Pakistan’s LNG transition to halve fuel oil demand by 2020

14 Dec 2017   Pakistan

Pakistan’s fuel oil demand is expected to fall sharply over the next three years as growing LNG imports help the country move to a gas-based energy economy. Fuel oil demand is likely to drop from 9.6 million mt in fiscal 2016-2017, running from July to June, to 4.5 million mt or less by fiscal 2019-2020, according to most of the companies surveyed by S&P Global Platts. The companies surveyed are Pakistan State Oil, the country’s largest fuel oil importer and marketing company, and four Karachi-based brokerage houses — Intermarket Securities, Foundation Securities, Topline Securities and Optimus Capital Management. The most bearish estimate by Optimus Capital Management points to a consumption of 2 million mt/year in fiscal 2018-2019 and 2019-2020, versus the most bullish one by Intermarket Securities at 7.3 million mt in 2018-2019 and 6.5 million mt in 2019-2020. “We were forecasting overall fuel oil demand to witness flat […]

In Lahore, Pakistan, Smog Has Become a ‘Fifth Season’

10 Nov 2017   Pakistan

For nearly two weeks, Lahore, Pakistan’s second-largest city, has been like one huge airport smokers’ lounge. But Abid Omar’s jaw still dropped on Wednesday, when he checked the air-quality monitor he had installed to track the city’s appalling pollution. It said that levels of the dangerous particulates known as PM2.5, small enough to penetrate deep into the lungs and enter the bloodstream, had reached 1,077 micrograms per cubic meter — more than 30 times what Pakistan’s government considers the safe limit. “You can see and smell the smoke all day; you can actually touch the filth,” said Amna Manan, a 26-year-old manager for a multinational company in Lahore, a city of 11 million. “Half the time, I’m scared to breathe in.” While Delhi’s air quality has generated headlines worldwide in […]

Pakistan’s fuel oil circular debt causing power shutdowns in summer peak

11 Jul 2017   Climate, Pakistan

Disruption to Pakistan’s domestic trade flows of fuel oil due to almost $5 billion of circular debt is swelling stocks and causing severe power shutdowns during the country’s peak summer demand season. Fuel oil accounts for close to 40% of fuel consumption in Pakistan’s power sector, which is grappling with increasing load shedding and power cuts, a costly economic fallout for the industrial and manufacturing industries. Circular debt in Pakistan’s energy sector has been an ongoing issue since 2008. Debt-burdened power utilities cannot make timely payments to the country’s oil suppliers, who in turn cannot meet their international payment obligations, leading to a credit crunch and supply disruptions. Power producers are grappling with widespread electricity theft, payment delays and defaults by their customers — including government offices and state-owned companies — and high downstream subsidies that prevent them from recovering the costs of fuel purchases, power generation and distribution. […]

Why Is China Funding Unsustainable Coal Projects In Pakistan?

28 Apr 2017   China, Coal, Pakistan

On April 16th, Chinese investments in Pakistan through the much-vaunted China-Pakistan Economic Corridor (CPEC) were revised upwards, from $46 billion to a whopping $62 billion . The project, part of China’s ambitious Belt and Road initiative to invest in trade routes from Asia to Europe, has huge implications for Pakistan’s development prospects. As part of CPEC, Beijing plans to build new industrial parks, railways, and roads to link its Xinjiang region with Pakistan’s port city of Gwadar. But instead of giving cause for celebration, the colossal Chinese investments heading to Pakistan have sparked massive protests from locals and environmentalists. Why? Because of Beijing’s senseless decision to use part of the funds to build outdated coal power plants. Since Pakistan boasts more than 175 billion tonnes of coal (equal to Saudi Arabia’s oil deposits in terms of heating value), harnessing its energy reserves is crucial to ensure the country’s economic […]

Pakistan Turns to China in Energy Binge

20 Dec 2016   Pakistan

When Prime Minister Nawaz Sharif came to office in 2013, rolling power outages across the country were plunging homes and businesses into darkness for up to 12 hours a day. Now the Pakistani leader is betting on a $21 billion Chinese-backed splurge on energy projects to boost the economy—and his re-election bid. More than 10,000 Chinese workers are now building at least 10 partly Beijing-financed energy projects across Pakistan that are set to grow the country’s energy output by 60% within two years in the first major boost to supply in two decades.Mr. Sharif’s government plans to inaugurate a nuclear plant this month and a pipeline network in January that will carry large-scale gas imports upcountry. “Never in the history of Pakistan has there been such a big package of electricity plants in […]

