Category Archives: Industry News

Pakistan to Start Receiving Oil from Saudi Arabia on Credit Facility Next Month

As part of the Saudi financial package aimed at baling Pakistan out of its current financial crisis, the country is expected to start receiving oil from the Kingdom on deferred payment in January.

Media reports said that the agreement regarding the facility has been completed and a revised draft has been sent to Riyadh for signature.

A report in the local media said technical issues regarding the agreement has been worked out and that the other aspects will be finalized by the second week of next month. After that, the deal will be signed by ministers of both the countries.

As per the proposed agreement, Pakistan will receive up to $3 billion worth of oil with payment deferred for 365 days in the first year of the agreement in 2018. The Saudi Fund for Development will act as a third party in the agreement.

Pakistan based refineries will place orders with Saudi Aramco — a government-owned company —for supplying crude oil. Pakistan has a long-term contract with Aramco for supplying 110,000 barrels per day (bpd). Of these, Pak Arab Refinery Ltd (Parco) has a quota of 60,000bpd while the remaining quota of 50,000bpd is allocated to National Refinery Limited (NRL).

Both Parco and NRL will place orders for import with Aramco. The Saudi Development Fund will pay in dollars to Aramco. However, these refineries will deposit an equivalent amount in Pak rupee with State Bank (SBP) here in Pakistan.

The SBP will begin repayments to the Saudi Development Fund 12 months later, with monthly payments. For example, the January 2019 payment will be made in January 2020.

This arrangement will be in place for a period of three years, with oil imports worth $9 billion.


Sindh energy dept resolves to address investor concerns on wind energy projects

The Sindh government has held out the firm assurance that it could do its best to resolve, in the shortest possible time, the key issues of investors doing wind energy projects in the province to prove that Pakistan is fully capable of utilising its massive potential to generate clean electricity through renewable energy means.

The assurance to this effect came from the Sindh Government Additional Chief Secretary of Dr Tanveer A Qureshi who is currently heading the provincial Energy Department as he spoke at a consultative session attended by managers and investors of wind energy projects in the province.

The Energy Update organised the session as a brainstorming session for its upcoming event i.e. Third International Wind Energy Summit that will be held in Karachi on October 4, 2018.

The consultative session was organised at a time when production from 20 operational wind power projects in Sindh has gone up to 1037 Megawatts while by November 2018 another 200 MW of clean energy would be added to the national grid through completion of four more wind energy plants. Some 35 wind projects are in different stages of development in the province that could generate up to 2500 MWs of more clean electricity.

One of the key problems being faced by the prospective investors keen to launch new wind energy projects in Sindh is the pending issue of leasing of the land in the Gharo-Jhimpir wind corridor of the province as the provincial government has the fullest resolve to solve the lease issue as early as possible in the best interest of the concerned investors.

In this regard, the Board of Revenue of Sindh Government is soon going to convene a top-level meeting to resolve the land lease issue of prospective investors of wind energy projects as the session would consider this issue as per directives of the apex judiciary.

Sindh additional chief secretary for Energy while speaking on the occasion acknowledged that previously the government could not give equal emphasis on all the facets of the energy sector as issues of the energy sector investors including those willing to do alternative power projects lingered on.


Pakistan on the verge of becoming one of the top 10 oil producing countries in the world

Islamabad – We may be on the verge of discovering massive oil reserves in Pakistan, according to the caretaker minister for maritime and foreign affairs, Abdullah Hussain.

Mr. Hussain mentioned that ExxonMobil, the US-based energy company, is on the verge of discovering huge oil reserves close to the Pakistan-Iran border, which may be even bigger than Kuwait’s reserves.

The minister said this while addressing Federation of Pakistan Chambers of Commerce and Industry (FPCCI). ExxonMobil has currently drilled up to 5000 meters near the Iranian border and is thoroughly optimistic about the oil reserve discovery.

