractors are a good fit.
Chinese companies are now supplying equipment for about 25% of the new power capacity India is adding to its grid, up from almost nothing a few years ago. They have sent thousands of skilled workers to Indian plant sites, some of which boast Chinese chefs, Chinese television and ping pong.
But now India is reining in cooperation with China as it seeks to build up its own manufacturing base to service power plants. The Central Electricity Authority, India's top planning body for power projects, recently asked government-controlled power companies to use Indian equipment on all upcoming big projects.
The Indian government is also considering a plan to tax Chinese power imports. And Prime Minister Manmohan Singh's aides have told power regulators to make sure India has enough spare parts on hand to fix Chinese equipment when it needs repairs, according to a person familiar with the discussions.
"It's better that we depend on our own capabilities rather than depend on those from the outside," Rakesh Nath, chairman of the Central Electricity Authority, said in an interview.
Chinese have become master manufacturers-builders and their equipment and contractors are so affordable that even India is using them for a large number of power projects.
Here is an excerpt from a recent Wall Street Journal report on it:
"India wants to boost electricity output by 60% in the five-year span ending March 2012 to alleviate severe shortages and help fuel a rapidly growing economy. But it doesn't have enough of its own equipment and engineers to meet that goal, so power companies have looked overseas for help. U.S. and European suppliers are too expensive, but low-cost Chinese contractors are a good fit.
Chinese companies are now supplying equipment for about 25% of the new power capacity India is adding to its grid, up from almost nothing a few years ago. They have sent thousands of skilled workers to Indian plant sites, some of which boast Chinese chefs, Chinese television and ping pong."
Even as he leaves his post, Shaukat Tarin is sill trying to reduce the energy sector circular debt problem, according to the News:
KARACHI: The government has decided to issue Rs. 25 billion under circular debt head next week, Finance Secretary Salman Siddique said.
Talking to Geo News after meeting chaired by outgoing Finance Minister Shaukat Tarin, he said of the pledged amount, the Finance Ministry will issue Rs13 billion and the remaining amount would be provided by various other departments and the provincial governments.
According to sources, the National Adjustor has hammered out a plan for adjustment of various departments and the provincial governments; however, it is now not clear that the amount would be adjusted in books or paid in cash.
Talking Geo News, Raja Pervez Ashraf said the government inherited the issue of circular debt, claiming the circular debt would be whittled away in March.
Pakistan has one of the highest "transmission losses", a euphemism for rampant power theft by consumers. Now Nawaz Sharif, former prime minister and PML(N) chief, is being accused of addressing a supporter's rally lit by "kunda", a hook-like device commonly used to steal electricity.
LAHORE: Pakistan Muslim League-Nawaz found itself entangled in a controversy on Monday that threatened to undermine its claim of occupying the high moral ground, according to a report by DawnNews.
As Nawaz Sharif addressed supporters in the run-up to a Lahore by-election, his large rally was lit up by extensive use of illegal connections using ‘kunda’ (hooks that are attached to live power cables to secure supply without having to pay for it).
Power utility officials told DawnNews that they would estimate the number of units consumed and bill the user based on that, while Punjab Law Minister Rana Sanaullah tried to distance his party and government from this outrage by blaming an unnamed contractor.
PML-N spokesman Siddiqul Farooq told DawnNews that an inquiry would be held to fix responsibility for what was “clearly” a crime.
In a damage-limitation exercise well past midnight, PML-N leader Saad Rafique told a news conference his party was not at fault and that ‘kunda’ connections had been made by the administration to provide security lighting.
General Electric (GE) has signed an MOU with Pak govt to participate in supporting the forecast 54,0000 MW of electricity demand by 2020. Here's the report from Daily Times:
ISLAMABAD: The government has signed a Memorandum of Understanding (MoU) with General Electric (GE) in the Prime Minister House to help promote the modernisation of Pakistan’s infrastructure and economy.
Saleem H. Mandviwala, Chairman Board of Investment and Nani Beccalli-Falco, President and Chief Executive Officer of GE International singed the MOU on behalf of the government of Pakistan and General Electric Company respectively.
The prime minister welcomed the initiatives of General Electric to support Pakistan’s national objective for development. He expressed the democratic government’s commitment of making Pakistan a trade, investment and financial hub.
“This is a landmark day that we have signed the MoU with one of the most renowned conglomerates of the USA, and this will certainly open another productive era of economic ties and people to people contacts,” the Prime Minister said.
The agreement focuses on the development of Pakistan’s energy resources to meet projected demand of 54,000 megawatts by the year 2020. “General Electric is helping build the energy, water, transportation and technology infrastructure of the new century,” says Nani Beccalli-Falco, President and Chief Executive Officer of GE International. “There are huge synergies between the products and services GE businesses provide in energy and infrastructure and the needs and goals of Pakistan to modernize its economy with cleaner, more efficient and better infrastructure technologies.” GE has similar agreements with a number of other governments, including Kazakhstan, Nigeria, Qatar and the province of Ontario, Canada.
The government of Pakistan aimed to meet projected energy demands using diverse sources and tactics. Possible solutions include renewable sources, such as, wind, solar, geothermal, biomass, coal, hydro and conventional thermal through gas and steam turbines, rehabilitation of existing power generation facilities, along with transfer of technology for manufacture and repair of turbines, developing more efficient and environmentally sound rail transport systems, developing water purification and reuse, wastewater treatment, and process system programs.
According to the MOU’s terms, GE would assist Pakistan in achieving its goals by engaging in Pakistan’s energy, transportation and water sectors and would work to identify potential sources of funding and explore potential investment opportunities in those sectors. Pakistan has committed to meeting with GE regularly to facilitate the goals of the MoU and provide support to the establishment and operation of the GE facilities in Pakistan, transparently and consistent with the laws and regulations of Pakistan. Pakistan would also facilitate the issuance of work permits and visas for the GE employees and contractors as needed in order to support the objectives of the signed MOU.
Here's a UPI report on Pakistan's energy situation:
ISLAMABAD, Pakistan, March 15 (UPI) -- Islamabad ordered its Finance Ministry to release emergency funds
to the state energy sector to stave off an oil, gas and electricity crisis in the country.
Pakistani Prime Minister Yousuf Raza Gilani called on lawmakers to come up with ways to avoid defaulting on foreign payments against oil supplies as the country grapples with a looming energy crisis.
Islamabad was forced to consider international loans to help the energy sector, which is dragging on the embattled national economy. Pakistani Finance Minister Shaukat Tarin stepped down in February because of the economic turmoil.
Gilani in an emergency meeting called for the weekend release of emergency funding to help the energy sector pay its debts as several sectors faced imminent cut offs, Pakistan's Dawn newspaper reports.
Raja Pervaiz Ashraf, the Pakistani water and power minister, said utility companies were running short on natural gas.
Gilani called on top Cabinet officials to present plans for a gas pipeline from Iran as early as Wednesday.
Pakistan and Iran signed a 25-year deal for natural gas supplies in 2009 as part of an effort to advance plans for the so-called Peace Pipeline. The project, envisioned in the 1990s, would move natural gas from the giant South Pars gas complex in the Persian Gulf to markets in Pakistan and India.
Here's a UPI report about the implications of Iran-Pakistan gas pipeline for US policy to sanction Iran:
TEHRAN, March 19 (UPI) -- As Iran braces for another broadside of economic sanctions over its nuclear program.........
----------------
U.S. energy analyst Gal Luft said the pipeline could also "have profound implications for the geopolitics of energy in the 21st century and for the future of South Asia."
Iran and Pakistan signed an agreement for the construction of the 560-mile, $7.5 billion pipeline .........
The project is crucial for Pakistan's growing energy requirements. Iran will supply 750 million-1 billion cubic feet of gas per day by mid-2015.
The project was first mooted in 1994. It was intended to carry gas through Pakistan to India in a 1,724-mile pipeline. But India, under intense pressure from the United States, withdrew in 2009, citing disputes over prices and transit fees. There was also deep misgivings in New Delhi about dealing with its longtime foe Pakistan.
India has invested instead in nuclear power to meet its ever-rising demand for energy in its burgeoning economy. It signed a landmark deal with the United States in 2008 for nuclear equipment.
There has been no official explanation about why the Americans would allow Pakistan to go ahead and sign a pipeline agreement with Iran at a time when Washington is striving to isolate the Islamic Republic and paralyze its economy.
But the Americans cannot afford to antagonize Pakistan at a time when Washington needs Islamabad's support to fight al-Qaida and the Taliban. Pakistan is already suffering serious energy shortages with an electricity shortfall of 3,000 megawatts. These cause politically troublesome long and frequent blackouts.
The United States had been pressing for a pipeline to South Asia from gas-rich Turkmenistan in Central Asia via Afghanistan that would bypass Iran. But the security situation in Afghanistan made such a project unlikely.
India hasn't closed all doors to the project and may still rejoin. It is expected to require 146 billion cubic meters of gas per year by 2025 and its options are limited.
China, ever hungry for energy to fuel its mushrooming economy, has indicated that it might sign on and run an extension of the pipeline from Pakistan.
It may provide financial assistance to Islamabad for the project, which would provide an overland energy corridor less vulnerable to interference by the United States -- or others -- than the long tanker route from the Gulf across the Indian Ocean to the Pacific.
China is the main obstacle preventing the United States mustering the U.N. Security Council behind new sanctions on Iran. Sanctions would cut 10-12 percent of China's oil imports and jeopardize oil contracts worth hundreds of billions of dollars.
Iran desperately needs this project.....
But U.S.-led sanctions have prevented it from exploiting this through high-volume exports. The pipeline to Pakistan, and possibly the massive markets in India and China as well, could change all that and immunize Tehran from U.S. pressure.
The geopolitical implications of the Iran-Pakistan pipeline going through are immense. If the Americans relent, they may secure concessions from Iran and would certainly win influence in Pakistan by helping it out of a worsening energy crisis.
"By connecting itself with the world's second largest gas reserves, Pakistan would guarantee reliable ....
"If the pipeline were to be extended to India it could also be an instrument of stability in often tense Pakistan-India relations as well as a source of revenue for Islamabad through transit fees." One estimate puts that at around $600 million a year.
Here are some excerpts from Fareed Zakaraia's interview with US Energy chief, Nobel Laureate Dr. Stephen Chu:
"I see the cost of [solar] photovoltaics going down and down. Right now it's about $4 per watt for full installation. In a decade it will certainly be less than $2. If it's $1 or $1.25, then everyone will put it up without subsidy. What else do I see? A new generation of biofuels that are direct substitutes for gasoline—so, better than ethanol—using agricultural waste: weed straw, rice straw, corncobs, wood surplus."
"We're at about 4 percent now (renewables sources). President Obama made a target to double that by 2012, and we are on target. I expect that to continue. In 10 years' time we hope to have carbon-capture-and-sequestration technologies starting to be deployed. Hopefully, we'll have restarted the nuclear industry and we'll be building several nuclear reactors."
Here's are excerpts from a report about "Solar India" initiative in Pakistan's neighborhood:
The country is blessed with radiant sunshine: it ranks at the top among the world's countries in in terms of annual solar energy
yield, according to recent studies.
But it is also a country where 412 million of its 1.1 billion people live without electricity, faces an energy deficit of 16 per cent and needs power desperately to drive its high economic growth.
Aiming for long-term energy security, the government has unveiled plans to boost solar output almost 1,000-fold to 20,000 megawatt by 2022.
The 'Solar India' initiative, to be implemented by the Ministry of New and Renewable Energy, would power cities and rural areas and could revolutionize the domestic solar-energy industry.
Fossil fuels currently account for 70 per cent of India's energy mix, while renewable sources provide about 9 per cent.
'Given the ground realities, major challenges include effective financing, advancing R&D in technologies for solar modules and components and human resources like training engineers and technicians,' said Rajinder Kumar, secretary general of the Solar Energy Society of India.
'We have to bring in a balance of system, distribution and maintenance to realize our solar dream,' Kumar said.
The investment
required for the three-phase programme is around 50 billion dollars, of which the government would contribute about 40 per cent.
There is little clarity on where the remainder should come from, with Indian expecting that rich countries with a responsibility to assist renewable projects in the developing world would provide the funding.
The strategy currently framed would include a long-term policy to purchase power and shift subsidies from fossil fuels to renewable-power generation.
'We need to reduce high-initial costs for solar-power generation and build grids of scale to allow rapid diffusion of solar technologies and large-scale domestic manufacture of equipment,' renewalbe energy ministry spokeswoman Prabahvati Akashi said.
The ministry says there is 'tremendous interest' from companies and entrepreneurs for the pilot programme based on feed-in tariffs.
Following a recent launch of small commercial solar farms, the Clinton Foundation is setting up 3,000- to 5,000-megawatt (MW) solar energy parks in northern Rajasthan.
Here's a billion dollar LNG contract scandal uncovered by a complaint of the Fauji Foundation CEO, as reported by The News:
The NA members were told that the petroleum ministry bosses had never recommended to the Economic Coordination Committee (ECC) to give the multi-billion dollar contract to French firm (GDF-SUEZ), whom surprisingly they all were religiously defending now.
It was disclosed that the petroleum ministry had actually recommended the award of the contract to Shell-Qatar, whose bid was higher than the French bid by $1.5 billion. But Shaukat Tarin had thrown this recommendation of the ministry in a dustbin after he learnt that he was being asked to award the contract to a party (Shell), whose bid was higher by $1.5 billion compared to the lowest bidder.
At the end of the hour-long presentation followed by a question-answer session, Chairman MNA Sheikh Waqas Akram, praised the journalist for his comprehensive presentation. Later, MD Fauji Foundation Lt Gen Rab Nawaz was said to have reiterated his old stance that his firm’s bid was the lowest if compared with the GDF-Suez, which was awarded the deal.
The committee met with Chairman Sheikh Waqas in the chair and was attended by MNAs Barjees Tahir, Nawab Yousuf Talpur, Wasan, Khurum Wattoo and others. Petroleum Minister Naveed Qamar, Secretary Kamran Lashari, Special Secretary G A Sabri and MD FF General Rab Nawaz attended the meeting.
Klasra told the committee that his story was based on the minutes of the ECC presided over by then Finance Minister Shaukat Tarin. The minutes had revealed that Tarin had got a telephone call from MD Fauji Foundation that the lowest bid given jointly by FF/Vitol had been rejected and the highest bidder GDF-Suez was given the lucrative contract. Tarin had informed MD FF that he was not aware of any such bidding because the petroleum ministry never shared such information in its official summary tabled before the ECC on Feb 9.
Consequently, Tarin had alarm bells ringing and had ordered a serious probe into the whole issue as to why the bid offered by FF/Vitol was not mentioned in the summary. But the petroleum ministry never replied to the queries of Tarin till he departed from his office at the end of February, much to the satisfaction of the petroleum ministry officials who thought that the issue had been buried but the publication of the scandal by The News shook them.
Petroleum ministry officials had even written a letter to Tarin, informing him that Minister Naveed Qamar had desired that they should not respond to him as he would “personally deal” with this issue. According to Klasra, he had contacted Shaukat Tarin to get his version about these startling developments and the ex-FM had confirmed on record that he was kept in the dark about the joint bid of FF/Vitol, which was claimed to be the lowest.
Tarin confirmed that he got no reply from the Ministry of Petroleum till he left the office. He also claimed that according to his calculation and information, there was a difference of one billion dollars in the bid price of the French company and FF/Vitol, so the country had suffered a loss of a billion dollar.
Minister Naveed Qamar is a close friend and ally of Zardari.
Here's a Dawn report on US plans to help Pakistan's power sector:
LAHORE: Help for Pakistan’s energy sector will be a top priority in plans for direct US investment in the country under the Kerry-Lugar Bill, Administrator of the US Agency for International Development (USAID), Dr Rajiv Shah, said here on Wednesday.
“The US will help refurbish three thermal and one hydel power plant that will add some 4,500MW to the national grid,” Mr Shah said while talking to this correspondent at Lahore airport before leaving for Islamabad. USAID’s Pakistan Mission Director Robert Wilson was also present.
Dr Shah said the US would invest directly in Pakistani institutions in a wide range of areas. “It is time to take immediate action to aggressively meet education and health needs also.”
He dispelled a perception that a large part of the funding would go to consultants and contractors in the United States. “It will be utilised in water, education, health and agriculture sectors that are in tremendous need of development through short-, medium- and long-term infrastructural reforms.”
He said the initiatives would help create employment, especially in tribal areas where small and medium projects relating to infrastructure development, livelihood support and technology transfer would be launched.
The quality of education would be improved through teachers’ training, curriculum development programmes and provision of textbooks in other less developed areas, especially southern Punjab, he said.
In health sector, he said, the focus would be on strengthening professional institutions and USAID would arrange for capacity building of lady health workers and paramedical staff and higher education of physicians.
Dr Shah said reinvestment in agricultural research would be another major area of attention. “We are proud to be partners in research activities at the agriculture universities of Faisalabad and Rawalpindi. Now plans are afoot to improve training facilities and marketing skills of farmers as agriculture contributes more than 25 per cent to Pakistan’s Gross Domestic Product.
“We will work on the critical issue of water with programmes aimed at helping Pakistan better manage its water resources to ensure maximum water access to the people.”
Dr Shah said: “President Obama and Secretary of State Clinton launched strategic dialogue with Pakistan to make sure that our relationship is a broad and deep partnership defined by mutual respect and cooperation in a broad range of areas, especially energy, water, education and health sectors that are very important for development of cooperation.
“This trip was really an effort to follow up that strategic dialogue. We are here to meet Pakistani leaders in government, private sector and civil society. We also have a chance to meet professors at universities and hold discussions to explore effective means and ways to work together.”
Iftikhar A. Khan adds from Islamabad: Addressing a press conference in the federal capital, Dr Shah said aid to Pakistan was not tied to the country’s performance in stemming militancy. He underlined the need for financial management control to ensure that the aid was spent to achieve the defined objectives.
He said the US had significantly enhanced investment portfolio for Pakistan without setting any specific conditions.
He said the purpose of his visit was to learn about priorities in development and put in place many principles discussed during the recent round of strategic dialogue in Washington.
Dr Shah hinted at the possibility of helping Pakistan augment its water reservoirs. “We are looking at a broad range of options and will do everything which makes economic sense.” He said the US was working with other donors and international partners to help Pakistan improve its hydro infrastructure.
Here's a BBC report about Pakistan government's latest plan to tackle power shortages:
According to government sources, Pakistan's energy shortfall comes to around 3,668 megawatts (MW) per day.
BBC correspondents say officials hope the new measures will save 1,500 MW a day.
Mr Gilani said that Pakistan's government would pay 116 bn rupees ($1.38bn) to the power sector to help resolve the issue of debt owed to various power producers within the industry.
Measures include extending the official weekend from one to two days, early closure of street markets, and a 50% cut in power to government offices.
Pakistan's energy crisis is due to a surge in demand and a failing power distribution infrastructure.
The shortages have crippled industry and led to rioting across Pakistan.