Iran emerges with claim of Pakistani pipeline interest

5 Nov 2016   China, Iran, Pakistan

Iran once again suggested it was moving forward on plans to build a long-delayed natural gas pipeline to Pakistan, this time with the help of China. An interview published by the official Islamic Republic News Agency quotes Mobin Saulat , named as a managing director for a Pakistani interstate gas system, as saying China is ready to lend a hand in the building what’s left of the pipeline. “As the hurdles in the project are removed we will start receiving gas from Iran,” he said. According to IRNA, a pipeline bureau of a Chinese oil company is investing $1.4 billion in regional terminals for liquefied natural gas and could help financing construction of the Iranian pipeline across the border. Islamabad has worked with […]

China’s Shanghai Electric to Buy Majority Stake in Pakistan Utility

1 Sep 2016   China, Pakistan

China’s state-owned Shanghai Electric Power Co. 600021 3.08 % plans to acquire a controlling stake in Pakistani power utility K-Electric Ltd., in a deal that could be one of the biggest foreign investments in Pakistan’s history. In a notification filed with the Pakistan Stock Exchange Tuesday, Shanghai Electric 600835 -0.05 % said it intends to purchase the 66.4% stake in K-Electric currently held by The Abraaj Group, a Dubai-based investment firm. K-Electric shares, included in the Pakistan Stock Exchange’s benchmark 100-index, closed at 9.21 Pakistani rupees ($0.09) Tuesday, valuing Abraaj’s stake in the utility at 168.9 billion rupees, or $1.6 billion. K-Electric supplies power to Pakistan’s largest city and economic hub, Karachi, home to around 20 million people. The company has a customer base of 2.2 million, and 11,000 employees. The acquisition would be the […]

Pakistan Seals Major LPG Deal with Iran

5 May 2016   Iran, Pakistan

Pakistan and Iran have signed a deal under which the former will import 75,000 tons of liquefied petroleum gas within a year, months after a similar agreement was inked with Qatar. According to the deal, signed by the All Pakistan Liquefied Petroleum Gas Distributors Association and a national Iranian company, at least 6,000 tons of LPG will be imported from Iran every month over the course of a year. In February, Pakistan and Qatar signed a $16-billion liquefied natural gas (LNG) deal which provides imports for 16 years, throwing the authorities in energy-crisis ridden Pakistan a life-line for supplies. The deal signed in Doha by Pakistani Prime Minister Nawaz Sharif and Emir of Qatar Sheikh Tamim bin Hamad bin Khalifa will see Qatar export 3.75 million tons of LNG to Pakistan. This is significant for Pakistan, which faces a 50% supply gap in relation to demand. As concerns the […]

Support builds behind Turkmenistan gas pipeline for Pakistan

Bringing natural gas through a pipeline from Turkmenistan will help address chronic energy shortages in Pakistan, the Asian Development Bank said. ADB officials were on hand for the signing of an investment agreement adopted by shareholders in a company managing the Turkmenistan- Afghanistan -Pakistan-India natural gas pipeline. The initial budget outlines more than $200 million for route surveys and engineering studies. Once those are completed, the ADB said, construction on the artery can begin. Sean O’Sullivan , regional director general for the ADB, said the pipeline would go a long way toward addressing Pakistan’s energy woes. “It will unlock economic opportunities, transform infrastructure, and diversify the energy market for Turkmenistan, and […]

Iran revisiting gas pipeline options with Pakistan

26 Mar 2016   Iran, Pakistan

Cooperation extending into the energy sector is high on the agenda for a two-day state visit to Pakistan, Iranian President Hassan Rouhani said Friday. Rouhani led a delegation of political and economic dignitaries on a two-day visit to Pakistan. Before leaving, the president said at a press conference in Tehran ties in the energy sector could be expanded now that sanctions pressures are easing on the Islamic republic. “Several agreements have been finalized in this respect,” he said. “They will expand to include cooperation in border trade, transit, and security.” The visit is aimed at strengthening bilateral ties that are evolving for Iran with the agreement last year on a multilateral program aimed at […]

Gazprom mulls LNG options for Pakistan

22 Jan 2016   Pakistan, Russia

Russian energy company Gazprom said one of the more promising areas for cooperation with Pakistan was in the field of liquefied natural gas. Gazprom Chairman Alexei Miller hosted a delegation from the Pakistani Energy Ministry in Moscow to discuss the potential for future cooperation . “The parties considered promising areas of cooperation, particularly addressing the possibility of Russian LNG supplies to Pakistan,” the Russian company said in a statement. Islamabad has worked with its counterparts in China on the construction of an LNG terminal and associated pipeline infrastructure at the port city of Gwadar near the Iranian border . The facility, the country’s first, went into service in May 2015. Pakistan consumes most of the natural gas it produces and the country has faced chronic […]