Top 10 Oil Producers in The World
If the reserves do turn out to be as massive as expected, it will put Pakistan among the top 10 oil producing countries, at the 6th position above Kuwait.

Currently, Kuwait possesses 8.4% of the world’s oil reserves and claims that they have nearly 101.5 billion barrels of crude oil. The country also owns 2.5 billion barrels in the Saudi-Kuwaiti neutral zone.

Govt’s Stance
Mr. Hussain said that the government has already forged an agreement with ExxonMobil for a $10 billion “generation complex”. He said,

They are also putting up an LNG berth at Port Qasim, the second seaport in Karachi. They have already paid for the drilling rights in Pakistan. Pakistan is providing a level playing field to foreign investors and they are interested in coming to Pakistan. What we need to do is to meet their standards and attract them to make investment.

ExxonMobil made the headlines earlier in May 2018, when the company acquired a 25% stake in offshore drilling in Pakistan. The agreement was inked at Prime Minister’s Secretariat between Oil and Gas Development Corporation, Government Holding Private Limited PPL and Eni.

Could Substantially Reduce Our Import Bill
It should be noted that most of Pakistan’s import bill is based on oil imports. The country only manages to meet 15% of its demand through locally produced crude oil, which is around 22 million tons, while the other 85% is imported.

Current account deficit for Pakistan stands at $18 billion. Pakistan’s imports stood at $12.928 billion in the July-May 2017-18 period for the last fiscal year.

This discovery alone has the potential to solve one of the biggest problems Pakistan currently faces. We’ll have to wait and see if ExxonMobil’s prediction actually pans out.



Karot Hydropower station to be completed by 2021

Work on the 720 Mega Watt Karot Hydropower Station is going on smoothly and the project is likely to be completed by end of 2021.

The project which is a part of China Pakistan Economic Corridor (CPEC) is to be completed at a cost of US$1420 million. According to official sources, the land acquisition award had already been done and the financial close of the project was achieved on February 2, 2017.

The 25 percent civil works of the project has been completed as construction of access road/bridge, concrete batching plant, diversion tunnel and spillway is in process. The project is located at River Jhelum in Azad Jammu and Kashmir and Punjab.

It is the fourth among the five cascade hydropower projects being developed along the Jhelum River. The sources added that its structure layout includes rock-fill dam, spillway, powerhouse, diversion tunnels, head race power tunnels and tail race tunnel.

The project was being developed on Build-Own-Operate-Transfer basis with five years construction period and 30 years concession period. Karot Hydropower Project, executed by Karot Power Company (Pvt.) Limited, has been listed as one of the prioritized projects under the CPEC.

The project’s main sponsor, China Three Gorges (CTG) South Asia Investment Limited, is an investment arm of CTG Corporation in South Asia, the sources added. The construction of the project has also provided employment to more than 2,000 people.


40 MW waste to energy plant approved in Lahore

In line with its efforts to promote renewable and indigenous resources for power generation, Pakistan’s National Electric Power Regulatory Authority (NEPRA) has approved the development of a 40 MW waste to energy plant.

The authority has granted a generation licence to Lahore Xingzhong Renewable Energy Company (Private) Limited to construct the waste to energy power plant at Lakhodair in Lahore.

According to NEPRA the project will deploy state of the art waste to energy technology to process some 2000 tonnes of municipal solid waste per day.

In a statement, the authority added that using the city’s municipal solid waste to generate electricity seems to be a “silver bullet to address the municipality’s waste and energy needs”.

In this regard, NEPRA has already announced a Competitive Upfront Tariff of US Cents 10.007/kWh for waste to energy projects based on 25 years operational period, with overall capacity cap of 250 MW wherein share of each province and Federal Territory have been kept at 50 MW each.

It added that the successful implementation of this project will pave the way for other such initiatives to solve pressing waste disposal problems and challenges of limited space for landfills and gas emissions resulting cleaner cities and healthy life.