Electricity supplies to homes and businesses across Pakistan are often cut for several hours a day because of the power shortfall.
Extending the weekend will shorten the working week and so cut electricity use by businesses.
Mr Gilani says the government will take the lead in cutting demand for energy.
"We are taking these decisions in the best national interest," he told reporters.
Other energy-saving measures include:
* The power supply to Karachi, Pakistan's main port and industrial capital, will be reduced by 300 MW a day
* Marriage halls will no longer be able to host all-night wedding parties
* Neon signs and brightly-lit billboards are to be banned
All the measures will be reviewed at the end of July.
Mr Gilani said he would introduce government units and 13 independent power producers as part of the plan.
He said the steps were necessary and that the government now had a long-term strategy to deal with the power crisis.
The BBC's Syed Shoaib Hasan in Islamabad says that the energy crisis is also seen as a threat to Pakistan's security situation.
Pakistan's leadership has been examining alternatives to its hydroelectric power-based energy producing sector.
One option they are looking at is more civilian nuclear power plants, our correspondent says.
Here's a NY Times report about Pakistan's growing power crisis:
Pakistan is in the throes of an energy crisis, with Pakistanis now enduring about 12 hours of power cuts a day, a grueling schedule that is melting ice, stopping fans and enraging an already exhausted populace just as the blast furnace of summer gets started.
In an effort to stem that frustration, Pakistan’s government held an emergency meeting last week, bringing together top bureaucrats from across the country. But instead of easing the problem, it aggravated it, ordering power-saving measures that seemed calculated to smother some Pakistanis’ last remaining pleasures.
“They are playing a joke on us,” said Amina Ali, the mother of a bride at a wedding hall that was under orders to close early as part of the new energy-saving restrictions. Her brother chimed in: “The Pakistani people are a toy in the hands of the government.”
The power failures could prove destabilizing if they go unchecked, analysts said. Pakistan badly needs its economy to expand to make space for its bulging young population, and chronic power cuts work against that.
It is a concern for the United States, which is trying to help steady Pakistan’s wobbly finances and keep its democratically elected government afloat. The Obama administration has pledged about $1 billion for energy over the next five years.
The crisis is a snarl of unmet responsibilities, and untangling it will not be easy. It has a cast of guilty characters that goes back years: governments that are incapable of planning ahead; bureaucrats who take bribes; even ordinary people who steal about 30 percent of all the power produced. The tribal areas in the west, for example, have no meters and have never paid for power.
The result is about $2 billion a year in energy that is generated but not paid for. Industry experts said they were skeptical the government had a way to close the growing gap between Pakistan’s demand for power and the energy sector’s ability to produce it.
“There is nobody in Islamabad who is working on a coherent, integrated plan,” said one industry executive who asked not to be identified because he did not want to be seen as being critical of the government. “The discussion just keeps going in circles.”
Here are excerpts from a Washington Post report about China-Pakistan nuclear deal:
"President Obama has strongly advocated for restrictions on the spread of nuclear technology. But his administration has said little publicly about the China-Pakistan deal. Meanwhile, the administration announced Tuesday that China, despite its misgivings, had signed on to a draft U.N. Security Council resolution sanctioning Iran."
"A senior administration official, speaking on the condition of anonymity to talk more freely, said the United States is waiting for China to detail how it plans to proceed with this transaction. "We don't have much clarity, and so the issue has not ripened in the government," he said. He said any claim that the reactors are grandfathered "would be a hard case to make," but China could seek a formal exemption from the guidelines -- which are voluntary in any case.
Indeed, complicating matters is that the United States, after hard lobbying, in 2008 won a specific exemption at the NSG for trade with India, Pakistan's nuclear-armed rival. Pakistan has long wanted its own exemption -- and the United States has refused -- but the administration may not want to roil relations with Islamabad at a time when their partnership on counterterrorism is seen as crucial."
"Daryl G. Kimball, executive director of the Arms Control Association, said the China-Pakistan deal "is some of the fallout of the India-U.S. civil nuclear agreement" -- which included the special exemption for nuclear trade. The deal was a Bush administration initiative -- but was avidly supported by then-Sens. Barack Obama, Joseph R. Biden Jr. and Hillary Rodham Clinton."
A recent Ruters' blog post asks the provocative question: "Is Baluchistan more strategically significant than Afghanistan?"
Here's the text of the post:
Baluchistan, Pakistan’s biggest province, rarely gets much attention from the international media, and what little it does is dwarfed by that showered on Afghanistan. So it is with a certain amount of deliberate provocation that I ask the question posed in the headline: Is Baluchistan more strategically significant than Afghanistan?
Before everyone answers with a resounding “no”, do pause to consider that China – renowned for its long-term planning – has invested heavily in Baluchistan, including building a deep water port at Gwadar on the Arabian Sea to give it access to Gulf oil supplies. The region is rich in gas and minerals; attracting strong international interest in spite of a low-level insurgency by Baluch separatists.
Bordering both Iran and Afghanistan, it lies along the sectarian and geopolitical faultlines that have fissured the region since the 1979 Islamic Revolution in Iran and Soviet invasion of Afghanistan later that year. Its capital, Quetta, is often cited by Washington as a haven for the Afghan Taliban in the so-called Quetta shura, who operate independently of the more secular Baluch separatists.
The province is also a source of friction with India, with Pakistan accusing it of using its presence in Afghanistan to fund the Baluch separatists, a charge Delhi denies. Whatever the rights and wrongs of that argument, you can be fairly sure that anywhere lying on the intersection of Indian, Chinese and Pakistani interests will be strategically far more important than it might appear on the surface.
In that context, Forbes Magazine has a must-read take-out on China’s drive to develop its presence in Baluchistan.
“In the Pakistani province of Balochistan, South Asia and central Asia bleed into the Middle East. Bordered by Afghanistan, Iran and the Persian Gulf, and well endowed with oil, gas, copper, gold and coal reserves, Balochistan is a rich prize that should have foreign investors battering at the gates,” it says. “But for a half-century it has been the exclusive playground of the Pakistani government and its state-owned Chinese partners. China would prefer it to stay that way.”
For an entirely different view, Informed Comment has a guest contribution up by Berkeley academic Kiren Aziz Chaudhry. The arguments can be a bit distracting if you don’t buy into conspiracy theories about the reasons for the U.S. presence in Afghanistan. But do persevere until you get to the point where the writer identifies Baluchistan as the main centre of interest for the many rivalries across Afghanistan and Pakistan: “The fulcrum is the province of Balochistan. And within Balochistan, the pivot is the dusty, obscure coastal town of Gwadar. Gwadar has a spanking new deep water port. Wheels within wheels. Devices within devices.” It’s worth reading through to the end, if nothing else but because this little known part of the world deserves as many different voices as possible.
At the very least, both articles should leave you with a doubt in your mind about the original question as to whether Baluchistan is strategically more important than Afghanistan.
And then revisit another question I asked a year ago. Who will win the peace in Afghanistan?
Here's the news of Faisal Saleh Hayat asking the Supreme Court to review irregularities in the award of rental power plants:
ISLAMABAD: Justice Khalilur Rehman Ramday, a member of the Supreme Court bench hearing allegations of corruption in rental power plants (RPPs) projects, said on Wednesday he wondered why Pakistan was getting a mere 150MW of electricity despite having paid a whopping amount of Rs18 billion as a mobilisation fund to power generators one and a half years ago.
Taking a suo motu notice of the allegations, the three-judge bench comprising Chief Justice Iftikhar Mohammad Chaudhry, Justice Ghulam Rabbani and Justice Ramday ordered the IT in-charge of Pakistan Electric Power Company (Pepco) to retrieve information about the company’s generation capacity of the past one year, along with details of shortfall.
According to former minister Faisal Saleh Hayat of the PML-Q, the information had been removed by Pepco from its website.
“The statement seems to be true as our own responsible officer from the IT department confirms it,” the chief justice said, adding: “Prima facie we are of the opinion that Pepco for reasons known to its authority has removed the figures whose retrieval is very important for a decision by this court.”
The chief justice observed: “After such a big investment, prima facie the desired results have not been achieved.” He said that not any other forum, but an Asian Development Bank report itself had said so.
Last year the federal government had approved plans to set up rental power projects to generate about 1,206MW of electricity to end loadshedding.
But the plans became controversial when Faisal Saleh Hayat, a member of the National Assembly, levelled corruption allegations against Water and Power Minister Raja Pervez Ashraf in the house. Mr Ashraf rubbished the allegations and threatened to sue Mr Hayat.
The court asked Pepco’s IT in-charge to appear in person and submit the company’s authentic record.
He is required to retrieve the information from ‘master server’ if it is not available at the website.
Mr Hayat, who was summoned by the court to substantiate the allegations, described the RPP deal as the mother of all corruption and said the units being installed were 10 years old and had outlived their utility.
“They (plants) are not only very expensive, but their generation capacity has also deteriorated over the years,” he said.
Citing the official record he had downloaded from Pepco’s website, Mr Hayat said that Pakistan’s power generation capacity was about 19,478MW in 2008 while the total electricity demand was 18,200MW in 2009. About 3,068MW had been purchased from independent power producers (IPPs) which, he said, was half the capacity of 6,098MW generated through thermal plants.
Despite adequate generation capacity, Mr Hayat alleged, the much-needed power requirement was deliberately not met to justify installation of rental power houses and callously leave the poor masses to bear 14 to 18 hours of loadshedding. Besides, he said, managing directors had been appointed in Pepco in violation of the company rules because they were neither engineers nor finance specialists, or from business or accounts.
“The power generated by IPPs cost us 10 to 12 US cents per unit while the same from RPPs will cost us 15 to 22 cents,” Mr Hayat said.
But Khawaja Tariq Raheem, the counsel for Pepco, said the electricity from RPPs would cost the country Rs14 per unit while the same from thermal power (IPPs) cost Rs12 to 18. The electricity from hydel projects cost Rs2-2.5.
Here's a piece on plans for wind turbine domestic manufacturing in Pakistan published in Dawn:
PROPOSALS for local manufacturing of wind turbines and allied equipment on commercial basis from foreign and domestic companies for partnership with Pakistan Machine Tool Factory (PMTF) at Karachi are in advanced stage of evaluation. The initiative has been launched by the State Engineering Corporation.
In July 2009, the expressions of interest (EOIs) were invited by the Corporation internationally. World reputed manufacturers in the USA, China and the European countries were also contacted directly seeking their collaboration for progressive manufacturing of wind turbines.
Enormous potential for power generation from wind energy has been identified in various parts of the country.. In 2006, the Alternate Energy Development Board (AEDB) had announced an attractive investment policy for promotion of renewable energy and many manufacturers of wind turbines like GE Energy (Canada), Vestas (Denmark) and Siemens/Fuhrlander (Germany) had shown interest in setting up wind farm projects in partnership with domestic entrepreneurs.
This is not for the first time that efforts have been made for manufacturing of machinery for wind mills. In response to the Energy Policy 1994, two wind power projects were proposed to be established in Sindh and Balochistan. The American sponsors of Kenetech wind power project of 100 mw capacity, who are also the manufacturers of wind turbines, had collaborated with the PMTF for local manufacturing of wind turbines, under technology transfer arrangement. No physical progress was achieved as none of the projects was approved by the government, courtesy the powerful lobby of oil-based thermal power plants.
Again, in 2006, Heavy Mechanical Complex (HMC) planned to diversify its wide-range production programme of power plant machinery to cover wind energy projects as well. The pioneering efforts by HMC to obtain requisite technology for one or two megawatt capacity wind turbine from any global key player however, were thwarted by the AEDB, which instead supported private sector participation for local manufacturing. The AEDB had claimed to have signed agreements with a few Western companies for the design, engineering and manufacturing of wind turbines and accessories. Based on these agreements the AEDB was said to be looking for qualified companies to commence assembly-cum-manufacturing of equipment locally. Nothing happened.
In the recent past, New Park Energy Limited proposed to establish a wind turbine generator assembly plant at Nooriabad, Dadu. The sponsor has obtained approval for the development of a wind farm of 1,000 mw in phases, the first phase project being of 400 mw capacity.
The government has allocated 1,000 acres of land to the company in the Gharo-Keti Bunder wind corridor on concessionary rates. The first wind energy project was thus launched in December 2004, but only of 45 mw capacity, proposed to be installed with 30x1.5 mw General Electric (GE) wind turbines. The project, which was to attain commercial operations in 2007, still remains on paper and even the Letter of Support (LOS) has not yet been obtained by the sponsors, despite a lapse of five years......
If the indigenisation programme is successfully implemented it would prove to be precursor for rapid development of the wind power projects for its low cost, high reliability and for being environmental friendly. India has over 10,833 mw installed wind power capacity, as in September 2009, with majority of wind turbines produced locally. Today, India has nine principal manufacturers and suppliers of wind electric generators in the range of 225 kw to two mw units.
The Transparency International Pakistan (TIP) has claimed that it has identified corruption cases worth Rs 300 billion in different federal government departments during the last one year.
Expressing his disappointment, Chairman TIP Syed Adil Gillani said that there was no effective accountability process in Pakistan due to which corruption was on the rise. He said that the TIP referred a number of corruption cases to the National Accountability Bureau (NAB), one of Pakistan's controversial departments, but it did not initiated so far a single case against the perpetrators.
"Only the Supreme Court of Pakistan, the Public Accounts Committee of the National Assembly and the Public Procurement Regulatory Authority (PPRA) took notice of some of these corruption cases," he said.
The report released by TIP on Tuesday indicates that Pakistan is all set to hit further lows amongst the world's most corrupt nations. The 2009 report showed Pakistan climbing five numbers from the previous 47 to become the 42nd most corrupt country in the world.
Amongst the major corruption cases, Gillani said the Rental Power Projects (RPPs) of the government, was on the top. The government awarded 14 contracts in violation of the PPRA rules which caused a loss of over US$ 2 billion. The TIP had also written to the Supreme Court on this case of massive corruption and irregularity.
The sale and procurement policy of the Pakistan steel Mills had caused a reported loss of Rs 22 billion due to corruption. This corruption case had already been taken up by the apex court.
Gilani also informed of about the alleged violation of Pubic Procurement Rules 2004 by Pakistan Railways in the tender for procurement of 150 locomotives, only US made, which might have caused a loss of at least Rs 40 billion to the national exchequer. The project, he said, is presently on hold.
The other departments involved in mega corruption cases, according to Gillani, include Pakistan's Oil and Gas Development Company (OGDCL), National Insurance Corporation Limited (NICL), PRIMACO (Pakistan Real Estate Investment and Management Company Ltd), National Highways Authority (NHA), Trade Development Authority of Pakistan (TDAP), Pakistan Electric Power Company (PEPCO), Employees Old-age Benefit Institution (EOBI). Pakistan's Oil and Gas Development Company Limited made headlines in the recent past when Prime Minister Gillani appointed his jail mate and a convict who was not even a graduate as its managing director.
Read more: Pakistan world's 34th most corrupt nation - The Times of India http://timesofindia.indiatimes.com/world/pakistan/Pakistan-worlds-34th-most-corrupt-nation/articleshow/6815792.cms#ixzz13Vn9ofdc
Despite Iran and Pakistan signing on an ambitious gas pipeline deal with its possible extension to India, the multi-billion project is unlikely to take off, according to the text of an American diplomatic cable released by WikiLeaks.
A source, whose name has been removed, in the cable confided to the US diplomat in a private conversation on June 4, 2009 that he viewed near-term implementation of the Iranian-Pakistani gas link project as "very unlikely", the cable said.
It seems like there are efforts to revive TAPI (Turkmenistan-Afghanistan-Pakistan-India), backed by US as an alternative to Iran-Pakistan-India pipeline. Here's a BBC report:
A deal has been struck on building a 1,700km (1,050m) pipeline to carry Turkmen natural gas across Afghanistan to Pakistan and India.
The Tapi project aims to feed energy-deprived South Asian markets and transit fees may benefit Afghanistan.
But details about security and funding were not addressed in the framework agreement reached by the four states.
The pipeline will have to cross Taliban-controlled regions and Pakistan's troubled border region.
Turkmenistan has previously costed the project at $3.3bn (£2.1bn, 2.5bn euros) although other estimates are as high as $10bn.
Tapi, a project which dates back to the mid-1990s, is backed by the Asian Development Bank (ADB).
The US has also encouraged the project as an alternative to a proposed Iranian pipeline to India and Pakistan.
The framework intergovernmental agreement was signed in the Turkmen capital Ashgabat by three presidents - Hamid Karzai of Afghanistan, Kurbanguly Berdymukhamedov of Turkmenistan and Asif Ali Zardari of Pakistan - and India's energy minister, Murli Deora.
"This will not be an easy project to complete - it is mandatory that we guarantee the security of the pipeline and the quality of construction work," ADP chief Haruhiko Kuroda told reporters in Ashgabat.
Here's a piece on India's energy and food crises:
The sound of trumpets–or was it sirens–was heard from Delhi this week as India’s Premier got loud about his country’s future energy needs. It’s not often we are treated to such transparency. In contrast, China tried to spin its own future call on global energy through the framework of limits this week when it declared it would hold coal consumption to 4.0-4.2 Mt (million tons) by 2015. Clearly, China’s coal consumption juggernaut wants to downplay the fact that these are coal use levels 25 percent to 30 percent higher than today.
In India, meanwhile, they are willing to put some big raw numbers on the situation:
Premier Manmohan Singh told India’s energy firms on Monday to scour the globe for fuel supplies as he warned the country’s demand for fossil fuels was set to soar 40 percent over the next decade. The country of more than 1.1 billion people already imports nearly 80 percent of its crude oil to fuel an economy that is expected to grow 8.5 percent this year and at least nine percent next year. Demand for hydrocarbons — petroleum, coal, natural gas — “over the next 10 years will increase by over 40 percent,” Singh told an energy conference in New Delhi.
Question: Is it energy that India needs? Or is it food? This is, of course, roughly the same question. As we look at the chart below, showing the decline of arable land in India from 1961 – 2007, let’s consider that India’s population rose from 444 million to 1.124 billion in the same time period.
Arable land in India has been cut in half over the past 45 years, declining from 0.35 hectares per person to the current 0.14 hectares per person. Cornucopians will protest. They’ll say global productivity of agriculture has soared over the past 50 years, and they would be correct in making such a claim. But the question is: how was that advance actually achieved?
Primarily through fossil fuels, of course. Which gets us back to Premier Singh’s clarion call. With its population having nearly tripled in 50 years, and its arable land cut in half, India is going to have to become much more productive on its remaining land. To do so, it will need to significantly increase its use of fertilizer that either comes straight from the ground, like Potash, or through manufacturing–which requires natural gas. This does not even address India’s growing water problem.