Pakistan moves on gas pipeline funding

22 Dec 2015   Pakistan, Pipelines

The Pakistani government said it’s approved a proposal to deliver funding to help support a multilateral natural gas pipeline stretching east from Turkmenistan. An economic committee, chaired by Pakistani Finance Minster Mohammad Ishaq Dar, approved a proposal to set aside $200 million for the country’s share in a company steering the Turkmenistan- Afghanistan -Pakistan-India, or TAPI, pipeline. “The Economic Coordination Committee also approved release of $12 million out of this share for the preliminary works in four equal tranches starting from January 2016 as per the disbursement plan,” the ministry said in a statement. Turkmenistan is expected to send up to 1.1 trillion cubic feet of natural gas per year to Afghanistan, Pakistan and India for the next 30 years once […]

Pakistan gets $1.4 billion energy loan from ADB

21 Nov 2015   Pakistan

The Asian Development Bank said it was providing more than $1 billion in loans to help Pakistan address chronic power issues in the country. Pakistan’s aging infrastructure means the country lacks a reliable power sector. The ADB described the status of the power sector in Pakistan as “crippling.” The bank approved combined loans of nearly $1.4 billion covering two programs meant to resolve key power sector issues in Pakistan. Most of the initial funding will support advanced metering infrastructure . “Nearly 20 percent of generated electricity is lost due to high technical and commercial losses and measures like the installation of the AMI system are necessary to counter this,” ADB energy specialist Adnan Tareen said in a statement. According to the ADB, Pakistan’s power […]

OMV finds gas in Pakistan

13 Oct 2015   Pakistan

Austrian energy company OMV said a new natural gas discovery in Sindh province in Pakistan means it could potentially boost production in the energy-starved country. OMV announced the discovery of natural gas in the Latif South-1 exploration well in Pakistan. Preliminary testing yielded about 2,500 barrels of oil equivalent per day. “We are very pleased with this exploration success,” Johann Pleininger, an OMV board member in charge of exploration and production, said in a statement. “The appraisal and development of this discovery will potentially enable us to enhance the production in Pakistan.” Pakistan’s aging infrastructure means the country lacks a reliable power sector. The Asian Development Bank last month backed a provisional assistance package of at least $1.2 billion per year on average through a partnership with Pakistan […]

Analyst: Iranian gas no panacea for Pakistan

31 Jul 2015   Iran, Pakistan

Completing a natural gas pipeline from Iran won’t be the “silver bullet” expected by the government in Islamabad, analysis finds. Iran, the five permanent members of the U.N. Security Council, plus Germany, finalized a deal July 14 that restricts Tehran’s nuclear ambitions in exchange for relief from sanctions targeting its energy sector. For Iran, it may open the spigot on natural gas reserves , which could help address chronic energy shortages in neighboring Pakistan. Oliver Coleman, deputy head of Asia programs at analytical firm Verisk Maplecroft, said in a briefing that while both sides of the pipeline have lauded its benefits , it won’t address the long-term issue completely. “A steady supply of gas from Iran would not be a […]

Iran working to renew gas pipeline interest

22 Jul 2015   Iran, Pakistan

 A project once dubbed the Peace Pipeline could see new life with Chinese and Indian investors working in a post-sanctions Iran, a Pakistani official said. Salman Shah, a former Pakistani finance minister, told the official Islamic Republic News Agency he expected renewed interest in a gas pipeline running east from Iran. “China and India will probably join the … network,” he was quoted as saying in a Tuesday interview. “Once the gas starts flowing, India will like to join it and China has already expressed its willingness for joining the project.” IRNA earlier this week quoted Pakistani Energy Minister Shahid Khaqan Abbasi as saying last week’s nuclear deal with Iran meant Islamabad had more options to address lingering energy needs. Pakistan’s aging infrastructure means […]

Is Iran’s gas on tap for Pakistan?

21 Jul 2015   Iran, Pakistan

If sanctions are removed in full, Pakistan could in theory move forward with implementing a bilateral natural gas pipeline project with Iran. Once dubbed the Peace Pipeline, and including India as the terminal country, Iran has long held out its gas reserves as an opportunity for Eastern trading partners. Washington and its Western allies, however, have backed a rival project that would stretch from one of the world’s largest natural gas fields in Turkmenistan through Afghanistan, Pakistan and India. For Pakistan, sanctions targeting Iran’s energy sector meant it was time to reconsider the pipeline project. “Removal of sanctions will facilitate us in meeting our commitments and addressing our energy needs,” Pakistani Energy Minister Shahid Khaqan Abbasi was quoted as t elling the […]

Death Toll From Karachi, Pakistan, Heat Wave Tops 800

25 Jun 2015   Pakistan

The temperature was still searingly high on Wednesday — 98 degrees Fahrenheit, or 37 degrees Celsius — but at least it was dropping. It had been as high as 113 degrees Fahrenheit, or 45 degrees Celsius. Health and rescue officials said the number of deaths, which surpassed 800 during the four days that the merciless heat wave gripped this southern port city, had also fallen on Wednesday. “Today was a lot better,” said Anwar Kazmi, a spokesman for the Edhi Foundation , which runs an ambulance service and Karachi’s largest morgue. “We’ve had 58 deaths today, compared to yesterday when the death toll rose to 300.” Meteorologists said Karachi’s weather should improve in the days ahead. “There won’t be heavy rains, but there are chances of light […]

Karachi Heat Wave Death Toll Tops 650 During Ramadan Fast

24 Jun 2015   Climate, Pakistan

Karachi’s poor learned long ago to cope with the many adversities that afflict Pakistan’s most crowded and chaotic city, including flooding, street violence and political crises. But since a suffocating heat wave descended on Karachi three days ago, killing at least 650 people, they have found no respite and no escape. “It’s so hot,” said a security guard, Shamim ur-Rehman, 34, as he sat on a cot, looking beleaguered. “There is no fan, there is nothing. I can’t sleep at night or during the day.” Prime Minister Nawaz Sharif declared an emergency on Tuesday as the death toll from the heat wave soared, with overwhelmed hospitals struggling to treat a surge of casualties and morgues filling to capacity. The army set up emergency treatment centers in the streets and the provincial government closed schools and city offices. The Edhi Foundation , which runs an ambulance service […]

Pakistan calls for urgent measures as heatwave toll tops 450

23 Jun 2015   Climate, Pakistan

Pakistan’s prime minister called for emergency measures as the death toll from a heatwave in southern Sindh province topped 450. The National Disaster Management Authority (NDMA) said it had received orders from Nawaz Sharif to undertake immediate response measures. The army has also been deployed to set up heat stroke centres and assist the NDMA, it added. Many of the victims are elderly people from low income families. The death toll from the heatwave has risen above 450 Health officials say many deaths have been in the largest city, Karachi, which has experienced temperatures as high as 45C (113F) in recent days. Hundreds of patients suffering from the effects of the heatwave are being treated at government hospitals, provincial health secretary Saeed Mangnejo said. The demand for electricity for air conditioning has coincided with increased power needs over Ramadan, when Muslims fast during daylight hours. Hot weather is not […]

China’s President Heads to Pakistan With Billions in Infrastructure Aid

20 Apr 2015   China, Pakistan

 China ’s president, Xi Jinping , travels to Pakistan on Monday laden with tens of billions of dollars in infrastructure and energy assistance on a scale the United States has never offered in the past decade of a close relationship, a gesture likely to confirm the decline of American influence in that nation. Mr. Xi, making his first overseas trip this year, and the first by a Chinese leader to Pakistan in nine years, will arrive fortified from the robust reception to the new China-led Asian Infrastructure Investment Bank , and is looking to show that China can make a difference in a friendly, neighboring country troubled by terrorism. Pakistani officials say that Mr. Xi will be signing accords for $46 billion […]

China to Build Pipeline From Iran to Pakistan

9 Apr 2015   Pakistan

China will build a pipeline to bring natural gas from Iran to Pakistan to help address Pakistan’s acute energy shortage, under a deal to be signed during the Chinese president’s visit to Islamabad this month, Pakistani officials said. The arrival of President Xi Jinping is expected to showcase China’s commitment to infrastructure development in ally Pakistan, at a time when few other countries are willing to make major investments in cash-strapped, terrorism-plagued, Pakistan. The pipeline would amount to an early benefit for both Pakistan and Iran from the framework agreement reached earlier this month between Tehran and the U.S. and other world powers to prevent Iran from developing nuclear weapons. The U.S. had previously threatened Pakistan with […]