Or, that like many other Asian and Middle Eastern countries, India too has gone abroad in search of farmland. | see: FarmLandGrab.org for both a running tally and newsflow on this global mega-trend
India is joining US in stifling Iran trade, according to a WSJ report today:
The Reserve Bank of India instructed the country's lenders Monday to stop processing current-account transactions with Iran using the ACU. Last Friday, the central bank said Indian firms can't use the ACU mechanism when making payments for the import of oil or gas. While the earlier order didn't explicitly mention Iran, the Islamic republic is the only major crude exporter in the ACU.
Iran has ramped up its use of the clearinghouse by more than 50% this year compared to last year, after it advertised the clearinghouse to Iranian and Indian firms in early 2009 as a way to avoid having to use dollars for their transactions and thus "sidestep the U.S. banking system altogether."
The U.S. Treasury has regularly raised the issue with India for more than a year, according to officials briefed on the exchanges. Those conversations accelerated after President Barack Obama's visit to India in early November, when he endorsed India's bid to become a veto-wielding member of the U.N. Security Council and join the Nuclear Suppliers Group, the informal body that controls the trade in nuclear technologies.
The U.S. has been pushing allies to tighten the squeeze on Iran, whose nuclear program has aroused international fears. The U.N., the U.S. and the European Union began enacting new sanctions on Tehran in June. U.S. and European officials have said in recent weeks that they believe sanctions are exacting a growing toll on Iran. The Iranian currency dropped nearly 10% in October, as Iranian traders scrambled to obtain dollars. Iran's largest shipping company defaulted on over $500 million in debt in recent months as international insurers have refused to underwrite their cargoes.
Still, the long-term impact of the latest step by India and other recent sanctions remains unclear.
Pakistan plans to add ten new nuclear power plants by 2030, according to a Dawn report:
KARACHI: Ten nuclear power plants will be established in the country by 2030 to help resolve the worsening electricity crisis, said Pakistan Atomic Energy Commission (PAEC) Chairman Dr Ansar Parvez on Tuesday.
He added that the government had assigned to the PAEC a target of generating around 8,800 megawatts by 2030. “We are optimistic about achieving this target within the stipulated period as all the requisite projects and plans are in place for this purpose,” he said.
Dr Parvez expressed these view while speaking as a chief guest at the 11th annual convocation-2011 of the Karachi Institute of Power Engineering in the vicinity of the Karachi Nuclear Power Plant.
He said that the PAEC was striving hard to enhance its role in power generation, while in the area of defence, “we are following a well-defined path that ensures that the country has a strategic capacity which is strong enough to deter and frustrate the evil designs of anyone”. He added that an immense contribution had been made by the graduates of Pakistan Institute of Engineering and Applied Sciences (PIEAS) and Karachi Institute of Power Engineering (KINPOE) to the country’s strategic programme.
In addition to the defence and power sectors, the PAEC had also been contributing to the socio-economic sector, he said. It had 14 medical centres in different cities and four more were being built. “Similarly, our agricultural centres and bio-technology institutes are also making a contribution towards the agriculture sector,” he added.
Dr Parvez, who is also the chairman of the board of governors of the PIEAS, later conferred MSc degrees in nuclear power engineering on 49 graduates along with medal and merit certificates to the position holders. He congratulated all graduating students and hoped that they would play their due role in the country’s development.
Earlier, PIEAS Rector Dr Mohammad Aslam said that the degree-awarding institute being run by the PAEC offered masters and PhD programmes in nuclear power engineering, material engineering, health physics and information technology. He said around 10 students were completing their PhD every year from the institute.
KINPOE Director Najmus Saqib traced the genesis of the institute which started as the Karachi Nuclear Power Training Centre in the early 80s and was upgraded to the masters level in 1993. He said this was KINPOE’s first convocation after its affiliation with the PIEAS.—APP/PPI
Here's a report in The News on how Pakistan's Engro company sees the economy:
KARACHI: Engro Corporation remains unsure about Pakistan’s economic trajectory as the country battles militants and tries to contain a growing fiscal deficit, a top company official said on Tuesday.
“Nobody knows what will happen in the coming months,” said Ruhail Mohammad, Engro’s Chief Financial Officer. “I have my numbers worked out. I know where sales and profit will be. But things are changing so fast that being sure remains almost impossible.”
Political and economic events of the past six months that saw the government retreating on key reforms such as raising taxes and cutting borrowing from the central bank have left businesses without a firm outlook, he said.
Although Engro posted a 79 percent rise in yearly profit to Rs6.8 billion in 2010, it continues to face problems, he said. “The policy of gas curtailment to fertiliser-makers is unjustified. The government has given us a commitment for uninterrupted supply, especially for the new plant.”
Expansion of Engro’s flagship fertiliser plant completed last year. The corporation can now produce 2.3 million tons of urea annually.
Mohammad, who was briefing journalists a day after the announcement of corporation’s financial results, said that Engro has no problem with increase in the price of gas that is used for making fertilisers. “The government must increase the price of fertiliser. We have been saying it for the last two years,” he said. “The agricultural products such as cotton, rice and wheat have seen a substantial increase in price. Farmers have the capacity to absorb rise in cost of urea.”
He, however, said that contractual obligations must not be breached once it comes to the additional capacity of 1.3 million tons, which the corporation has recently added. “For this project, we were offered gas at concessional rates for making the investment.”
The price of feedstock gas, which is used for making fertiliser, is subsidised by the government through a controversial method of making textile and other industries pay a higher price for the fuel. This has been a bone of contention for years.
“The government will be giving Rs37 billion in subsidy on urea in 2011,” he said. “There is no justification for this at all.”
On the other hand, curtailment of gas, which is basically a raw material for fertiliser, brings down production and leaves the manufacturers with no option but to raise prices to make up for the lost sales, he said.
He said the corporation plans to list Engro Foods, Engro Energy and Fertilisers at the stock exchange this year.
Mohammad said that work on Engro Energy’s venture into mining of coal at Tharparkar, Sindh, for power generation continues. “China is showing a lot of interest in the project. Financing won’t be an issue.”
The corporation will need between $300 million and $350 million for the Thar project by the end of 2012, he said.
“We have been cited as a heavily indebted group but if you look at the books closely we generate Rs35 cash for every Rs100 of debt. I think that gives us a lot of room to easily pay off the loans.”
Here's a Feb 2011 report on "Iran gas pipeline to Pakistan on hold"
by Robert M Cutler in Asia Times:
MONTREAL - The bilateral Iran-Pakistan gas pipeline project is now officially suspended, as the IRIB (Islamic Republic of Iran Broadcasting) website on Sunday quoted Ali Reza Gharibi, the Iran Gas Engineering and Development Company's managing director, as saying that "construction of the ... gas pipeline for export of natural gas from Iran to Pakistan will continue as of next spring", without giving a reason for the suspension.
Events, or their absence, have confirmed the skepticism that in some quarters met rumors of the deal even before the signature of the inter-governmental agreement last May on the basis of an
Iran gas pipeline to Pakistan on hold
By Robert M Cutler
MONTREAL - The bilateral Iran-Pakistan gas pipeline project is now officially suspended, as the IRIB (Islamic Republic of Iran Broadcasting) website on Sunday quoted Ali Reza Gharibi, the Iran Gas Engineering and Development Company's managing director, as saying that "construction of the ... gas pipeline for export of natural gas from Iran to Pakistan will continue as of next spring", without giving a reason for the suspension.
---------
The US-Indian civilian nuclear accord of 2008 is often considered as the carrot that finally tempted New Delhi to cancel its interest in the IPI pipeline, but this interpretation glosses over Iran's severe bargaining maladroitness, which took its toll. The Indian negotiators got tired of Teheran's representatives trying continually to reopen closed chapters of negotiation, insisting on providing a low-quality rather than a high-quality product, and proposing to charge liquefied natural gas prices for gas delivered overland.
The Iran-Pakistan pipeline, supplied by gas from the South Pars field, is planned to begin in Iran's Assalouyeh Energy Zone in the south and run over 1,100 kilometers before crossing the border with Pakistan. Initial capacity is said to be 22 billion cubic meters per year (bcm/y) with a possible final-stage volume of 55 bcm/y.
However, this seems unrealistic in any definite future, as recent statements by Iranian officials involved in the project have made clear that the "final-stage" volume would be achieved only by Pakistan's laying a pipeline inside Iran parallel to the one whose construction has just been suspended.
The tenuous nature of the project's planning is further indicated by the fact that, although Iran says that it has already completed construction of much of the pipeline on its own territory, even the approximate route of the pipeline through Pakistan remains in doubt. Inside Pakistan, it is planned that the pipeline would transit Balochistan and Sindh, but officials there candidly state that the route could change if China's general expressions of interest take more definite shape.
So it is still not certain where the gas will go if it ever gets from Iran into Pakistan. One strong possibility for a long time was that it would go to Pakistan's port at Gwadar in the country's southwest Balochistan, for liquefaction and transport by sea to China. That port opened a little over two years ago following a massive Chinese contribution of both capital and labor to its construction.
----------
Pakistan's Chashma nuclear plant unit#2 is now online, according to SANA news:
ISLAMABAD, (SANA): Chashma Nuclear Power Plant Two (CHASNUPP-II) has started power generation on trial basis.
The work on 325-MW power plant was initiated in April 2005 and has been completed ahead of schedule with the cooperation of China.
According to official sources, the plant would formally be inaugurated soon with the addition of 300-MW electricity to the national grid would help meet power shortage and increase economic activity in the country.
China has offered to invest about $15 billion in Pakistan’s energy sector projects, according to Dawn News:
A Chinese delegation led by Cao Guanging, chairman of the state-owned China Three Gorges Project Corporation (CTGPC), discussed the Kohala, Bunji, Bhasha, Dashu and other hydropower projects in the upper and lower Indus valley during a meeting with Finance Minister Dr Abdul Hafeez Shaikh on Wednesday.
Dr Hafeez welcomed the offer and said he would try to develop consensus on issues relating to the projects. He said he would consult with the ministries of water and power and law and justice to sort out legal and other issues.
He informed the delegation about the country’s bidding rules and laws and assured it that the bidding process would be held in a transparent manner.
He said the Chinese offer had been discussed at a recent meeting of the Economic Coordination Committee of the cabinet. He said the projects identified by the CTGPC would be taken up with it but only after the completion of procedural matters.
The Chinese offer to provide financial and technical assistance for hydel and wind power projects, upgrade the transmission system and provide an integrated solution to the problems of power shortage and disruptions was elaborated by the CTGPC delegation at the Aiwan-i-Sadr on Wednesday.
Presidential spokesman Farhatullah Babar said in a statement that President Asif Ali Zardari had advised the government to consider tasking the CTGPC with building a run-of-the-river hydro project at Sukkur Barrage and asked Water and Power Minister Syed Naveed Qamar to discuss the project with the sections concerned and prepare a proposal in two months.
The president said that agreements with China ensured full security of Chinese investments in Pakistan. He said the true potential of business partnership between entrepreneurs of the two countries had yet to be fully realised.
Mr Babar said the CTGPC was already involved in a number power projects in the country and offered to build more to address the problems of power shortage. He said the corporation was currently undertaking Karot, Taunsa, Kohala and Bunji hydro-electric power projects. A letter of intent for the 720MW Karot project has been issued after the approval of its feasibility study. The project is currently at the tariff petition stage.
A memorandum of understanding for the 120MW Taunsa hydro-eclectic project has been signed and a development agreement will be signed this month. Mr Babar said the 1,100MW Kohala project was ready for tariff negotiations. A letter of intent for the project has already been issued after the approval of its updated feasibility study.
The 7,100MW Bunji project is ready for site survey. The MoU for the project was signed in August 2009.
Mr Babar said that wind power projects, including Sindh’s first and second wind farms and Punjab’s wind and solar projects, were also in an advanced stage.
Pakistan's president has finally realized and stated that US presence in Afghanistan is destabilizing Pakistan in an interview with the the Guardian newspaper:
"Just as the Mexican drug war on US borders makes a difference to Texas and American society, we are talking about a war on our border which is obviously having a huge effect. Only today a suicide bomber has attacked a police compound in Baluchistan. I think it [the Afghan war] has an effect on the entire region, and specially our country," Zardari said.
Asked about harsh criticism of Pakistan's co-operation in the "war on terror" published in a White House report last week, Zardari said Pakistan always listened to Washington's views. But he suggested some members of Congress and the US media did not know what they were talking about when it came to Pakistan.
"The United States has been an ally of Pakistan for the last 60 years. We respect and appreciate their political system. So every time a new parliament comes in, new boys come in, new representatives come in, it takes them time to understand the international situation. Not Obama, but the Congress, interest groups and the media get affected by 'deadline-itis' [over ending the Afghan war]," Zardari said.
"I think it is maybe 12 years since America has become engaged in Afghanistan and obviously everybody's patience is on edge, especially the American public, which is looking for answers. There are no short-term answers and it is very difficult to make the American taxpayer understand."
-------
"Our emphasis has been on security rather than our commerce and we need commerce for our survival.
"We have all the gas in the world waiting to go through to markets in India and the Red Sea but it cannot be brought in until Afghanistan is settled. So Afghanistan is a growth issue for us. I think most of the time, the quantification of the effect of the war is not calculated [by the US].
------
According to senior intelligence officials, the "war on terror" has cost the Pakistani economy approximately $68bn (£42bn) since 2001.
More than 33,300 Pakistani civilians and military personnel have been killed or seriously injured. Last year's record-breaking floods added to the strain on the economy.
Zardari said the security situation was also undercutting efforts to strengthen democratic institutions bypassed or overturned during the military rule of his predecessor, General Pervez Musharraf. "Democracy is evolving. It's a new democracy. It takes time to bring institutions back. Destroying institutions during a decade of dictatorial regime is easy ... So there is a political impact as well as an economic impact."
Pakistani officials say relations with the US reached a "low ebb" following the recent row over Raymond Davis, a CIA contractor who shot dead two Pakistanis; a CIA drone attack in Pakistan's tribal areas last month that accidentally killed dozens of civilian elders meeting in a jirga (council), and Pakistan's suspicions that it is being excluded from discussions about an Afghan peace deal.
Zardari, who is expected to visit Washington next month, said he would ask Obama to share drone technology with Pakistan so future attacks could be planned and directed under a "Pakistani flag". Although this request had been turned down in the past, he said he was hopeful the Americans would be more receptive this time, given the huge anger and rising anti-American feeling that the drone attacks were causing.
Zardari and other senior government officials said all parties felt a sense of growing urgency about forging an inclusive peace settlement in Afghanistan, but the process must be "Afghan-led". Pakistan was ready to play its part, consistent with its national interest, they said.
..
Pakistan's prime minister set up an energy council to tackle the current energy crisis, according to Radio Pakistan:
.. He said a team effort was required for a mutually rewarding and strategic partnership between the government and the energy sector as he firmly believed that the industry was capable of turning the tide and delivering results.
--------
The Prime Minister said “Fuelling the Future” therefore requires finding new oil and gas reserves through aggressive exploration activities, optimizing production from existing fields by applying cutting-edge technology, enabling gas imports from across the borders via regional pipelines and LNG shipments.
He said the Government was encouraging foreign investments in energy infrastructure development and in a broader context, development of alternate sources of energy and energy conservation, for a sustainable energy supply.
He said Pakistan was an energy-deficit country, meeting nearly 90% of its oil requirement through imports.
--------
He said the government was struggling to keep up with an increasing energy import bill which has adversely affected country’s trade deficit and pointed that it was difficult for the government to pass on the full impact of the rising international oil prices to the people.
----------
He said development of local energy sources, including hydel projects and the Thar coal-fields, also remains a high priority for this government.
He said the government has already added 1700 MW in the national electricity grid during last three years and many more power projects were at various stages of development.
“We have even resolved the basic problem which had held us back in utilizing the vast coal reserves in Sindh for producing energy,” he said.
----
He said the share of natural gas as one of the primary energy source has increased from 40 percent in 1999 to 60 percent in 2010 and currently the entire domestic natural gas production was being consumed while providing for approximately 50 percent of total energy requirements.
The Prime Minister said holding of the international event being clearly indicated the priority accorded to highlighting the country’s energy issues by the Petroleum Institute being the representative body of the most important public and private sector companies in the oil & gas sectors of the country.
He said Pakistan today faced a number of challenges including security issues arising from its fight against terrorism and a growing trade deficit as a result of rising energy prices globally.
The Prime Minister said though the challenges have caused financial constraints in the country, the government was however determined to face these in the same way as was being done in the political arena.
--------
He said the Energy Conference that will have working sessions on oil & gas exploration & production, LNG imports, development of Thar coal-fields, power sector progress, oil infrastructure development and safety recommendations for the energy sector.
----------
The event also saw the formal launch of the 2011 Pakistan Energy Outlook Document.
The conference while noting the almost 80 per cent growth in Pakistan’s energy requirement in the past 15 years from 34 million tons oil equivalent (TOE) in 1994-95 to 61 million TOE in 2009-10 would deliberate on ways to find a way out to find cost effective solutions.
The country’s energy supply currently comes primarily from indigenous natural gas which is 45% of the energy mix and oil imports at 35% of the energy mix, with the balance from hydel at 12%, coal at 6% and nuclear at 2% of the mix respectively.
Chief Executive Officer of Petroleum Institute of Pakistan (PIP) Saleem Piracha presented an overview of the Pakistan Energy Vision 2011-2026, while Chairman PIP Zaiviji Ismail, Country chairman of Shell Pakistan spoke about the energy need, demand and the measures being taken to meet the shortfall.
Here are some excepts from BBC's Soutik Biswas on anti-nuke protests at Jaitapur in India:
...By all accounts, the violence was allegedly instigated by a right-wing regional party which is struggling to regain lost political ground in the Konkan coastal area where Jaitapur is located. The upshot of such cynical politics: one 'protestor' dead when police fired on irate villagers, at least 20 wounded, a hospital damaged and passenger buses gutted by the mob.
---------
This is tragic because there are much more significant and vexing issues at stake in Jaitapur. After the disastrous tsunami-induced meltdown in Fukushima, Japan, should India reconsider its push towards nuclear energy? (With the landmark nuclear deal with the US under its belt, India can now import reactors and nuclear fuel.) Will acquiring large tracts of land for nuclear power stations again set the government on a collision course with sections of the unwilling - and sometimes uninformed - farmers?
-------
Critics like Praful Bidwai believe that India's nuclear energy drive will sound the death knell of precious ecosystems - six 1,650 megawatt reactors will be built at Jaitapur on the west coast, it is planned, in what would turn out to be the world's largest 'nuclear park'. They say the government has forcibly acquired farmland using a colonial law to build the plant. Mr Bidwai, who visited Jaitapur, writes that the nuclear plant will be situated on fertile farmland, not barren wastelands as the government would have people believe. Then there is the threat the plant poses to thriving fisheries. Officials say no local will be displaced from his land, although more than 2,000 people have had to sell parts of their land. So are the protests about better compensation for land, and guarantees about safety?