Pakistan says Saudi-led coalition in Yemen wants troops

6 Apr 2015   Pakistan, Yemen

Pakistan’s defense minister says a Saudi-led coalition targeting Shiite rebels in Yemen wants it to contribute ground troops. The comments Monday by Defense Minister Khawaja Muhammad Asif come as Pakistan’s parliament debates whether to contribute militarily to the campaign against the rebels, known as Houthis. Pakistan has offered its verbal support for the mission. Days of airstrikes have yet to dislodge the Houthis from territory they hold across Yemen, the Arab world’s poorest country. That’s led to speculation that there could be a ground operation launched in Yemen. Asif says Saudi Arabia also asked for aircraft and naval ships for the campaign. The Saudi-led campaign entered its 12th day Monday, targeting rebels who took over the capital, Sanaa, in September and eventually forced President Abed Rabbo Mansour Hadi to flee.

Outcry and fears grow as Pakistan builds new nuclear reactors

9 Mar 2015   Pakistan

The Karachi Nuclear PowerComplex is on an earthquake-prone seafront less than 20 miles from downtown Karachi. (Max Becherer/Polaris Images for The Washington Post) KARACHI, Pakistan — World leaders have fretted for years that terrorists may try to steal one of Pakistan’s nuclear bombs and detonate it in a foreign country. But some Karachi residents say the real nuclear nightmare is unfolding here in Pakistan’s largest and most volatile city. On the edge of Karachi, on an earthquake-prone seafront vulnerable to tsunamis and not far from where al-Qaeda militants nearly hijacked a Pakistan navy vessel last fall, China is constructing two large nuclear reactors for energy-starved Pakistan. The new reactors, utilizing a cutting-edge design not yet in use anywhere in the world, will each provide 1,100 megawatts to Pakistan’s national energy grid. They are being built next to a much […]

Iran-Pakistan gas pipeline not abandoned

Iran-Pakistan gas pipeline not abandoned thumbnail The Pakistani commerce minister says the country has not abandoned the Iran-Pakistan (IP) gas pipeline project, which is scheduled to provide Pakistan with Iranian natural gas. Pakistan will pursue the IP project after the removal of anti-Iran sanctions, the Express Tribune quoted Khurram Dastgir Khan as saying in a Saturday report. “A gas pipeline that is going to be laid from [the Pakistani port city of] Gwadar to [the port city of] Nawabshah can be extended by 11 kilometers to Iran,” the minister said. Iran and Pakistan signed an agreement for the construction of the gas pipeline in 1995. Later, Iran made a proposal to extend the pipeline from Pakistan into India. In February 1999, an accord between Iran and India was signed. But due to the US pressure, India withdrew from the project in 2009. Iran has already built its 900-kilometer share […]

Pakistan gets ADB loan for LNG port facility

28 Feb 2015   Pakistan

The Asian Development Bank said Friday it was supporting efforts to help Pakistan build its first liquefied natural gas terminal with a $30 million loan. Pakistani company Engro Corp. will get funding from the ADB to build the regasification terminal at a port near Karachi. The plant will be able to convert as much as 3 million tons of LNG per year to gas for use in state power plants. ADB investment specialist Mohammed Azim Hashimi said the loan would help Pakistan build a cleaner, more efficient and more diverse power sector . “Pakistan urgently needs to utilize its existing power generation capacity fully, while reducing its reliance on costly imported diesel fuel for electricity generation,” he said in a statement. […]

A Thirsty, Violent World

25 Feb 2015   Pakistan

Angry protesters filled the streets of Karachi last week, clogging traffic lanes and public squares until police and paratroopers were forced to intervene. That’s not rare in Pakistan, which is often a site of political and religious violence. But last week’s protests had nothing to do with freedom of expression, drone wars, or Americans. They were about access to water. When Khawaja Muhammad Asif, the Minister of Defense, Power, and Water (yes, that is one ministry), warned that the country’s chronic water shortages could soon become uncontrollable, he was looking on the bright side. The meagre allotment of water available to each Pakistani is a third of what it was in 1950. As the country’s population rises, that amount is falling fast. Dozens of other countries face similar situations—not someday, or soon, but now. Rapid climate change, population growth, and a […]