Most scientists I spoke to dismiss a lot of what the campaigners say, insisting that nuclear power is really the only option India is left with to meet its growing energy needs. An astonishing 400 million Indians continue to live in the dark, without electricity. "You have to choose the lesser evil - more carbon dioxide or the threat of radiation," one told me. Smoke-belching thermal power plants use the atmosphere as a "sewer" and impact climate change. Solar and wind energy cannot meet India's energy demands, they say. Ergo, nuclear power, they say, is the only sensible and clean option. That is why India is planning to set up some 30 reactors over as many years and get a quarter of its electricity from nuclear energy by 2050.
Scientists agree the government has to tread carefully in building consensus at the grassroots and while acquiring farmland to set up the nuclear plants - there is no room for forcible acquisition of land at unremunerative prices.
Then there is this shrill debate over the safety of the plant. Critics point out that the French-built reactor meant for Jaitapur has still not been approved by nuclear regulators worldwide. They say that the site is seismically hazardous - the area was apparently hit by 95 earthquakes between 1985 and 2005 - and since it will be built on the coast will be prone to tsunamis.
Scientists dismiss these arguments as naive and ill-informed. India, they say, will not buy these third generation reactors until international and local regulators clear them. India's nuclear regulators say that Jaitapur is in a "significantly low seismic zone" compared with Japan and Fukushima. Also, the reactors will be built on a cliff 82ft (25m) above the mean sea level. With its 20 reactors, India, scientists insist, has a good safety record. (There was a turbine room fire at a plant in 1993, and a sodium leak in another in 2000). "There have been no serious incidents. There has been no radiation leak. Our record is clean," one official said....
Here's Business Monitor International (BMI) 2011 report on power sector in Pakistan:
The new Pakistan Power Report forecasts Pakistan will account for 1.12% of Asia Pacific regional power generation by 2015, with the chance of possible generation surplus if investment rises and the country’s substantial transmission losses can be brought under control. BMI’s Asia Pacific power generation assumption for 2010 is 7,761 terawatt hours (TWh), representing an increase of 5.1% over the previous year. We are forecasting a rise in regional generation to 9,901TWh by 2015, representing growth of 21.2% in 2011-2015.
In 2010, Asia Pacific thermal power generation totalled an estimated 6,187TWh, accounting for 79.7% of the total electricity supplied in the region. Our forecast for 2015 is 7,704TWh, implying 18.6% growth that reduces the market share of thermal generation to 77.8%. This is thanks largely to environmental concerns promoting renewable sources, hydro-electricity and nuclear generation. Pakistan’s thermal generation in 2010 was an estimated 64.2TWh, or 1.04% of the regional total. By 2015, the country is expected to account for 0.83% of regional thermal generation.
Gas is the dominant fuel in Pakistan, accounting for an estimated 50.9% of primary energy demand (PED) in 2010, followed by oil at 31.0%, hydro-electric energy at 9.6% and coal with a 6.9% share. Regional energy demand is forecast to reach 5,508mn tonnes of oil equivalent (toe) by 2015, representing 20.0% growth from the estimated 2011 level. Pakistan’s estimated 2010 market share of 1.54% is set to ease to 1.51% by 2015. Pakistan’s estimated 2.9TWh of nuclear demand in 2010 is forecast to reach 7.0TWh by 2015, with its share of the Asia Pacific nuclear market rising from an estimated 0.53% to 0.90% over the period.
Pakistan now shares eighth place with Malaysia in BMI’s updated Power Business Environment Ratings, thanks to its relatively high level of renewables (mostly hydro) usage and healthy energy demand growth prospects. Several country risk factors offset the industry strength, but the country is in a good position to keep clear of the Philippines below.
BMI now forecasts Pakistan real GDP growth averaging 3% a year between 2011 and 2015, with the 2011 growth assumption being 1.5%. The population is expected to expand from 173mn to 194mn, with GDP per capita increasing by 24% and electricity consumption per capita rising by 5%. Power consumption is expected to increase from an estimated 75TWh in 2010 to 87TWh by the end of the forecast period. After power industry usage and transmission losses, there is scope for a supply surplus by 2015 of around 4TWh, assuming 2.9% average annual growth in electricity generation during 2011-2015.
Between 2010 and 2020, we are forecasting an increase in Pakistani electricity generation of 32.3%, which is below average for the Asia Pacific region. This equates to 15.3% in the 2015-2020 period, up from 14.8% in 2011-2015. PED growth is set to increase from 20.5% in 2011-2015 to 22.4%, representing 47.4% for the entire forecast period. An increase of 50% in hydro-power use during 2011- 2020 is a key element of generation growth. Thermal power generation is forecast to rise by just 8% between 2011 and 2020, with nuclear usage up 314% from a low base. More details of the long-term BMI power forecasts can be found at the end of this report.
Express Tribune reports easing of circular debt in Pakistan:
The government has paid Rs120 billion overdue electricity subsidies to improve the financial condition of power companies, leaving it with the option of either letting the budget deficit slip to 6.3 per cent or playing with the figures to restrict it to 5.5 per cent.
The payments would partially improve the balance sheet of the power sector that has been crippled by the government’s inability to pay price differential claims. The arrears that have increased to Rs288 billion are one of the main reasons for the massive power shortfall, recorded at 7,200 megawatts on Tuesday, as companies are not running at optimum capacity. The capital injection will enable power companies to purchase fuel for electricity generation.
The payments have been made to the Pakistan Electric Power Company (Pepco), Pakistan State Oil, oil refineries, power generation and distribution companies. However, these will widen the budget deficit by another 0.7 per cent of national income, torpedoing the revised fiscal framework.
The government that has been struggling to restrict the budget deficit to Rs941 billion or 5.5 per cent of Gross Domestic Product (GDP) is now facing a situation whereby the gap may swell to Rs1,078 billion or 6.3 per cent.
Finance ministry officials said so far the ministry was reluctant to pay its dues because of the negative implication for the budget deficit – the gap between national income and spending. Officials added that the government paid Rs98 billion on Wednesday while the remaining Rs22 billion would be released today (Thursday).
Sources said the finance ministry was considering deferring payment of other subsidies like those for agriculture and fertilisers to the next financial year. There is an option to even defer some of the electricity subsidies of this fiscal year.
Any attempt to play with the figures may invite the International Monetary Fund’s wrath that in the past slapped penalties after noting tempering with budget figures.
According to the Budget Strategy Paper 2011-12, the government will pay Rs186 billion electricity subsidies by June-end. The accumulative power subsidy for this year and the previous two years amounts to Rs306 billion. The finance secretary was not available to comment on the issue.
The circular debt still stands at Rs168 billion even after Rs120 billion payments. The major factor for the debt now is the refusal of provinces to pay their dues to Pepco. The four provinces, Fata and AJK owe Rs106 billion to Pepco, according to official documents. Of this amount, a major chunk of Rs76 billion is due to be paid by the provinces. Punjab owes Rs9 billion whereas Sindh owes Rs37 billion.
The ongoing massive power shortage is partly because of oil and gas shortages and partly because of inefficient power plants. Although the government has paid a handsome amount, there is still a big question mark on the sustainability of the power sector due to resistance to reforms. The government is not ready to completely disband Pepco and it is also not amending the National Electric Power Regulatory Authority Act that is necessary to ensure full power tariff recovery.
Karachi Electric Supply Company’s (KESC) tariff structure is another source of concern. This year alone, the federal government will pay Rs40 billion subsidies to KESC on account of price differential.
The other major factor is longstanding receivables from private consumers. All the distribution companies are unable to recover Rs69.7 billion from private consumers which are overdue from two months to three years, according to the documents.
Pakistan Petroleum is seeking tenders to develop oil and gas resources in Pakistan, according to Oil Voice:
Exploration in these licenses is expected to convert conventional and unconventional hydrocarbon resources in to reserves. There are stratigraphic traps, tight gas, shale gas etc.
----------
Dera Ismail Khan Block Overview:
The block lies in the Suleiman Foredeep with Sargodha High in the East, Khishor & Marwat Ranges in the North, Suleiman Foldbelt in the West and the Zindapir anticlinorium in the South. The development of Suleiman Foredeep is related with an uplift of the Suleiman Range, which is believed to be related to early and late Tertiary inversion of extensional and trans-tensional basins along the northwest margins of the Indian continental plate.
-------------
The block contains the stratigraphic play at Eocene and Paleocene levels. The Sembar Formation (Cretaceous) is the proven source rock in the nearby Dhodak & Salsabil Gas Fields, which lies in the Gas window in the West of D. I. Khan block. The primary reservoir targets are the Stratigraphic pinch out of Habib Rahi Limestone (Eocene) and the truncations of Lower Ranikot Formation (Paleocene). The Secondary target is the Pab Sandstone (Cretaceous). The seal is comprised of Intra Eocene Shales and the Shales of Chitarwata Formation (Oligocene) above the Base Oligocene unconformity. The Lower Ranikot and Pab Sandstone are the proven Gas/Condensate reservoir in the Dhodak and Salsabil Gas Fields.
The Kamiab-1 well (Amoco, 1974) drilled in the East encountered the significant Gas shows in the Lower Ranikot Formation.
--------
Sirani Block Overview:
The Sembar Formation (Lower-Cretaceous) is the proven source rock in the area. Sands of Lower Goru Formation (Lower Cretaceous) are producing in nearby fields and have good reservoir quality. Shales of Upper Goru & intraformational shales provide the seal. Tilted Faults Blocks are expected in the Block.
• Four leads identified on vintage seismic data. New seismic likely to yield more leads
• Proximity to the producing Badin Oil fields to the west
• Possibility of finding additional leads in southern marshy area where no seismic data has been acquired. Good shows encountered in some wells in the block
• Nearby existing infrastructure
• Low cost drilling operations as minimum problems are expected.
• Early production through Extended Well Testing (EWT)
Naushahro Firoz Block Overview:
The Naushahro Firoz block lies in a zone with a proven petroleum system from different reservoirs. The Zamzama gas condensate discovery (2.3 Tcf and 12 MMbo)) from Late Cretaceous Pab sandstone lies to the west and Sawan gas discovery (1.5 Tcf) from Lower Cretaceous Lower Goru sandstone lies to the East of the block. Sui Main Limestone (SML) of Eocene age is a proven reservoir in a number of discoveries (over 2 Tcf reserves) located in the north of the block. The reservoir quality of SML is also proven by the Sagyun-01 well drilled in the block and wells drilled in the surrounding area. One lead and a possibility of another lead identified at SML level on sparse vintage data.
-----------
Jungshahi Block Overview:
The Jungshahi block lies to the east of two gas discoveries. An untested surface lead is separated from a gas field by a broad syncline. The Block is close to the Kitchen area. Untested surface anticlines are present in the block. Proven reservoir rocks of Paleocene and Cretaceous are present. Significant gas shows have been observed in Lower and Upper Ranikot formations in the wells drilled in the block. The Block is located close to an existing gas pipeline / infrastructure and commercial hub at Karachi. Early production is expected through EWT.
Pakistan improves incentives in new tight gas exploration policy, according to platts.com:
Pakistan has approved a new tight gas exploration policy with improved incentives as compared with its 2009 policy, to overcome the country's gas shortfall and attract foreign investment, a petroleum ministry official said Wednesday.
Under the new policy, exploration companies will be offered 40-50% higher prices for the gas compared with the $4.26/Btu price announced in Exploration and Production Policy 2009.
Companies which succeed in recovering gas from tight fields within two years will get 50% hike over the 2009 price and if it takes more time they will get only a 40% hike on the 2009 price.
Besides, the leases for the fields will now be for 40 years instead of 30 in the 2009 policy, the official said.
Even with the improved prices for the tight gas to be paid to the exploration companies, it is estimated that Pakistan will have to pay a maximum of $6.5/Btu for the gas compared with $12.3/Btu for gas imports.
"It [tight gas] is a more feasible option for the economy as even after giving additional incentives the cost of gas available will be less than imported gas and there will be no burden on the foreign exchange reserves for additional imports," Umer Bin Ayaz, a research analyst at JS Global Equities in Karachi, said.
Tight gas is typically stuck in very tight formations underground -- trapped in hard rock or in a sandstone or limestone formations that are unusually impermeable and non-porous.
As exploration is more difficult and the technology required more expensive, companies do not typically go in for exploration until given attractive incentives.
The country's supreme decision-making body, the Council of Common Interest, chaired by Prime Minister Yousuf Raza Gillani Tuesday evening approved tight gas policy, a government statement said.
The country had a potential 40 trillion cubic feet of tight gas. Separately, Pakistan's current recoverable gas reserves stand at around 27 Tcf.
Pakistan now faces a gas shortfall of 1-1.2 Bcf/day.
Meanwhile, the government is working on plans to import 3.5 million mt/year of LNG to tackle its energy crisis.
Here's a NY Times story on dysfunction in Gurgaon, India:
Gurgaon, located about 15 miles south of the national capital, New Delhi, would seem to have everything, except consider what it does not have: a functioning citywide sewer or drainage system; reliable electricity or water; and public sidewalks, adequate parking, decent roads or any citywide system of public transportation. Garbage is still regularly tossed in empty lots by the side of the road.
With its shiny buildings and galloping economy, Gurgaon is often portrayed as a symbol of a rising “new” India, yet it also represents a riddle at the heart of India’s rapid growth: how can a new city become an international economic engine without basic public services? How can a huge country flirt with double-digit growth despite widespread corruption, inefficiency and governmental dysfunction?
In Gurgaon and elsewhere in India, the answer is that growth usually occurs despite the government rather than because of it. India and China are often considered to be the world’s rising economic powers, yet if China’s growth has been led by the state, India’s growth is often impeded by the state. China’s authoritarian leaders have built world-class infrastructure; India’s infrastructure and bureaucracy are both considered woefully outdated.
Yet over the past decade, India has emerged as one of the world’s most important new engines of growth, despite itself. Even now, with its economy feeling the pressure from global inflation and higher interest rates, some economists predict that India will become the world’s third largest economy within 15 years and could much sooner supplant China as the fastest-growing major economy.
Moreover, India’s unorthodox path illustrates, on a grand scale, the struggles of many smaller developing countries to deliver growth despite weak, ineffective governments. Many have tried to emulate China’s top-down economic model, but most are stuck with the Indian reality. In India, Gurgaon epitomizes that reality, managing to be both a complete mess and an economic powerhouse, a microcosm of Indian dynamism and dysfunction.
In Gurgaon, economic growth is often the product of a private sector improvising to overcome the inadequacies of the government.
To compensate for electricity blackouts, Gurgaon’s companies and real estate developers operate massive diesel generators capable of powering small towns. No water? Drill private borewells. No public transportation? Companies employ hundreds of private buses and taxis. Worried about crime? Gurgaon has almost four times as many private security guards as police officers.
“You could call it the United States of Gurgaon,” said Sanjay Kaul, an activist critical of the city’s lack of planning who argues that Gurgaon is a patchwork of private islands more than an interconnected city. “You are on your own.”
Gurgaon is an extreme example, but it is not an exception. In Bangalore, outsourcing companies like Infosys and Wipro transport workers with fleets of buses and use their own power generators to compensate for the weak local infrastructure. Many apartment buildings in Mumbai, the nation’s financial hub, rely on private water tankers. And more than half of urban Indian families pay to send their children to private schools rather than the free government schools, where teachers often do not show up for work.
http://www.nytimes.com/2011/06/09/world/asia/09gurgaon.html?_r=1&scp=1&sq=gurgaon&st=cse
World Bank commits to helping Pakistan build energy projects, according to APP:
ISLAMABAD, Jun 10 (APP): The World Bank (WB) has assured to consider financial assistance for more mega hydro electric and wind power projects in Pakistan and to continue its assistance for ongoing water and power sector projects.Country Director World Bank in Pakistan, Rachid Benmessaoud along with a four- member delegation called on the Minister for Water and Power, Syed Naveed Qamar here on Friday.Mr. Benmessaoud said that the WB is already providing financial assistance for electricity distribution and transmission improvement project (EDTIP) which is likely to be completed within the prescribed time frame.
This will improve the transmission and distribution network in the country by replacing the existing infrastructure. Allocated funds of US$ 15.6 million for technical assistance of institutional strengthening and capacity building of power distribution companies.
A pilot project for installation of advance metering infrastructure (Smart meters) is also being funded by WB, adding that Terbela extension IV project has also signed with WAPDA which will generate additional 300 MW and completed within three years.
The Bank also fully supports the power sector reforms, he said and assured that the bank will take up more hydel and wind power projects for assistance to resolve the energy crisis,he added.
The Minister for Water and Power, Syed Naveed Qamar offered various mega projects for assistance and said that the WB support is very important for the power sector.
He said that the government is taking all possible measures to resolve the energy crisis. Recoveries are being improved, zero tolerance policy for defaulters, rehabilitation of Gencos, upfront tariff for wind power, power sector reforms are underway and operation and maintenance of Gencos through private sector.
He said that more than 2000 MW has been added in the national grid. Work on various hydro and water sector projects have started, he observed.
The Minister asked the PEPCO to immediately complete the procedure for hiring international procurement adviser and smart metering project so that the disbursement could be started at the earliest.
Here's an International Power announcement of Uch II power plant in Pakistan:
(London – 21 January 2011) International Power plc is pleased to announce that it has signed the financing to develop Uch II, a 375MW CCGT extension to the existing 572MW Uch plant in Pakistan. Uch II will be 100% owned by International Power.
Philip Cox, CEO of International Power, said, "Uch II represents an excellent opportunity for International Power to add new capacity adjacent to our existing Uch site and help tackle the issue of power shortages in the country. A key attraction of this investment is that it will also use domestic gas to produce competitively priced power."
The total project cost is estimated at US$480 million (£300 million), which will be funded by debt and equity in a 75:25 ratio. International Power’s equity investment of US$120 million (£75 million) will be funded from current liquid resources. The US$360 million (£225 million) of debt will be provided by multilateral and bilateral agencies that include the Asian Development Bank, International Finance Corporation, Korean EXIM and the Islamic Development Bank.
The electricity generated from Uch II will be sold through a 25-year US$ indexed power purchase agreement with the National Transmission and Despatch Company, which is wholly owned by the Government of Pakistan. Gas will be supplied from the existing gas field under a gas supply agreement with the Oil and Gas Development Company of Pakistan.
The Uch II project will be constructed under an EPC contract with Hyundai Engineering Company and Descon Engineering. It will comprise two GE9E gas turbines and one steam turbine. The plant is expected to be operational in 2013 and will be operated by the existing Uch facility under an Operations and Maintenance agreement.
Two new power plants add 390MW to national grid, according to The Express Tribune:
Two private sector power projects, having cumulative net capacity of 390 megawatts, have been added to the national grid in the last one month.
This was told in a meeting of the Private Power and Infrastructure Board (PPIB) held on Monday under the chairmanship of Minister for Water and Power Syed Naveed Qamar, said a press statement.
One was a gas-based independent power producer (IPP) named Fauji Daharki Power Project with a capacity of 176.6 MW and was commissioned on April 22 and the other was 213.8MW Hubco-Narowal Power Project which started commercial operations on May 16.
Participants of the meeting said that another three IPPs were in construction phase which included 209MW Bhikki Power Project, which is expected to be commissioned soon, 84MW New Bong Hydropower Project and 375MW Uch-II Power Project based on gas, expected to be completed by 2013.
Qamar said that the government believed in the policy of facilitating investors and removing hurdles in processing of projects, adding the Power Generation Policy for 2002 was being reviewed to make it more investor-friendly, in consultation with public and private sector stakeholders.
He added that in order to make electricity affordable, the concept of converting existing thermal IPPs to cheaper fuels like coal, LNG, etc was being seriously considered.
Appreciating the role of PPIB in bringing investment in the power generation sector, the minister asked PPIB to focus on the development and implementation of power projects based on water and coal for medium and long-term needs.
The European Union has signed an agreement to provide 225 million euros for development projects in Pakistan, according to The News:
The agreement was signed by the Finance Minister Dr Abdul Hafeez Shaikh and German Federal Minister for Economic Cooperation and Development Dirk Niebel and European Commissioner for Development Andris Piebalgs at the finance ministry.
The money will be spent from 2011 to 2013 on developing programmes for rural and natural resource, education and human resource, governance and trade development.
Under the arrangement, the EU has committed an annual grant of 75 million euros. Over the three-year period, 90 million euros will be spent on rural development and natural resources management, 70 million euros on education and human resource development, 50 million euros on governance and 15 million euros on trade development.
Briefing newsmen about the meeting, Shaikh appreciated the EU and Germany for their support to economic development in Pakistan.
The minister discussed the current economic situation and measures taken by the government for stabilising and increasing revenue through tax reforms.
The minister said that despite narrow fiscal space, Pakistan has not compromised on social and poverty-related spending and is pursuing a strategy to promote growth.
“As a result of the initiatives to stabilise economy, indicators have shown improvement and the economy is able enough to withstand challenges,” he added.
The minister thanked Germany for supporting Pakistan’s efforts to get access to the EU markets.
The visiting dignitaries appreciated Pakistan’s commitment for sustaining the ongoing economic reforms programme and reaffirmed their support to Pakistan in this regard.
They expressed hope that Pakistan would continue with the reform process.
Niebel said that under the recently concluded bilateral negotiations, Germany had committed additional 78 million euros for education, energy, health and governance besides assuring 12 million euros for the Multi Donor Trust Fund.
Out of the 78 million euros committed by Germany, 48.5 million euros will be spent on energy, 13 million euros on health, 9 million euros on governance, one million euros on education and 6.5 million euros outside these priority areas.
"Pakistan’s power shortage an emergency": Khaleej Times
A daily on Monday described the acute power shortage in Pakistan as an “existential emergency” as it called for establishing a national power management plan.
An editorial in the News International noted: “Our installed sources of power generation exceed our power needs and if all were working at capacity we would be a net exporter of power.”
Giving statistics, it said: “Our power shortfall has now reached 5,000 megawatts. We are generating 13,240 MWs against a peak demand of 18,065MWs.
“Industry has ground to a halt; productivity in key sectors like that of cotton goods has dropped almost to zero in places like Faisalabad, the hub of the cotton spinning industry. In Lahore loadshedding has reached 14 hours a day.”
The editorial said that the problem is affecting every province.
It went on to say that at the heart of the matter “lies the inability to resolve the circular debt crisis and an embedded inefficiency in power distribution along with power theft”.
Taking a dig at government announcements to tackle the electricity situation, the editorial said: “We have lost count of the number of prime ministerial pronouncements on the management of the power crisis, the empty plans that never seem to materialise and the grand political statements that this or that much power has been added to the system since this government took office.”
Calling it “an existential emergency”, it added that the country needs a national power management plan.
http://www.khaleejtimes.com/DisplayArticle08.asp?xfile=data/international/2011/June/international_June778.xml§ion=international
Sindh govt allocates Rs. 3.7 billion for Thar coal development in 2011-12 budget, according to Dawn:
KARACHI, June 11: Tormented by the power shortages the Sindh government focuses on developing indigenous coal reserves. In the next Annual Development Plan it has earmarked Rs3710.937 million for Thar coal project.
For energy sector a total of Rs1214.499 million has been kept in the ADP 2011-12. This include Rs1100 million for the coal gasification project.
Sindh Finance Minister Syed Murad Ali Shah while explaining salient features of the budget for 2011-12 said: “Thar coal reserves of 175 billion tons are ample for provision of cost-effective energy for centuries”.
He said that once the reserves were properly exploited they could help in generating 20,000MW by 2020.
Recently, in international competitive bidding, two Chinese companies, an Australian company, and Pakistan Petroleum Limited participated.
As a result, two Chinese companies have been selected to undertake coal exploration, power generation and establishing petro-chemical complex at two blocks of Thar.
He said the bankable feasibility study for joint venture project of the Sindh government and Engro was created to boost the potential in a record period of eight months.
The Sindh government and the federal government have included this project in the list of projects to be taken up with the Pak-China Joint Energy Working Group (JEWG) formed during the last visit of the Chinese prime minister to Pakistan, he said.
Leading Chinese companies have shown strong interest in executing this project. The mining and power generation from this project is expected in 2015-16 depending upon the financing arrangements for the project.
The test burn at Underground Coal Gasification (UCG) is expected during coming financial year. After successful testing, the project will be scaled up to produce 2x50MW electricity.
He said the government has made serious efforts to provide critical infrastructure for development of Thar coal.
A scheme for bringing water to Thar from Makhi Farash has been approved by ECNEC, feasibility studies for effluent disposal and laying of broad-gauge railway line are to be completed in June, 2011.
Work on improvement and widening of road for movement of heavy machinery from Karachi to Mithi-Islamkot is expected to start in next year.
According to rough calculations an amount of $1.20 billion is needed over a period of next five years to develop the required infrastructure for Thar.
Serious efforts are also in place to exploit the Gharo-Keti Bandar wind corridor.
During the Sindh chief minister`s recent visit to South Korea an MoU to generate 2000MW of wind energy was signed with Korea Southern Power Company.
The issue of electric power is of great priority for Sindh. The CCI has given approval to the removal of a limit on the ceiling of 50MW, which was earlier set at which provinces could construct power plants.
The Sindh government has signed a letter of intent with the Three Gorges Project Corporation, China`s premier electricity producer, to help explore the hydro power potential in Sindh.
A team from CWE, a subsidiary of the Three Gorges, recently visited Sukkur Barrage to gauge the potential for constructing a power plant.
Under the village electrification programme 446 villages were provided electricity during 2010-11, while the process for providing power to 350 more villages is underway.
Here's a Dawn report on progress of goal gasification effort in Pakistan:
KARACHI: National Assembly Standing Committee on Science and Technology has asked the federal and provincial governments to provide the allocated funds to Thar coal gasification project to speed up work on the power generation project.
Chairman of the committee Dr Abdul Kadir Khanzada, while speaking at the presentations of Thar coal and gasification projects here Saturday, said that any delay in Thar coal and gasification trial and pilot projects will further delay the addition of much needed electricity to country’s economy and industrial sector.
Representatives of Sindh Coal Authority, project coordinator Engro, Oracle Coalfield UK, PCSIR and coal gasification project gave presentations to the committee on the progress of their projects.
He said that both federal government and Sindh government should provide the committed share of the allocated funds for these projects. If you want to run the projects you need to fulfil your obligations and provide the necessary support to the on-going projects in Thar coal field.
He also asked the project runners to take media to the site to show the potential for coal gasification and power generation in Thar.
He also urged the federal Minister for Science and Technology Mir Changez Khan Jamali to provide support and funds to Pakistan Council of Industrial and Scientific Research (PCSIR) so that it can upgrade its laboratory test project of coal gasification to a pilot project and then lead to commercial production.
“You need to support them as the entire nation is now looking toward Thar coal projects as the only solution to existing power crisis”, he added.
Dr Khanzada noted that even the allocations for these projects were not sufficient.
He asked PCSIR to hold a meeting next week at its premises to demonstrate the trial production of gas and electricity based on Thar coal.
Other members of the committee Mir Changez Khan Jamali, Mrs Shamsul Sattar Bachani, Justice (rtd) Fakhar-un-Nisa Khoker, Zafar Beg Bhittani and Chaudhry Mahmood Bashir Virk in their remarks also supported the projects and urged the government to extend wholehearted support to scientists so that Thar coal can be utilized for power generation.
The Minister Mir Changez Jamali assured the NA committee for removing all the difficulties hindering the projects and said all possible support will be provided to coal gasification projects and also to power generation projects under public-private partnership.
Earlier, Specialist Science and Technology of Planning Commission, Dr M Ashraf Moten in his presentation said that coal has to be declared as a matter of national security and strategic importance to attract investment from donors and multilateral institutions.
He said that total investment requirement for 100 megawatts of electricity through underground coal gasification is $ 115.6 million and added that only 7.48 million have been received so far.
Dr Moten said that 36 holes have been drilled and stuffed through 12” and 24 “ diameters carbon steel piping and cemented and tested for gasification.
Director General PCSIR said that the conversion of coal into diesel will cost only Rs 18 to 19 per litre and cost of power generation from coal gasification will is also lower and sustainable.
http://www.dawn.com/2011/07/03/na-committee-ask-for-funds-to-coal-gasification-projects.html
Siemens Pakistan chief says 4,000MW of electricity can be produced with $1.5 billion investment that can help overcome energy crisis, according to Pakistan Today:
KARACHI - The prolonged hours of unscheduled load shedding can be brought to an end with just a small investment of $1.5 billion. “Currently, the country is facing a shortfall of 4,000MW in the production of electricity, but this can be overcome by investing only $1.5 billion, which is a small amount compared to the scale of the power crisis that has paralysed the economy and making lives miserable for the people,” Sohail Wajahat H Siddiqui, managing director/CEO of Siemens Pakistan and a member of the Pakistan Business Council (PBC), told Pakistan Today.
The PBC is a body of the elite business groups in the country that holds interactions with government officials, including the president and the prime minister, to find out ways and means to overcome the energy and economy crises and to put the economy on the path of stability. Siddiqui said that under the short-term strategy, an investment of $1.5 billion is required to produce 4,000MW of electricity that would end the shortfall in production and demand.
“I’ve have submitted a comprehensive report to the government from the platform of the Pakistan Business Council to overcome the energy crisis on the short-term and long-term basis,” he added. He said that under the short-term strategy, the upgrading and overhauling of the existing power plants would be sufficient to enhance output of electricity by 4,000MW, adding that for the long-term plan, the government should focus on the generation of electricity from wind, solar, hydel and gas.
“Power generation from the wind and solar technology is expensive, but this technology is essential to develop a mixed energy culture,” he said. “If the crude oil prices shoot above $200 to $250 a barrel in the future, how would the economy and consumers be able to face this crisis?” he questioned, adding that in this situation, alternative energy resources prove helpful to generate low-cost electricity.
Siddiqui said that the government should make serious efforts to develop the energy sector, which has been neglected in the past, creating an unprecedented energy crisis in the country. “Had the previous governments developed big dams and established new power plants in the past to generate additional electricity and to meet the country’s growing demand, the country would not have been facing this crisis now,” he argued.
He said that Pakistan is suffering a loss of about two percent of the GDP a year because of the energy crisis that triggers unemployment, affects industrial production, tax revenue collection and paralyses overall economic activity in the country. “A will is required to eliminate the electricity shortage and to ensure a smooth sailing of the ailing economy,” he said, adding that the PBC has decided to play a crucial role to support the government in overcoming major problems.
http://www.pakistantoday.com.pk/2011/05/%E2%80%98only-1-5bn-needed-to-bring-end-to-power-woes%E2%80%99/
Pakistan is ready to approve a Norwegian company’s request to build a 150-megawatt wind farm, the first part of a $1 billion plan that could boost by a third the announced capacity for clean-energy power plants, according to Bloomberg News:
Pakistan is seeking to diversify its energy supplies away from oil and gas and boost electricity production. The nation has a power deficit of 3.6 gigawatts a day, or more than the output of two nuclear reactors, triggering 12-hour blackouts that cause riots and close factories in cities nationwide.
The Alternative Energy Development Board is willing to allow a project proposed by NBT AS, a Lysaker-based clean energy company that plans to build the facility in the Sindh province “wind corridor” north of Karachi, according to Said Arif Alauddin, chief executive of the government agency.
“They came to us saying they have got the money and relationship with the Chinese and they want to invest,” Alauddin said from the port city of Karachi. “As soon as they pay the fee, we will issue that letter to them. We will be able to give them the land if we can see they can deliver.”
Pakistan has almost 1 gigawatt of projects under construction or with financing agreed and 498.5 megawatts more of wind programs announced, according to Bloomberg New Energy Finance data. Only 6 megawatts of wind energy facilities are operating in the nation. It’s the ninth-poorest in the Asia- Pacific region with a 2009 gross domestic product per capita of $2,609, according to Bloomberg data.
Chinese Financing
NBT Chief Executive Officer Joar Viken said he plans to tap financing for his project from one of three Chinese turbine makers that his company is talking with about supplying machinery for the facilities.
“We think Pakistan is a very good environment and has a very good framework,” Viken said in a phone interview from New York. “Because we get everything in U.S. dollars, we don’t have a huge currency risk.”
Viken said NBT would issue a tender to Goldwind Science & Technology Co., Sinovel Wind Group Co. and China Energine International Holdings Ltd. (1185) to supply the turbines. Each of the companies have credit lines with the China Development Bank Corp., a state-owned lender.
“Goldwind now is actively seeking more cooperation opportunities with domestic as well as foreign wind farm developers to expand Goldwind’s presence in overseas markets,” Thomas Yao, a spokesman for the company, said in an e-mail. “Norway’s NBT AS is among the international opportunities we are currently considering.”
A spokesman for China Energine, who asked not to be named in line with company policy, said he doesn’t know about the talks and can’t comment. Officials at Sinovel couldn’t be reached.
Financing ‘Feasible’
The financing arrangements are “feasible” because the Chinese turbine makers would not develop the projects themselves, said Eduardo Tabbush, an industry analyst at Bloomberg New Energy Finance in London.
“This is something we’ve seen happening more and more,” Tabbush said.
NBT envisions developing as much as 650 megawatts of wind power in Pakistan over the next few years. It already has purchased land suitable for 50 megawatts in Sindh province and is seeking a partnership with Zulfikar Ali Bhutto Institute of Science and Technology, a university in Karachi, for land for the other 100 megawatts, Alauddin said.
Support Mechanism
-------
The country’s electricity shortfall reaches as much as 3,628 megawatts per day, according to demand-supply data available on the ministry of power and water website.
http://www.bloomberg.com/news/2011-07-13/pakistan-set-to-approve-1-billion-plan-to-boost-wind-energy-production.html
Here's an Express Tribune report on hydrocarbon production in Pakistan being flat for three years in a row:
Challenging security environment, notorious circular debt and delay in some projects due to litigation have adversely affected the country’s hydrocarbon production activities in fiscal 2011, according to a Topline Securities research note. During the outgoing year, hydrocarbon production remained almost flat, at 769,000 boepd (barrel of oil equivalent per day), for the third consecutive year despite the growing energy appetite of the country.
Contrary to the industry trend, Pakistan Oilfields (POL) on the back of its working interest in the Tal block showed a significant improvement of 39 per cent in its production while production of other major listed companies Pakistan Petroleum Limited (PPL) and Oil and Gas Development Company (OGDC) crawled up 0.5 per cent and 3.4 per cent, respectively.
POL and PPL benefit from Tal and Naspha
POL, benefitting from its working interest in the Tal block, witnessed increase of 11.2 per cent and 39.3 per cent in oil and gas production to 4,578 (barrels per day) bpd and 86 million cubic feet per day (mmcfd), respectively.
Furthermore, PPL’s oil production propelled by a massive 48.8 per cent to 7,419 bpd on account of its working interest in both Tal and Naspha block, while the same blocks improved gas performance to cover the reduced production from other major fields including Sui, Khandkhot, Sawan and Miano.
On the other hand of the spectrum, OGDC’s oil production declined by 1.6 per cent while gas production increased by 3.4 per cent compared with last year.
Another year of depressed performance
The country’s hydrocarbon production is expected to show a mere decline of 0.6 per cent to 769,000 boepd in fiscal 2011.
However, gas production decreased by 0.6 per cent to stand at 4 bcfd while oil production show a minor increase of 0.9 per cent to 66,00 bpd.
Major culprits behind the reduced gas production are Sui (-4.4 per cent), Qadirpur (-2 per cent), Zamzama (-23.1 per cent), Sawan (-1.1 per cent), Kandkhot (-5.5 per cent) and Miano (-4.8 per cent), which contribute approximately 48 per cent to the country’s gas production. Moreover, the natural floods was another major factor behind the decline trend, says the note. The only notable increase was witnessed in Manzalai field production, up a massive 67 per cent.
Yielding the maximum from existing fields
In addition to subdued production numbers, sector exploration activity remained muted as well, says the note. However, this conservative approach will be covered if the industry yields the maximum from its existing reservoirs and fast track its few delayed projects.
http://tribune.com.pk/story/209807/oil-and-gas-sector-production-remains-flat-for-third-straight-year/
Here are a few excerpts of an interesting paper on solar energy published in Scientific American:
The sun strikes every square meter of our planet with more than 1,360 watts of power. Half of that energy is absorbed by the atmosphere or reflected back into space. 700 watts of power, on average, reaches Earth’s surface. Summed across the half of the Earth that the sun is shining on, that is 89 petawatts of power. By comparison, all of human civilization uses around 15 terrawatts of power, or one six-thousandth as much. In 14 and a half seconds, the sun provides as much energy to Earth as humanity uses in a day.
The numbers are staggering and surprising. In 88 minutes, the sun provides 470 exajoules of energy, as much energy as humanity consumes in a year. In 112 hours – less than five days – it provides 36 zettajoules of energy – as much energy as is contained in all proven reserves of oil, coal, and natural gas on this planet.
If humanity could capture one tenth of one percent of the solar energy striking the earth – one part in one thousand - we would have access to six times as much energy as we consume in all forms today, with almost no greenhouse gas emissions. At the current rate of energy consumption increase – about 1 percent per year – we will not be using that much energy for another 180 years.
-----------
The cost of solar, in the average location in the U.S., will cross the current average retail electricity price of 12 cents per kilowatt hour in around 2020, or 9 years from now. In fact, given that retail electricity prices are currently rising by a few percent per year, prices will probably cross earlier, around 2018 for the country as a whole, and as early as 2015 for the sunniest parts of America.
10 years later, in 2030, solar electricity is likely to cost half what coal electricity does today. Solar capacity is being built out at an exponential pace already. When the prices become so much more favorable than those of alternate energy sources, that pace will only accelerate.
http://www.scientificamerican.com/blog/post.cfm?id=smaller-cheaper-faster-does-moores-2011-03-15
Here's an assessment of Pakistan's electricity crisis as published in Dawn:
Renowned Scientist and Member Science and Technology, Planning Commission of Pakistan Dr Samar Mubarakmand on Tuesday said the development of Thar coal was the only viable long-term solution to energy crisis prevailing in the country.