Pakistan Close to Agreement With Qatar Over LNG Supplies for Power Plants

Pakistan is close to striking a long-term deal worth potentially $22.5 billion or more to import liquefied natural gas to help fuel the country’s power stations and ease its crippling electricity crisis, Pakistan’s top energy official said. “We are negotiating with Qatar and a few other sources,” said Pakistani Petroleum Minister Shahid Khaqan Abbasi in an interview with The Wall Street Journal. “The deal will be very competitive and very beneficial for Pakistan.” An agreement with Qatar is expected by early March, Pakistani officials say. Pakistani Prime Minister Nawaz Sharif came to office in May 2013 on a pledge to reduce the country’s electricity shortages, which see power regularly cut to homes and businesses for eight or more hours a day. Tackling the electricity deficit, however, has thus far largely eluded Mr. Sharif’s government. The government has promised to eradicate the electricity shutdowns, known as load shedding, by the […]

Pakistan Braces for Major Water Shortages

13 Feb 2015   Climate, Pakistan, Water

Energy-starved Pakistanis, their economy battered by chronic fuel and electricity shortages, may soon have to contend with a new resource crisis: major water shortages, the Pakistani government warned this week. A combination of global climate change and local waste and mismanagement have led to an alarmingly rapid depletion of Pakistan ’s water supply, said the minister for water and energy, Khawaja Muhammad Asif. “Under the present situation, in the next six to seven years, Pakistan can be a water-starved country,” Mr. Asif said in an interview, echoing a warning that he first issued at a news conference in Lahore this week. The prospect of a major water crisis in Pakistan, even if several years distant, offers a stark reminder of a growing challenge in other poor and densely populated countries that are vulnerable to global climate change. In Pakistan, it poses a further challenge to Prime […]

What is driving Pakistan’s fuel crisis?

28 Jan 2015   Pakistan

The shortage of imported oil began some two weeks ago, with affected areas almost grinding to a halt. Across the country, many buses have been taken off the streets, and scuffles have broken out at gas stations where people wait in long queues for fuel. Although the situation has eased slightly, the crisis prompted Prime Minister Nawaz Sharif to pull out of last week’s World Economic Forum meeting in Davos. Pakistan has to deal with chronic power cuts, and tackling the energy issue was one of Sharif’s main campaign pledges ahead of the 2013 general election. The situation was recently exacerbated by an apparent rebel attack on a key power line which plunged around 80 percent of the South Asian country into darkness over the […]

Rebels Tied to Blackout Across Most of Pakistan

26 Jan 2015   Pakistan

Towns and cities across Pakistan plunged into darkness early Sunday when what officials said was an attack by militants on a transmission line short-circuited the national electricity grid, presenting a new indictment of the government’s faltering efforts to solve the country’s chronic power crisis. Emergency efforts to end the blackout, widely described as Pakistan ’s worst ever, resulted in a partial restoration of power in the capital, Islamabad, and the most populous city, Karachi, by Sunday evening. Even so, 80 percent of the country remained without power, including the provincial capitals of Lahore, Peshawar and Quetta, an official said. The minister for water and power, Khawaja Muhammad Asif, blamed separatist rebels in the western province of Baluchistan who, he said, had blown up a critical transmission line. But experts said the attack only highlighted the growing vulnerability of Pakistan’s power grid, which has come under severe […]

Pakistan Fuel Shortage Crisis Forces Sharif to Cancel Davos Trip

24 Jan 2015   Pakistan

Pakistani Prime Minister Nawaz Sharif canceled a trip to attend the World Economic Forum in Davos, Switzerland, as the nation’s worst fuel shortages in memory threatened to revive street protests against him. Since the crisis began last week, he’s suspended five officials, including Pakistan State Oil Co.’s deputy chief, and has sought hourly updates on the situation. The government has sold fuel from its reserves and private companies have boosted supplies as anger grows over long waits at petrol stations. The cash-strapped distributor’s move this month to reduce shipments by 80 percent left it unable to meet a surge in demand after the government cut gas prices to match lower global costs. The Finance Ministry has arranged emergency funding to import oil, Power Minister Khawaja Asif said in a Jan. 21 text message. The crisis is a test of Pakistan’s credibility in the eyes of overseas investors, whose fivefold […]

State of denial: Power ministry denies fuel shortage for electricity

23 Jan 2015   Pakistan

In yet another sign of a lack of coordination within the government, the water and power ministry on Wednesday denied that there was a fuel shortage at power plants, claiming that power generation companies had 10 days’ worth of fuel inventory. A spokesperson for the ministry said that there was little possibility of the power crisis worsening, adding that the ministry was prepared to handle all contingencies. The statement from the water and power ministry appears to be a response to allegations leveled against them by Finance Minister Ishaq Dar at his press conference on Monday. Dar had placed the responsibility for the recent petrol shortages squarely on the petroleum ministry and water and power ministry. The statement from the ministry also contradicts the account that Finance Secretary Waqar Masood gave in […]