“Only Thar Coal can provide guaranteed long-term energy security to Pakistan,” he said while speaking at Islamabad Chamber of Commerce & Industry (ICCI).
He said that the solution to power shortage had to be found indigenously and in this regard the Thar coal was the best option.
He said the electricity generated through integrated gasification combined cycle (IGCC) plants would cost Rs7 per KWH. He said that coal could also be converted into coal gas above the ground in machines called surface gasifiers, and the efficiency of the conversion of coal gas to electricity is about 40 per cent.
Dr Samar said that Thar Coal reserves could play a pivotal role in meeting energy crises both in long term and short term which would enhance industrial competitiveness due to cost effectiveness.
He said that the industrial sector could not wait for long and the government should present quick solution to fill in the gap between demand and supply of energy
He said that the 41 per cent electricity of the world was being produced from the coal, adding that India was producing 64.6 per cent electricity from the coal, whereas Pakistan was only producing 2.27 per cent electricity from coal. He said that 95 per cent natural wealth was not being utilised, whereas not a single kg of coal was mined.
He said that the current energy crisis was causing loss of Rs230 billion and rendering 400,000 people jobless. Current dependable power supply hovers around 14,000MW in summer though it drops in the winter.
On the other hand power demand in 2030 would be more than 100,000MW, he added.
Meanwhile, Mahfooz Elahi, President ICCI said that energy was the key determinant of economic development of the country as Pakistan has been facing an unprecedented energy crisis for past few years.
The government must look towards building power plants and tap alternative energy resources for overcoming power shortage, he maintained.
ICCI President said that delay in fulfilment of export consignments has become a matter of routine due to power outages.
To meet the growing demands of energy, Government should exploit its domestic energy resources which would make the country self-reliant, he emphasised.
http://www.dawn.com/2011/07/06/solution-to-energy-crisis-lies-in-tapping-thar-coal.html
Pakistan's oil and gas sector titled "Pakistan Economy 1947-2011":
KARACHI: Oil and gas sector in Pakistan has seen phenomenal growth since the independence in 1947, as till now 791 wells have been drilled by various local and international exploration companies with over 250 oil and gas discoveries, official data revealed.
The data suggests that these discoveries have brought the gas reserves to 29 trillion cubic feet (TCF), whereas the crude oil recoverable reserves are estimated at 304 million barrels.
At the time of independence, the oil quantities produced were scarce and at that time there was no gas production. Over these years the petroleum industry has played a significant role in the national development by making large indigenous gas discoveries and inviting huge investments, both local and foreign, in the sector.
An investment of $810 million was spent in drilling activities with 30 new wells drilled during the last year.
After the independence of Pakistan, the government promulgated Regulation of Mines and Oilfields and Mineral Development (Government Control) Act, 1948 and issued rules there under in 1949.
The aim of the act was to provide regulatory certainty for exploration and production business that was essential to encourage and accelerate petroleum exploration activities.
Thereafter BOC and AOC established local companies, Pakistan Petroleum Limited (PPL) and Pakistan Oilfields Limited (POL), respectively and transferred exploration activities to these companies.
In 1952, a well drilled on the Sui structure in Central Indus Basin, made the maiden discovery of large reserves of natural gas in the Sui Main Limestone of Early Eocene age.
The original recoverable gas reserves were estimated to be over 10 trillion cubic feet (TCF) equivalent to about one billion barrels of oil.
The discovery of Sui Gas Field was the first major milestone in the search for hydrocarbons in Pakistan.
Following the natural gas discovery at Sui, several foreign oil companies took active interest in carrying out exploration in Pakistan. This led to further exploratory drilling in prospective areas.
The government of Pakistan then decided to undertake the search for oil and gas directly and established the state oil exploration company.
The Oil and Gas Development Corporation was established in September 1961, subsequently, incorporated as a joint stock company with the listing at the local stock exchanges under the name of the Oil and Gas Development Company Limited (OGDCL).
OGDCL’s first success was the small gas discovery at Sari Singh in Sindh in 1965.
Pakistan remains an active and prospective exploration country. Significant finds continue to be made in the existing producing areas, as well as in less-explored regions.
The proven rate of exploration success and a sizeable domestic oil and gas market present promising investment opportunities.
In order to remain attractive in highly competitive global exploration market, the government has been making progressive changes in the investment polices and regulations at regular intervals. With first E&P policy of 1991, Pakistan caught the attention of international petroleum industry.
Further subsequent improvements through policies of 1993, 1994, 1997 made Pakistan an attractive location for upstream investment.
Pakistan overhauled the policy in 2001 and then in 2009. On account of combination of factors such as improved returns on investment based on new fiscal incentives, transparent and open regulatory environment, induction of market reforms and technological advances, the government expects positive influence on local upstream market and hopes that forward momentum will be maintained.
US funding of huge dam project in Pakistan angers India, according to Miami Herald:
ISLAMABAD -- Even as U.S.-Pakistani cooperation on anti-terrorism programs is withering, the United States is considering backing the construction of a giant, $12 billion dam in Pakistan that would be the largest civilian aid project the U.S. has undertaken here in decades.
Supporters of a U.S. role in the project say American participation would mend the United States' tattered image, going a long way toward quieting widespread anti-Americanism amid criticism that the U.S. lavishes money on Pakistan's military while doing little for the country's civilian population.
Approval of the project still faces many hurdles. India objects to the dam because it would be in Kashmir, an area that India also claims. The project also is likely to face opposition from Pakistan's critics in the U.S. Congress, who've called for all aid to be cut off after Osama bin Laden was found hiding in northern Pakistan earlier this year. Recent Pakistani actions, including allegations this week that Pakistan had allowed Chinese military experts to inspect the wreckage of an American stealth helicopter that crashed in the bin Laden compound, are likely to inflame such criticism.
Still, proponents of U.S. aid for the project recall that the United States was popular in Pakistan in the 1960s and '70s, when Washington backed the construction of two enormous dams, Tarbela and Mangla.
"Getting involved in a long-term project like this is very compelling for us," said a senior U.S. official who asked not to be identified because no final decision on the project has been made. "This would be a huge demonstration of our commitment to Pakistan and our faith in the country's future."
The Diamer Basha dam would provide enough power to overcome Pakistan's crippling electricity shortage. Proponents of the project also claim that its water storage capacity, in a 50-mile-long lake that would be created behind the dam, would be so great that it would have averted last's years devastating floods, which deluged a fifth of the country, pushed 20 million people out of their homes and caused an estimated $10 billion in damage.
The U.S.-Pakistani alliance since 2001 has been plagued by accusations in Washington that Islamabad is playing a "double game" by secretly supporting Afghan insurgents, while Pakistan thinks it's been bullied into acting against its own interests and that it's been unfairly blamed for American failures in Afghanistan. The unilateral American raid that killed bin Laden in May humiliated Pakistan's powerful military, causing anti-terrorism cooperation to be all but halted.
Read more: http://www.miamiherald.com/2011/08/16/2361801/us-considers-funding-pakistani.html#ixzz1W4Cr14es
Here's a summary of BMI research report on Pakistan's electricity sector:
The new Pakistan Power Report from BMI forecasts that the country’s power consumption will rise from 77TWh in 2010 to 112TWh by the end of the forecast period, representing average annual growth of 3.9% in 2011-2020. After power industry usage and system losses, we see a supply surplus rising from the estimated 19TWh level seen in 2010 to 28TWh by 2020, assuming 3.9% average annual growth in power generation during the period.
Pakistan’s power generation in 2010 is put by BMI at 95.4TWh, having recovered strongly from the depressed 2009 level of 89.2TWh. BMI is forecasting an average 4.2% annual increase to 117.1TWh between 2011 and 2015. Thermal generation, comprising coal, gas and oil, is expected to increase by an average annual 2.3% during the period to 2015, but growth looks set to accelerate later in the decade.
We expect gas-fired power generation to climb 4.0% a year between 2011 and 2015, with an average annual growth rate of 4.7% forecast to 2020. Gas-fired generation should therefore reach 47.7TWh by 2015 and 62.1TWh by 2020. The share of total power generation should therefore increase from 41.1% to 44.4% by the end of the forecast period. Under the 25-year Energy Security Plan, the government is aiming for 77.8GW of new gas-fired generating capacity by 2030, representing by far the greatest area of growth for power generation. Over the longer term, conversion of older oil plants to gas should mean oil takes a smaller slice of the power pie. It currently accounts for around 30.4% of total generation, falling to a maximum of 24.5% by 2015 thanks to greater gas, hydro and nuclear expansion.
The 25-year energy security plan envisages an increase in nuclear power generation of up to 8.8GW by 2030. The plan predicts the share of nuclear power would increase to 4.2% of the country’s total energy mix. BMI suggests that 2010 nuclear power generation was 2.7TWh, rising to 2.9TWh by 2015 and to 3.2TWh by 2020. Pakistan has huge hydro-electric potential of an estimated 42GW, but currently boasts under 7GW of installed capacity. Power generated varies depending on the extent of the country’s droughts. It has been forecast that US$20bn would be needed to exploit fully hydro-power resources.
Pakistan now shares eighth place with Malaysia in BMI’s updated Power Business Environment Ratings, thanks to its relatively high level of renewables (mostly hydro) usage. Several country risk factors offset the industry strength, but the country is in a good position to keep clear of the Philippines below.
http://www.bizreportshop.com/product/bmi/Pakistan-Power-Report-Q2-2011_180580.html
Here's an interesting excerpt from a report about Pakistan's power sector published in Miami Herald:
There is no place where the country's energy shortage isn't profound. Rural areas are without electricity for up to 16 hours a day while towns often go without for as many as 12 hours daily, forcing factories to close and plunging homes into darkness.
Natural gas supplies are rationed, with factories in the country's most populous province, Punjab, going without two days a week.
Pakistan's economic output is cut by at least 4 percent because of the shortages, the government estimates, something that hampers the country's hopes to battle extremism by creating more economic opportunities. The outages also feed political discontent, triggering frequent, if local, street protests.
Solving the energy problems is a top priority for the United States' aid program, with a State Department delegation here this week, led by Ambassador Carlos Pascual, the Obama administration's special envoy on international energy affairs.
But Pakistan's plans for a 1,700-mile natural gas pipeline from Iran, which would provide Pakistan with a cheaper source of fuel for electricity generation, is a stumbling block.
-------------------
Despite Pakistan's huge hydroelectric potential, it hasn't built a big dam project since the 1970s. Since the U.S.-backed government of President Asif Zardari was elected in 2008, a mushrooming chain of "circular" debt has enveloped the power sector.
The government has assumed $3.6 billion of the power industry's debt. The government-owned power grid owes another $2.5 billion to private-sector generators, even as the government, according to Finance Ministry figures, spent at least $7.4 billion on electricity subsidies during the 2008-2010 period.
Washington and international lenders such as the International Monetary Fund have repeatedly urged Pakistan to cut subsidies, which anemic government finances cannot afford.
Critics say that the government hasn't added to the electricity infrastructure in its three-and-a-half year term, while sinking billions of dollars into unproductive subsidies and taking on debt.
Of the $3.6 billion debt the government assumed, half were bills the government itself hadn't paid, said Ejaz Rafiq Qureshi, the spokesman of the Pakistan Electric Power Co., the state-owed national electricity grid. The rest is owed by private consumers.
At the end of August, a group of nine private power plants demanded that the government pay them within 30 days $540 million it owed for power generation.
Roughly half of Pakistan's current electricity output of 13,000 megawatts comes from the private generators. But there is more capacity that the government doesn't use. Government-owned equipment that could generate another 2,000 megawatts has been sidelined because of poor maintenance. Private equipment that could generate another 2,500 megawatts has been taken out of service because the government hasn't paid its bills, said Abdullah Yusuf, who represents the private producers. Combined, that amounts roughly to the entire immediate shortfall.
"If you had this capacity available, straight away your problem would be solved," said Yusuf.
A longer-term energy project is Pakistan's proposed $12 billion Diamer Basha dam, which would add 4,500 megawatts to Pakistan's electricity generating capacity. Washington is considering providing significant funding to the project. Separately, the U.S. Agency for International Development is currently working on projects that will add 900 megawatts to the Pakistani grid next year.
Read more: http://www.miamiherald.com/2011/09/16/2410787_p2/pakistan-search-for-energy-could.html#ixzz1YBKY4KxS
Here's a US State Dept blog post on US AID efforts for energy projects in Pakistan:
The United States and Pakistan reviewed progress on ongoing energy programs and recommitted themselves to pursuing practical solutions to Pakistan's energy needs during the latest Pakistan-United States Energy Dialogue this week. Ambassador Carlos Pascual, U.S. Department of State Special Envoy for International Energy Affairs, joined Pakistani Minister of Water and Power Naveed Qamar to reaffirm the partnership. They met September 14-15 in Islamabad.
"As all Pakistanis know, reliable and affordable energy is critical to Pakistan's prosperity. Without it, businesses can't operate and families can't light and cool their homes. Pakistan's future depends on power," Ambassador Pascual said at the opening of the Dialogue. "There are no quick fixes to this crisis, but the United States and international partners are willing to help. We will continue to support Pakistan in its efforts to resolve this energy crisis."
Ambassador Pascual reaffirmed the United States' long-term commitment to working with Pakistan to establish a commercially-viable and sustainable power sector. During the Dialogue, the U.S. and Pakistan reviewed ongoing cooperation in the energy sector. USAID highlighted its ongoing energy programs, which will bring more than 900 MW of power to the Pakistani grid by 2012. The programs include construction and rehabilitation of three hydropower plants (Satpara, Gomal Zam and Tarbela) and three thermal power plants (Guddu, Muzafargarh, and Jamshoro).
This extra energy will bring power to approximately 7 million people, eradicate 20 percent of Pakistan's existing power shortage, reduce annual oil imports by more than one million barrels and help store water for irrigation and flood control. The increases to the energy sector will also bring job opportunities for as many as 2.5 million heads of households.
The U.S. delegation welcomed Pakistan's plans, elaborated in the Integrated Energy Sector Recovery Report and Plan, to put the power sector on a commercially-viable and sustainable path. In the Dialogue, Pakistan underscored its commitment to strengthen energy sector governance and efficiency, pursue regulatory reforms, improve financial management, and create a business climate that helps drive investment.
Key topics of discussion at the energy dialogue included: an overview of the power sector and challenges it faces; the current policy and regulatory framework, and possible reforms; availability of primary fuels; the role of the private sector; and regional energy initiatives.
The U.S. underscored that these measures will help develop a stronger foundation for investment. Both sides agreed to continue technical exchanges in areas that can help improve power availability. The U.S. also welcomed Pakistan's continued engagement with international financial institutions and the private sector to assess feasibility of viable hydropower projects and appreciates its commitment to international environmental and societal standards, while also focusing on the importance of water management.
http://blogs.state.gov/index.php/site/entry/us_pakistan_energy_solutions
Increased load shedding in Pakistan alone has cost 400,000 jobs in recent years, according to the World Bank. Although the World Bank report does not address it directly, the anecdotal evidence suggests that almost all of Pakistan's job growth for the decade occurred from 2000-2007 when the economy showed robust gdp growth. During 2000-2007, Pakistan's economy became one of the four fastest growing economies in Asia with its growth rate averaging 7.0 per cent per year for most of this period. As a result of strong economic growth, Pakistan succeeded in reducing poverty by one-half, creating almost 13 million jobs, halving the country's debt burden, raising foreign exchange reserves to a comfortable position and propping the country's exchange rate, restoring investors' confidence and most importantly, taking Pakistan out of the IMF Program. Contrary to its public criticism of the Musharraf-era economy, the preceding facts were acknowledged by the current government in a Memorandum of Economic and Financial Policies (MEFP) for 2008/09-2009/10, while signing agreement with the IMF on November 20, 2008.
http://www.riazhaq.com/2011/09/pakistan-tops-south-asia-jobs-growth.html
Here's an excerpt from The Economist on Pakistan's worsening energy crisis:
ALTHOUGH Pakistan makes international news for terrorist attacks, anti-American demonstrations and its alleged support for insurgents in Afghanistan, it is the basic inability to switch on a light that is pushing this volatile country closer to the edge. Popular anger over Pakistan’s crippling electricity shortage boiled over on to the streets this week, with riots that paralysed whole cities, unleashing running battles with the police and causing widespread damage to government offices.
--------
For ordinary people, the frustrations are endless. Refrigerators become useless. Water runs out because it relies on electrical pumps. Children do their homework by candlelight.
Insufficient capacity is not even the biggest problem. That is a $6 billion chain of debt, ultimately owed by the state, that is debilitating the entire energy sector. Power plants are owed money by the national grid and the grid in turn cannot get consumers (including the Pakistani government) to pay for the electricity they use. This week, the financial crunch meant that oil supply to the two biggest private power plants was halted, because the state-owned oil company had no cash to procure fuel.
The central government also continues to subsidise the cost of electricity to the tune of billions of dollars a year. That money, say the government’s critics, could be better used to pay its own bills and thereby free up unused capacity in power plants that are mothballed because of non-payment and disrepair. Cutting subsidies to people’s electricity bills, however, could lead to even more unrest. Critics argue that the government’s hand-to-mouth policymaking is self-defeating, and illustrates its general lack of planning.
In the long term, help could be at hand. Pakistan says it is about to start work on a giant dam, the $12 billion Daimer-Basha, in the far north-east, with backing from the Asian Development Bank. The dam would add a large amount of generating capacity. America may provide aid for the project. (India, which believes that the dam lies in disputed territory, in part of the former princely state of Kashmir, is inevitably against the dam’s construction.)
There are also plans for a gas pipeline from Iran, though the Americans have warned that the scheme could fall foul of their sanctions against Iran. Alternatives include access to Pakistan’s abundant untapped coal reserves, or importing gas and electricity from central Asia, across Afghanistan, a daunting proposition.
However, it is the short term that is the real problem. Unless the Pakistani government can solve its cycle of debt and disorganisation, ordinary Pakistanis will continue to vent their fury.
http://www.economist.com/node/21531495
Here's an excerpt of a report in The Nation about an International Coal Conf in Karachi:
The international conference was told that Thar region of Sindh province is endowed with mammoth coal (lignite) reserves estimated to be 175 billion tonnes which can produce 100,000MW of electricity for next 300 years and can be a key to energy security and economic prosperity.
----------
“The government has started working on the policy of retrofitting 5300MW of furnace oil based power plants to coal-based initially on imported coal and then on indigenous coal when available,” he (Minister Naveed Qamar) informed the audience.
-----------
Removing the misconceptions about Thar coal, Dr Marcos Leontidis, mining expert from Greece, said that the stripping ratio in Thar is around 6.6: 1, which is much better than many lignite mines in the world including Greece.