Pakistan’s Sharif pulls out of Davos amid fuel crisis

23 Jan 2015   Pakistan

Politicians are arguing over the cause of the petrol shortages Related Stories Pakistan’s Prime Minister Nawaz Sharif has pulled out of the World Economic Forum (WEF) meeting in Switzerland to tackle nationwide fuel shortages. Petrol stations in most major cities closed temporarily last week, and drivers elsewhere face huge queues. Ministers blame a huge spike in demand for the shortage, but critics say it was caused by government incompetence. Mr Sharif held a crisis meeting earlier and promised to punish those causing the problems. It is the second year running that the prime minister has pulled out of the WEF in Davos. Last year he was forced to cancel the trip because of a Taliban attack. Opposition demonstrations Pakistan has faced intermittent fuel crises for years, and Mr Sharif promised during the 2013 election to resolve the issues. Opposition supporters say government incompetence is the real cause But last […]

Fuel Shortages Show Pakistani Struggle to Cope With Oil’s Drop

22 Jan 2015   Pakistan

As motorists around the world enjoy the lowest fuel prices in five years thanks to surging production, Pakistanis are struggling to fill up their tanks. Pakistani Prime Minister Nawaz Sharif is racing to tackle one of the nation’s worst fuel shortages in recent memory. Since the crisis began last week, he’s suspended five officials, including Pakistan State Oil Co.’s deputy chief, and has sought hourly updates on the situation. The cash-strapped distributor’s move this month to reduce shipments by 80 percent left it unable to meet a surge in demand after the government cut gas prices to match lower global costs. The Finance Ministry has arranged emergency funding to import oil, Power Minister Khawaja Asif said in a text message yesterday. The crisis is a test of Pakistan’s credibility in the eyes of overseas investors, whose fivefold increase in purchases of the nation’s shares resulted in Asia ’s second-highest […]

Pipeline to Pakistan still viable, Iran says

26 Nov 2014   Pakistan

“Pakistan has signed a deal to import 760 million cubic meters of natural gas per day from Iran and by the beginning of 2015, it should start receiving this amount of gas according to agreement,” Oil Minister Bijan Zanganeh said. Once dubbed the Peace Pipeline, and including India as the terminal country, Iran has long held out its gas reserves as an opportunity for Eastern trading partners. Washington and its Western allies, however, have backed a rival project that would stretch from one of the world’s largest natural gas fields in Turkmenistan through Afghanistan, Pakistan and India. For Pakistan, sanctions targeting Iran’s energy sector meant it was time to reconsider the pipeline project. Government officials told Pakistani media outlets they were declaring force majeure on the pipeline , meaning it […]

Pakistan looks for exit door with Iranian gas pipeline

26 Nov 2014   Pakistan

The Pakistani government has invoked force majeure on an agreement to build a cross-border gas pipeline with Iran, a ministry official said Tuesday. A senior official inside the Pakistani Ministry of Petroleum and Natural Resources told the Pakistan Observer the government in Islamabad wanted to avoid litigation because of its decision to back away from a pipeline clouded by U.S. sanctions targeting Iran’s energy sector. “We have stepped up our efforts to get the gas deal changed and are in touch with authorities concerned in Iran and hopeful to get to result oriented talks some time in next month to resolve the issue amicably,” he said. Once dubbed the Peace Pipeline, Iran aims to establish a new natural gas route eastward with its cross-border pipeline to […]

Kabul, Islamabad pursue gas pipeline connections

18 Nov 2014   Pakistan

Islamabad agrees with Kabul to put renewed focus on multilateral natural gas pipeline. UPI/Hamid Forotan ISLAMABAD, Nov. 17 (UPI) — Islamabad thanks the leadership in Kabul for putting renewed emphasis behind a multilateral gas pipeline from Turkmenistan, the Pakistani prime minister said. Representatives from Turkmenistan, Afghanistan , Pakistan and India met last year in Ashgabat, the capital of Turkmenistan, to sign a transaction advisory services agreement. That cleared the way for the Asian Development Bank to look for a consortium to find the money needed to build the $7.8 billion pipeline. Pakistani Prime Minister Nawaz Sharif met Saturday with visiting Afghan President Ashraf Ghani to discuss regional energy and trade initiatives, including TAPI. “We reaffirmed our resolve to forge a robust economic partnership – by expanding trade, promoting investment, improving infrastructure, building road and rail links and enhancing energy collaboration,” he said. Pakistan and India would each get 1.3 […]

Iran determined to move ahead with pipeline to Pakistan

20 Oct 2014   Iran, Pakistan

Despite reports the project has been abandoned, the Iranian government said it was determined to push ahead with a gas pipeline for Pakistan.  “Tehran and Islamabad are determined to implement their gas exports contract and a Pakistani delegation will travel to Iran soon to expedite construction of the gas export pipeline to Iran,” the Oil Ministry announced Sunday.