Dr Larry Thomas, coal expert from United Kingdom, said that sulphur content in Thar is acceptable being at 0.7%, which is lower than found in many other lignite resources already being used in the world and its moisture levels are same or even less than found in most of the lignite mines in the world. He further said the coal from Thar although may not be exportable to other countries but can be transported to be used in other parts of the province after drying.
Nigel Pickett from SRK-UK in his presentation said renewable energy cannot provide Pakistan reliable energy supplies due to its seasonal and cyclic nature. It has to be part of our energy mix to meet the peak demands and reduce fossil fuel consumption. Volatility of oil prices in 2007 brought heavy stress on the economy and indigenous coal provides the only option to achieve energy security for the country.
Zubair Motiwala, Chairman Sindh Board of Investment, briefed the forum about investment potential of Thar coal and said many international companies from China, South Korea, Germany, Czech Republic, Australia, UK and Turkey have shown their interest in investment in coal mining and power generation in Thar coal and also in the infrastructure projects. He also informed that the Government of Sindh is conducting 3rd International Competitive Bidding for blocks VIII, IX and X of Thar Coalfield and also blocks in Sonda and Badin for attracting international companies to develop coal mining and power generation projects in Sindh.
Mohammad Younus Dagha, Provincial Secretary Coal and Energy Development Department/MD Thar Coal and Energy Board stressed the need to create an ideal energy mix by replacing imported furnace oil to indigenous coal for power generation.
http://nation.com.pk/pakistan-news-newspaper-daily-english-online/Business/23-Oct-2011/5300MW-plants-will-be-converted-to-coal-Qamar
Here's David Brooks of NY Times on "shale gas revolution" in America:
The United States is a country that has received many blessings, and once upon a time you could assume that Americans would come together to take advantage of them. But you can no longer make that assumption. The country is more divided and more clogged by special interests. Now we groan to absorb even the most wondrous gifts.
A few years ago, a business genius named George P. Mitchell helped offer such a gift. As Daniel Yergin writes in “The Quest,” his gripping history of energy innovation, Mitchell fought through waves of skepticism and opposition to extract natural gas from shale. The method he and his team used to release the trapped gas, called fracking, has paid off in the most immense way. In 2000, shale gas represented just 1 percent of American natural gas supplies. Today, it is 30 percent and rising.
John Rowe, the chief executive of the utility Exelon, which derives almost all its power from nuclear plants, says that shale gas is one of the most important energy revolutions of his lifetime. It’s a cliché word, Yergin told me, but the fracking innovation is game-changing. It transforms the energy marketplace.
The U.S. now seems to possess a 100-year supply of natural gas, which is the cleanest of the fossil fuels. This cleaner, cheaper energy source is already replacing dirtier coal-fired plants. It could serve as the ideal bridge, Amy Jaffe of Rice University says, until renewable sources like wind and solar mature.
Already shale gas has produced more than half a million new jobs, not only in traditional areas like Texas but also in economically wounded places like western Pennsylvania and, soon, Ohio. If current trends continue, there are hundreds of thousands of new jobs to come.
Chemical companies rely heavily on natural gas, and the abundance of this new source has induced companies like Dow Chemical to invest in the U.S. rather than abroad. The French company Vallourec is building a $650 million plant in Youngstown, Ohio, to make steel tubes for the wells. States like Pennsylvania, Ohio and New York will reap billions in additional revenue. Consumers also benefit. Today, natural gas prices are less than half of what they were three years ago, lowering electricity prices. Meanwhile, America is less reliant on foreign suppliers.
All of this is tremendously good news, but, of course, nothing is that simple. The U.S. is polarized between “drill, baby, drill” conservatives, who seem suspicious of most regulation, and some environmentalists, who seem to regard fossil fuels as morally corrupt and imagine we can switch to wind and solar overnight.
The shale gas revolution challenges the coal industry, renders new nuclear plants uneconomic and changes the economics for the renewable energy companies, which are now much further from viability. So forces have gathered against shale gas, with predictable results.
The clashes between the industry and the environmentalists are now becoming brutal and totalistic, dehumanizing each side. Not-in-my-backyard activists are organizing to prevent exploration. Environmentalists and their publicists wax apocalyptic.
Like every energy source, fracking has its dangers. The process involves injecting large amounts of water and chemicals deep underground. If done right, this should not contaminate freshwater supplies, but rogue companies have screwed up and there have been instances of contamination.
The wells, which are sometimes beneath residential areas, are serviced by big trucks that damage the roads and alter the atmosphere in neighborhoods. A few sloppy companies could discredit the whole sector...........
http://www.nytimes.com/2011/11/04/opinion/brooks-the-shale-gas-revolution.html?_r=1&scp=2&sq=brooks&st=cse
Pakistan planning to purchase two nuclear power plants from China, reports The Express Tribune:
ISLAMABAD:
Pakistan has planned to purchase two nuclear power plants with a combined capacity of 2,000 megawatts from China, which will be utilised for setting up Karachi Nuclear Power Plant-2 (Kanupp-2) and Kanupp-3 and help mitigate the energy crisis.
According to documents available with The Express Tribune, China National Nuclear Corporation (CNNC) and Pakistan Atomic Energy Commission (PAEC) are likely to enter into an agreement to conduct a joint study to finalise design modifications, which would enable Pakistan to acquire two nuclear power plants, each having power generation capacity of 1,000 megawatts.
After completion of this project, a contract for establishing Kanupp-2 and Kanupp-3 will be negotiated.
The Planning Commission has said CNNC may be asked to grant intellectual property rights for the existing 1,000-megawatt plant and suggest steps which could help Pakistan avoid violation of property rights.
China has three state-owned corporations, which can own and operate nuclear power plants, including China National Nuclear Corporation (CNNC), China Guangdong Nuclear Power Holding Company (CGNPC) and China Power Investment Corporation (CPIC).
CGNPC currently operates four nuclear power plants of 3,758 megawatts in China and also involved in 16 other projects having capacity of 25,000 megawatts, which are under construction. The company’s focus has been on three-loop 1,000-megawatt plants.
The Planning Commission also questioned whether PAEC had approached the three nuclear power plant developers in order to ensure fair competition in offering the plants. “Moreover comparison of intellectual property rights of other nuclear power plant vendors may also be brought out,” the commission said.
In an attempt to increase power generation capacity, the government focuses on developing nuclear energy on a relatively bigger scale. Accordingly, the Energy Security Action Plan has envisaged increasing the share of nuclear power by installing 8,800-megawatt nuclear power plants by 2030.
The import of nuclear power plants will lead to electricity generation at cheaper rates compared to the thermal source, contributing to tackling the power crisis. About a month ago, power shortages reached their peak at around 8,000 to 8,500 megawatts, forcing long hours of outages across the country.
The load-shedding has disrupted industrial activity, denting overall economic growth of the country, which stood at 2.4 per cent last fiscal year.
http://tribune.com.pk/story/289908/energy-requirement-pakistan-to-buy-two-nuclear-power-plants-from-china/
Here's a Bloomberg report on new gas fields in Pakistan:
July 14 (Bloomberg) -- Oil & Gas Development Co., Pakistan’s biggest fuels explorer, plans to spend a record $1 billion this year to drill 48 new wells and increase production, to help bridge the nation’s record energy deficit.
“We are following a very aggressive exploration policy,” Chief Executive Shah Mehboob Alam said in an interview at his office in Islamabad yesterday. “We are targeting a number of discoveries.”
---------
A “sizeable” discovery in the northwest will be announced in “a couple of days,” Alam said, without giving details.
----------
The company expects the Zin Block in Baluchistan to generate its first gas flows within two years. The block has estimated gas reserves of 10 trillion cubic feet and drilling is scheduled to start as soon as the government approves security plans within the next two weeks, he said.
“We drilled only five out a planned 15 wells in Baluchistan last year because of security issues,” he said. “Now, we have submitted a plan to the Finance Ministry under which the Frontier Corp. will raise a special force of 500 to 600 people.”
Baluch nationalists want political autonomy and a share of the resources in the province, where the country’s largest gas fields, including Sui, are located. The Frontier Corp. is part of Pakistan’s paramilitary force.
The company is also working in fields in western Baluchistan, including the Samandar field, west of Karachi, and Shahana, which is near the border with Iran, Alam said.
Fresh Bids
Oil & Gas will invite bids today for the development of Kunar Pasakhi Deep and Tando Allah Yar fields in the southern province of Sindh, Alam said. Previously awarded tenders had been canceled after being challenged in court for not complying with regulatory procedures.
The two fields may produce 280 million cubic feet of gas a day, 360 metric tons of liquefied petroleum gas a day and 4,300 barrels of oil a day, Alam said.
The company drilled 26 wells and made six discoveries in the year ended June 30, including at Nashpa in the northwest, which is producing 15 million cubic feet a day of gas and 4,700 barrels of oil a day, he said. Oil & Gas Development discovers fuel in one out of every 2.3 wells drilled, compared with an industry average of one in every 3.8, he said.
New Compressors
Oil & Gas Development will increase production after installing new compressors to plug leaks at the Qadirpur gas field by September, Alam said. The company plans to buy two new rigs this year.
The Qadirpur field in the southern province of Sindh contributes about 40 percent of the company’s total gas output.
Oil & Gas Development produces about 1 billion cubic feet of gas a day, or a quarter of the country’s total output. Its oil production is 60 percent of the nation’s total of 62,000 barrels a day. Pakistan imports 85 percent of its oil needs.
The company’s profit in the 12 months ended June 30, will be “higher than last year,” Alam said, without giving details. Oil & Gas reported a net profit of 55.5 billion rupees ($647 million) in the year ended June 30, 2009, according to data compiled by Bloomberg.
http://www.bloomberg.com/apps/news?pid=syndmedia_news&sid=a6Bt.IXV23ZU&refer=syndmedia%0A%09%09%09
Here's a Bloomberg hydrocarbon update for Pakistan:
Nov. 15 (Bloomberg) -- Oil & Gas Development Co., Pakistan’s biggest energy explorer, expects to increase output by as much as 20 percent in the year through June after adding resources in the country’s northwest.
“New oil and gas discoveries will certainly increase our profitability,” Managing Director Basharat Mirza said yesterday in an interview in Islamabad. “I expect a 15 percent to 20 percent addition to our oil and gas production this year.”
OGDC, the largest company on the Karachi Stock Exchange, reported a gas find this week at the Nashpa-2 well in Khyber Pakhtunkhwa province. The discovery may help boost energy supplies in a country where factories are facing three days a week without gas this winter.
The company plans to spend $270 million on drilling some 27 new wells this financial year, Mirza said. It expects to produce 10 million to 12 million cubic feet of gas a day at Nashpa-2 and 5,000 barrels of oil, he said at the company’s headquarters.
An increase in domestic energy supplies may help boost South Asia’s second-biggest economy, which has been hurt by terrorism and dwindling foreign investment. Pakistan is preparing for a gas shortfall of 1.05 billion cubic feet a day by February, Petroleum Minister Asim Hussain said Nov. 13. That may exacerbate the daily power cuts that have forced textile and engineering plants to close and caused riots across the country.
Shares Slip
OGDC dropped 0.6 percent to 155.11 rupees at the close in Karachi yesterday, extending its decline this year to 9.2 percent. The benchmark KSE100 Index is little changed over the period.
As it expands in Khyber Pakhtunkhwa, the company has limited its exploration in the western province of Baluchistan, where attacks on pipelines and other energy infrastructure have disrupted gas supplies, Mirza said. OGDC has taken all “low- hanging fruit” and is left with “difficult areas that include Baluchistan and offshore blocks that require huge investment.”
The company has the protection of the Pakistan army at its Zin block in Baluchistan, where it plans to produce its first gas flows in the “next four weeks” to gather data on the reservoir, Mirza said. The block holds an estimated 10 trillion cubic feet of gas reserves, former Chief Executive Officer Shah Mehboob Alam said last year.
OGDC also expects a further 100 million cubic feet a day from a well in Tando Allah Yar in Sind province by December after completing a pipeline, according to Mirza. Further infrastructure at the field would allow an increase in output capacity to 400 million cubic feet a day, he said.
Payment Defaults
The company is pressing ahead with its investment plan even as domestic oil refineries and gas distributors fail to pay for supplies.
The company is owed about 93 billion rupees ($1.07 billion) in back payments, Mirza said, adding that “so far this default by our customers has not impacted our ability to finance our exploration. We might issue bonds or borrow from banks if this situation persists, let’s say for another year.”
Power utilities, whose earnings are sapped by unpaid customer bills and price controls, have delayed payments to fuel suppliers, which in turn owe money to the oil refiners. The total dues, known as circular debt in Pakistan, amount to more than 300 billion rupees, according to government estimates.
OGDC reported net income of 63.5 billion rupees in the year ended June 30, up 7 percent from the previous year, according to data compiled by Bloomberg.
http://www.businessweek.com/news/2011-11-14/ogdc-of-pakistan-to-raise-output-up-to-20-after-nashpa-gas-find.html
Here's a Daily Times report on Nashpa oil & gas field:
KARACHI: The Oil and Gas Development Corporation Limited (OGDCL) operator of Nashpa Exploration License, together with its joint venture partners Pakistan Petroleum Limited (PPL) and Government Holding Private Limited (GHPL) have discovered a new hydrocarbon-bearing horizon from its appraisal well Nashpa 02, located in District Karak, Khyber Pakhtoonkhwa. The structure of well was delineated, drilled and tested utilising indigenous expertise.
Nashpa Well No 02 was drilled down to the depth of 4340 metres targeting to test the oil and gas potential of Datta, Shinawari, Samanasuk, Lumshiwal, Hangu and Lockhart formations.
Significant reserves of hydrocarbons have been found at Nashpa Well No II. The first targeted zone “Datta Sandstone” has been tested and produced 3370 barrels per day of crude oil and 11 MMCFD gas through 32/64” choke at well head flowing pressure 3800 psi.
This discovery will add to the hydrocarbon reserves base of the company and joint venture partners, bringing significant savings to the country in term of oil import bill. Testing of another four potential reservoir formations will also be undertaken wherein similar encouraging results are expected. The full flow potential of this well and the extent of the discovery will be determined after completing the testing programme.
http://www.dailytimes.com.pk/default.asp?page=2011\11\15\story_15-11-2011_pg5_5
Here's a Business Recorder report on Pakistan's growing power requirements:
SLAMABAD: Former Water and Power Minister Raja Pervez Asharaf on Thursday told the Supreme Court that Pakistan need an addition of 1200 MW every year as the power requirement would enhance to 1,30,000 MW by the year 2030.
Appearing before a two-Judge bench of Chief Justice Iftikhar Muhammad Chaudhry and Justice Khilji Arif Hussain on suo motu case regarding alleged corruption in setting up Rental Power Projects, he defended himself and said that Pakistan's power shortage solution was in hydel power generation and not in thermal which was costly.
"Thermal generation is not our future because we can't afford it for being too expensive," he said, adding "We need to exploit hydel and coal assets.
"The run of the river project can alone have the potential of 7,500 MW while we have 187 million tones of coal reserves in Thar."
He said that unnecessary vilification campaign had led to develop a perception of a scam and swindle that hampered the installation of power plants.
"Even harsher mudslinging and denigration was the order of the day when the government of Benazir Bhutto introduced the Independent Power Producers (IPPs) in 1994," he added.
He said resultantly the big players shied away from investing in Pakistan's power sector when fingers were pointed at them. He also referred to the application of PML-Q legislator and Housing Minister Makhdoom Fasial Saleh Hayat who had levelled charges of corruption and mismanagement in setting up RPPs.
"The concept of RPPs as a stop-gap arrangement was introduced by the previous government of which Faisal Saleh Hayat was the minister and for being the cabinet member was equally responsible if wrong policy was pursued," Raja Ashraf recalled.
Justifying why Makhdoom Hayat was chasing him, Raja Asharaf said, being PPP's secretary general he was very vocal in criticizing Makhdoom Hayat's contesting the elections on his party's ticket and then joining Musharraf's government to become a minister in dictatorial regime.
He also announced that the current power situation in Karachi, the main business hub, would end in few days as the government had developed a mechanism.
Not a single investor or unsuccessful bidder ever raised allegation that he being the minister devoured the money in the grant of license to develop RPPs, he said and brushed aside the impression that he owned a palatial house in London.
The government of Musharraf paid no heed despite repeated warnings of a looming power crisis, he said, resultantly not a single mega watt of electricity was added to the national grid that crippled our industry.
The electricity shortfall which was at 1000 MW in 2005 surged to 5000 MW in 2008 when he assumed the office of the water and power ministry, he said adding he inherited the circular debt of Rs 400 billion............
http://www.brecorder.com/pakistan/business-a-economy/36432-pakistan-requires-1200mw-power-every-year.html
Here's a Business Recorder report (Part 2) on Pakistan's growing power requirements:
...The electricity shortfall which was at 1000 MW in 2005 surged to 5000 MW in 2008 when he assumed the office of the water and power ministry, he said adding he inherited the circular debt of Rs 400 billion.
"We had no solution to reduce the shortfall even when some fast track projects in the pipeline got delayed for over two years," he said.
He said "still we exempted our textile industry the main source of $35 billion foreign exchange earning from load shedding even during the difficult days".
The bids were invited for the commissioning of IPPs but no response came because of law and order situation even for the hydel plants.
"We are fast moving towards a different (darker) era," he feared and recalled that today Pepco was facing a shortfall of Rs 170 billion in subsidy for providing uninterrupted power supply to 6.5 million life line consumers when the total number of consumers were over 10 million.
"The World Bank had suggested us to go for long term policies instead of wasting money on subsidies and overcoming load shedding as a short term", he added.
Referring to the question why Pakistan was not developing its own power generation units, he said such investment required Rs 1.2 to 1.4 billion per MW which they could not afford.
He also compared the situation in India which was faced with 40,000 MW of shortfall, while the situation in Bangladesh was worst, Sharjah also experiencing load shedding where consumers in London were paying different tariff for each hour per day.
"Availability and affordability of power is an uphill task though it may not be true for long term projects," he added.
Meanwhile Khawaja Tariq Raheem, representing Pepco, warned that the hydel generation the production of which would dip by 1000 MW in the next decade, would be stalled from the next month because of annual canal closure.
"We would need a prompt production of 500 to 600 MW of electricity which the existing machinery could produce," he informed.
http://www.brecorder.com/pakistan/business-a-economy/36432-pakistan-requires-1200mw-power-every-year.html
"Clean" and "green" are words not usually associated with the streets of Lahore, but a garbage collecting business is changing the image of the Pakistani city.
And it is making millions of dollars in the process, by turning waste into liquefied petroleum products and fertiliser for farmlands.
Al Jazeera's Kamal Hyder reports from Lahore, Pakistan.
http://www.aljazeera.com/news/asia/2011/12/201112193155297451.html
China has showered goodies on Pakistan as its top diplomat Dai Bingguo is visiting Islamabad, complains Times of India.
China has offered Pakistani companies tax free status if they operate in the border province of Xinjiang while ICBC, the Chinese bank, is working on ways to finance the Iran-Pakistan oil pipeline project.
In Islamabad, Dai appealed to world powers to support Pakistan and not desert it at this time. Pakistan has considerable influence on Afghanistan, which must be taken into consideration by those trying to resolve the crisis in Kabul, he suggested after meeting Pakistani president Asif Ali Zardari and prime minister Yousuf Raza Gilani.
The taxation move suggests China is serious about building a rail line connecting Pakistan and is preparing the economic infrastructure to support it. The new rule unveiled on Saturday offers a 5-year tax exemption to companies operating in Kashgar, which borders Pakistan and Horgos on the Chinese border with Kazakhstan.
Beijing had earlier announced to build a logistics centre in Kashgar, which saw bloody ethnic riots earlier this year, to revive the local economy and divert attention of the minority Muslim community from separatist leaders fighting to build an independent East Turkmenistan nation.
Pakistan recently announced that the Industrial and Commercial Bank of China, the largest of Chinese banks, has been appointed as the main financier in a consortium that will finance the $1.2 billion Iran-Pakistan gas pipeline. Beijing's hand is clearly visible in the decision because the project is based on the assumption of a politically stable Pakistan, which is not the case at present.
China, which has already invested $200 million to build the Gadwar port in Pakistan and helped the country build two nuclear power projects, is betting on the ability of the Zardari government to ensure stability by mending fences with the country's military leadership.
http://timesofindia.indiatimes.com/world/china/China-offers-goodies-to-Pakistan-urges-world-powers-not-to-abandon-her/articleshow/11233118.cms
Here's a UPI story on gas shortages in Pakistan:
Pakistan has a multifaceted strategy to address growing energy shortages, including quick action on a pipeline from Iran, a government agency said.
Pakistani natural gas supplies fell 33 percent compared with last year. Rolling blackouts are common and the government has worked with consumers to limit consumption. Islamabad last week said it would ration natural gas to cope with the deficit.
The Pakistani Ministry of Petroleum and Natural Resources said it had a series of measures it could take to address the shortages.
"The government is implementing a multi-pronged strategy, which includes several measures such as timely completion of the Pakistan-Iran gas pipeline project to meet the growing energy deficit and, in particular, shortages in gas supplies, which constitute nearly 50 percent of the energy mix of the country," the ministry was quoted by Pakistan's News International as saying.
An economic steering committee, meanwhile, said Pakistan remained committed to a rival pipeline, the Turkmenistan-Afghanistan-Pakistan-India project.
Pakistan gets about 30 percent of its energy needs from imports, mostly from oil. The volatile commodity market is putting additional strain on the country's energy sector, officials said.
Petroleum Minister Asim Hussain said conservation of natural resources is essential for energy security.
Read more: http://www.upi.com/Business_News/Energy-Resources/2011/12/28/Pakistan-goes-all-in-for-energy-security/UPI-25701325075547/#ixzz1hqv5mvZl
Here are some gas production & consumption stats by Pak provinces as provided by Minister of Petroleum Asim Husain on National TV:
Sindh produces 69% and consumes 41%
Balochistan produces 17% consumes 7%
KPK produces 10% consumes 7%
Punjab produces 4% consumes 45%
Here's a Dawn report on widespread gas theft in Pakistan:
The Sui Northern Gas Pipelines Limited and Sui Southern Gas Company Limited are causing a cumulative annual loss of about Rs300 billion to national economy, almost six times the losses caused by power sector, because gas shortage leads to civil unrest and affect businesses, transport and households.
The colossal loss has so far remained off the public eye because the gas shortage affects the public life only for three winter months and gas companies are paid at least 17 per cent guaranteed return on assets even if these continue to make losses. If these losses are controlled, about 700 million cubic feet of gas a day could be added to the overall supply, reducing the current shortfall by almost half.
A senior government official in the planning commission told Dawn that the transmission and distribution losses – described in the official jargon as unaccounted for gas – of the two utilities that went up to 13 per cent were resulting in wasteful consumption of 350 million cubic feet per day (mmcfd).
Given the fact that furnace oil is used as replacement fuel for power generation and industrial use, every million British Thermal Unit (mmbtu) costs the economy an additional burden of $20 per mmbtu, according to planning commission`s member energy Shahid Sattar. As such, the daily additional cost on import of furnace oil comes to about $7000, translating into an annual additional burden of $2.55 billion, he said.
Likewise, domestic geysers are described as gas guzzlers whose efficiency could be increased by 20 per cent by putting in a small conical baffle costing Rs500 per piece in every geyser and the efficiency could be further improved by up to 45 per cent by installing instant geysers. These two measures alone could provide another saving of 250 mmcfd, reducing import bill by $450 million or Rs40 billion in three winter months.
In comparison, the transmission and distribution losses of Wapda`s power companies currently stand at about 22 per cent which translates into an annual loss of about Rs60 billion. The official said the power losses at about 10-12 per cent were globally acceptable compared with 2-3 per cent losses in the gas distribution system.
SNGPL Managing Director Arif Hamid says his company`s system loss stood at 11.7 per cent in October 2011 which was scaled down to 11.4 per cent in November. He is of the view that six per cent gas losses are globally acceptable.
Ogra, in consultation with gas companies, had set a target of reducing system losses to 4.5 per cent by financial year 2010-11 when actual losses stood at about seven per cent and have since been increasing.
The planning commission official said that Ogra had successfully brought down gas distribution losses to 4.5 per cent through mandatory one per cent loss reduction every year until 2008 but the previous Ogra chairman appointed on political grounds, and then sacked on orders of the Islamabad High Court and then the Supreme Court of Pakistan, raised these benchmarks to about 11 per cent.
----------
This additional cost estimated at over Rs70 billion over the past four years has not only created an additional demand of about 500 mmcfd but has also translated into gas tariff as expenditure incurred by the companies because the two utilities are guaranteed 17 per cent and 17.5 per cent return on assets under international covenants with the World Bank.
------------
The economic value multiplies manifold in view of the fact the supply is already short of demand by about 50 per cent in winter months. Giving an example, the official said a private domestic fertiliser plant was generating an annual revenue of about Rs15 billion by consuming only 35 mmcfd of gas. Its ultimate contribution to agriculture, employment generation and the national economy was manifold and not included in these estimates, the official said.
Gas crisis in Pakistan will subside by 2013 claims Federal Minister of Petroleum and Natural Resources, according to News Pakistan:
Thursday, January 12, 2012: The Federal Minister of Petroleum and Natural Resources, Dr Asim Hussain, has painted a rosy picture for Gas crisis in Pakistan. The minister during the inauguration of Kunar-Pasakhi
gas field in Tandojam claimed that by the end of 2013, Gas shortfall in the country will subside.
Asim declared that a total of 2.6 billion cubic feet of gas will be pumped up into the system; the promised increase will include 1,058 million cubic feet per day of gas produced locally and over 1.5 bcf of imported gas from projects
which are yet to materialise.
Kunar-Pasakhi gas field, which was inaugurated by by Prime Minister Yousaf Raza Gilani at Sui Southern Gas Company office in Deh Bukhari, Hyderabad, has a production capacity of 100 mmcfd.
The cost of project is estimated to be Rs1.49 billion. The SSGC and Sui Northern Gas Company Limited will share 50 mmcfd each from the supply. The inflow of 50 mmcfd gas will ease shortage in Punjab, which has been struck the hardest.
The Prime Minister of Pakistan at the inauguration said, “We inherited an energy crisis when we came to power but we will ensure that the next governments do not face the same. Pakistan is endowed with all kinds of natural resources;
the need is to harness them at the right time.”
The Kunar-Pasakhi field was discovered some eight years ago but work was delayed due to lawsuits. According to Azeem Iqbal Siddiqui, SSGC Managing Director, the project will benefit up to 2.5 million consumers and produce 387 tons
of liquefied petroleum gas (LPG) and 400 tons of liquefied natural gas (LNG).
The natural resources minister said the present government will give a plan of action for five and ten years for energy production. According to him, current projects under development in Sindh and Balochistan will contribute over
1,058 mmcfd in the next two years. He expects another 1 bcf from Iran over the next year besides LNG import of 500 mmcfd.
http://www.newspakistan.pk/2012/01/13/Gas-crisis-in-Pakistan-will-subside-by-2013-claims-Federal-Minister-of-Petroleum-and-Natural-Resources/
Toby Dalton, Director, Carnegie Endowment for International Peace, said here on Monday evening that the economic future of Pakistan was interlinked with its energy future, according to The News:
He made the observation at a roundtable discussion on ‘Political Future of Pakistan and International Community’ at a local hotel. The roundtable discussion was organised under the auspices of Centre for Peace, Security and Development.
Carnegie Endowment for International Peace, he said, was a global think tank. “We think the dynamism that exists in Pakistan on its own terms, not in US terms,” he said.
“We understand issues such as circular debt, CNG issue and other issues being faced by Pakistan,” Dalton said.
The real issue was how Pakistan formed political consensus, how different political parties were brought together, he said.
“The fundamental problem is to bring confidence to bring investment,” he said.
“Energy is fundamental to the future, just as economy is fundamental to the future,” he emphasized.
George Perkovich, Vice President Studies, Carnegie Endowment for International Peace said Turkey was a very interesting example for growth. It was an ongoing struggle but there was so much interest to invest in Turkey, he said. Once such an environment was achieved, “the international community can come and augment,” he said.
He said we understand that many interesting things were going on in Pakistan.
He said the United States and other Western countries clearly want Pakistan to be peaceful.
“The sense of justice is very important in Pakistan and in any society,” he said. “To address injustices we need to involve the whole world,” he said.
He, however, made it clear that to bring about justice was “messy” and takes a long time but without it there could be no stability.
“We will be looking to see how Pakistan addresses these issues “internally” that were no doubt challenging, he said.
Perkovich agreed that there was growing awareness that whatever happened during the last 60 years doesn’t work and lessons needs to be learnt. Pakistan itself has these issues and “economic dynamism is the key,” he remarked.
In Afghanistan too, he said, the US was trying to bring some sort of stability. Responding to a question Perkovich said he understands Memogate but it was not the US government that should be held responsible for it.
Information Minister Shazia Marri said, “Whatever went wrong in Pakistan is not only because of Pakistanis.”
“Pakistan is not only an important country in the region; it is important in the world,” she observed.
“We need you to understand what our passions are,” she said. “Remedies need to come from friends who influence us,” she said.
“All democracies have gone through experiences,” Marri said. “We are in the learning process; probably in a more challenging way,” she said.
“We are a younger democracy which is flourishing,” Marri said. “We were gifted the world’s most terrible dictator. He had no right to rule our three generations,” she made the remark referring to military ruler Gen Ayub Khan.
“Then there was Zia who brought Kalashnikov culture,” Marri said.
“We have hardly four years of democracy,” she said. “Our children want to respect others, but it’s a two-way thing,” she said.
Faisal Siddiqui, leader of Muthahida Qaumi Movement (MQM) said extremism was not only an issue in Pakistan; it was a global issue.....
http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=87901&Cat=4&dt=1/17/2012
Excerpts from The Nation story on $513 million ADB loan for water and power projects in Pakistan:
Pakistan and Asian Development Bank (ADB) has singed two loan agreements worth of $513.24 million that included $270 million for the tranche-2 of the Punjab Irrigated Agriculture Investment Programme (PIAIP) and $243.24 million for tranche-3 of the Power Transmission Enhancement Investment Programme.
Secretary Irrigation Department Punjab and Country Director Asian Development Bank in Pakistan have signed the first agreement of "Punjab Irrigated Agriculture Investment Programme (PIAIP) Tranche-II". This agreement aims at sustainable improved delivery of services for irrigated agriculture and better water management in Punjab. The project aims to provide reliable irrigation supplies to the Lower Chenab Canal Command area.
According to the agreement this project would include construction of a new barrage complex to be located approximately 275 meters downstream of the exiting Khanki Headwork on the river Chenab, which new barrage complex shall include a main weir and under sluice; gats and hosting arrangements; and operating deck and access road bridge. Construction of a canal head regulator adjacent to the new barrage and a lead channel to the existing lower Chenab canal and the dismantling of the existing Khanki Headwork and provision of implementation support to the project executing agency for construction supervision and management expenses of PMO barrage. The project is expected to be completed by the 30th June 2016. Secretary Economic Affairs Division and Country Director Asian Development Bank in Pakistan singed the second agreement Power Transmission Enhancement Investment Programme tracnhe-III.
This agreement targets to enhance the efficiency of the overall power transmission system and to provide an adequate and reliable power supply to a greater number of commercial, industrial and residential consumers. The projects shall comprise following, a new 600km 500 KV transmission line from Jahmshoro to Moro, Daudu and Rahim Yar Khan, a new 500 KV grid stations a Moro and expansion/ augmentation of 3 existing 500 KV grid stations at Jamshoro. Dadu and Rahim Yar Khan. A new 125 KM 220 KV transmission line from UCH-II power plant to the 220-grid station at Sibbi, and a connection between the UCH-I and UCH-II power plants. A new 200 KV grid station at Mansehra and procurement of transmission system equipment. This project is expected to be completed by 31st December 2015.
http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/19-Jan-2012/adb-signs-loan-deals-with-pakistan-513-24m-for-power-agriculture
Here's a report in The News about $10 billion Chinese investment in energy projects in Pakistan:
China’s state-owned Three Gorges Corp. plans to invest $10 billion by 2018 in Pakistan’s energy sector and a delegation is scheduled to visit Pakistan on February 7, officials said on Friday.
The Hong Kong-based United Energy Group Limited of China also intends to establish a 2,000 megawatts power project in Sindh as their delegation is also visiting Pakistan next month to hold further talks on setting up the power projects, they said.
Sindh Coal and Energy Department has signed memorandums of understating (MoU) with the two companies, which have shown interest in developing coal-fired power plants in Thar and Badin coal fields, as well, the officials said.
In an attempt to resolve the issue, the government is pinning hopes on Thar Underground Coal Gasification (UCG) pilot project, which contains the country’s largest coal deposits of around 850 trillion cubic feet spanning over 3,800 square miles, they said.
Overall, according to the World Energy Council, Pakistan has slightly more than 2,000 million tons of proven recoverable coal reserves.
Pakistan’s current electricity demand is around 25,000 megawatts per day, but the current electrical production is less than 20,000 megawatts per day, leaving a deficit of slightly more than 5,000 megawatts, and by 2015, domestic demand is projected to rise to 30,000 megawatts per day.
Currently, the country depends on oil and natural gas to generate up to 60 percent of its electricity needs, further impacting the country’s balance of payments as the price of oil rises and the ongoing power shortages are beginning to impact the country’s bottom-line exports, the officials said.
Member of the Science and Technology Planning Commission, Dr Samar Mubarakmand, has said that Thar coal project would be beneficial for common people and free from all defects.
The success of the Thar coal project would lead to investment from leading international companies, he said.
With the completion of coal-fired power generation project, the nation would get cheap and sufficient power supply, which would resolve the current energy crisis, he added.
Mubarakmand said that the country had enough coal reserves through which it could daily produce 50-60 million cubic feet gasifier, which would end gas shortage from the country.
It is for the first time that the coal gasification is being launched on commercial basis, which will help in abundant and cheap electricity.
http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=89763&Cat=3
India considering paying for Iranian oil in Indian rupee, reports AFP:
India said Monday it may use its own currency, the rupee, to pay for oil imports from Iran in the face of a US-led sanctions campaign aimed at forcing Tehran to abandon its nuclear programme.
India has said it will continue to import oil from Iran, joining China in refusing to bow to intensifying US pressure not to do business with Iran.
India currently routes its dollar payments for Iranian crude through a Turkish bank -- an avenue that might be closed off as Washington ratchets up pressure on the Persian Gulf state.
"There are different (payment) options which are being evaluated and discussed. We are also considering the rupee as an option," Reserve Bank of India Deputy Governor H.R. Khan told reporters.
Indian officials say the country could pay partly for its Iranian oil imports in rupees that Iran could then use to buy Indian goods.
However, they say Iranian imports of Indian goods would not cover New Delhi's entire oil purchase bill.
India pays Iran about $1 billion every month through Turkey for the 370,000 barrels a day of crude oil it buys from the world's fourth-largest oil producer.
Khan said as of now there had been no disruption in the current payment arrangement.
But the Press Trust of India quoted a senior government official as saying there were indications from Turkey's state-run Halkbank that it would have to stop settling payments on behalf of Indian companies.
The news agency did not name the official.
Iran is India's second-largest oil supplier after Saudi Arabia, providing around 12 percent of the fast-growing country's crude needs.
An Indian delegation visited Tehran earlier this month to discuss payment options.
India's Finance Minister Pranab Mukherjee told reporters in Chicago on the weekend that New Delhi would not scale down its petroleum imports from Iran despite US and European sanctions against the Islamic republic.
"We will not decrease imports from Iran," Mukherjee was quoted as saying by the Press Trust of India at the end of a two-day visit aimed at wooing US investment.
"Iran is an important country for India despite US and European sanctions on Iran.
"It is not possible for India to take any decision to reduce imports from Iran drastically."
The West fears Iran is trying to build a nuclear bomb. Tehran insists its nuclear programme is only for civilian use and refuses to abandon its uranium enrichment activities.
http://www.google.com/hostednews/afp/article/ALeqM5i06u5gQlzR9uWBHbpKWoeuU_7r8g?docId=CNG.5862125f766c04eb2281885744c3a99d.4f1
Here's an assessment of the impact of energy crisis in Pakistan by Sky News:
Energy shortages across Pakistan are crippling the country's economy and costing businesses millions in lost productivity.
Electricity is cut off for hours at a time, fuel is rationed at filling stations and people are forced to run expensive generators to keep their homes lit.
Pakistan is not producing enough power to meet the growing demand and economists estimate the shortages are shaving 2% off its gross domestic product.
At one time most of the world's hand-stitched leather footballs were made in the town of Sialkot in the Punjab.
It is still a profitable business, but only just.
The power cuts keep production lines idle for hours at a time, orders take longer to make, some have to be flown abroad at great expense to make their deadlines rather than shipped.
"The energy crisis has been here for the last five or six years but it has become very severe over the past couple of years, very very severe," manager Ali Sheikh told Sky News.
"At times it is as if the government is trying to shut industry down altogether. It seems deliberate at times."
Add to that rising unemployment, a negligible tax collection rate, rampant corruption and a security situation that puts buyers off from travelling to Pakistan.
Businessman Asad Bajwa believes many foreigners are now reluctant to visit his factory in Sialkot and orders are down 40%.
But do not write Pakistan off just yet, one leading economist says.
Dr Rashid Amjad , the Vice Chancellor of the Pakistan Institute of Development Economics in Islamabad, said: "The bottom line is we need to revive growth as soon as we can.
"The government has to give it the highest priority and go in for serious economic thinking to ensure macro-economic stability.
"But I still come back to the basic fact that there is a resilience in its people and a resilience in its economy.
"Everybody thinks Pakistan is going to collapse - it never has."
http://news.sky.com/home/world-news/article/16163280
Post a Comment