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Pakistan courting LNG suppliers

25 Jul 2014   Pakistan

A report Thursday from the Platts energy news service says Pakistan is on the cusp of receiving liquefied natural gas supplies from international companies. Platts reported an unnamed official in the Pakistani Ministry of Petroleum said 12 international companies have expressed interest in supplying Pakistan with as much as 40 million cubic feet of LNG per year. State-owned import company Pakistan State Oil solicited interest for LNG shipments in May. Pakistan doesn’t import LNG, but said Monday it was getting China’s help with the construction of a LNG terminal and associated pipeline infrastructure at the port city of Gwadar near the Iranian border. Islamabad estimates the pipeline could cost $1 billion, with another $2 billion need for the LNG terminal. The poor state of the nation’s energy infrastructure is leaving it short on energy supplies, the government said. Pakistan and Qatar signed a memorandum of understanding for LNG supplies […]

Pakistan working with China on gas needs

22 Jul 2014   Pakistan

Pakistan’s government said Monday it was getting China’s help with the construction of a liquefied natural gas terminal and associated pipeline infrastructure. The Ministry of Petroleum and Natural Resources said it consented to the construction of an LNG terminal for the port city of Gwadar near the Iranian border. An associated pipeline would be built through a government-to-government arrangement. “We are running from pillar to post to get this mega LNG terminal-cum-pipeline included in the list of early harvest projects agreed with China,” Pakistani Natural Resources Minister Shahid Khagan Abbasi told The News , a Pakistani newspaper. “It will take three to four years to get commissioned.” The minister said the pipeline would cost an estimated $1 billion and more than $2 billion would be needed for the LNG terminal. The Pakistani government has said aging infrastructure in the country is leaving it short on energy supplies. Sanctions on […]

MOL makes big oil find in Pakistan

11 Jun 2014   Pakistan

Hungarian energy company MOL said Tuesday it made an oil discovery in an area in Pakistan close to estimated reserves of 22 million barrels. MOL, though the Ghauri joint venture, said it made an oil discovery at the Ghauri X-1 well in Punjab province in Pakistan . It reached a total test flow rate of 5,500 barrels per day and the Hungarian group said initial estimates of the oil in place could be significant. In the vicinity, the company said , the estimate of reserves in place is 22 million barrels. Oil production from the site could come on stream as early as this month. The Pakistani Ministry of Petroleum and Natural Resources said total oil production from 2012-13 averaged just over 70,000 bpd. The government says it needs to explore, develop and exploit its petroleum resources in order to rely less on foreign supplies to meet its energy […]

Pakistan needs Iran’s gas, envoy says

13 May 2014   Iran, Pakistan

Pakistan’s energy sector is in such disarray that it has few choices apart from a natural gas pipeline from Iran, the former Iranian envoy to Pakistan said. Ambassador Mohammad Ebrahim Taherian told Iran’s semiofficial Fars News Agency there are rivals to a pipeline clouded by sanctions imposed on Iran’s energy sector. “Owing to the grave conditions of energy (supply and demand) in Pakistan, some of the country’s major cities spend half of the day without electricity, meaning that Pakistan’s need to energy is real and inevitable,” he said Sunday. Iran last year pulled out of a finance deal for Pakistan because of sanctions pressure. Pakistan was slated to get 21 million cubic feet of natural gas per day from the Iranian pipeline. The U.S. government supports a rival pipeline that would deliver natural gas to Pakistan from Turkmenistan. Last year, Washington said it was negotiating […]

Pakistan cuts gas supply to industry, CNG pumps to curb blackouts

8 May 2014   Pakistan

Pakistan plans to cut natural gas supply by around 150,000 Mcf/d to fertilizer plants and CNG pumps to increase electricity supply to cities facing daily rolling blackouts, according to officials in the power and oil ministries. The ministries decided to reduce the duration of load shedding in the eastern Punjab province, where daily power outages last 10-14 hours, the two sources said on condition of anonymity. Pakistan’s fertilizer sector previously consumed about 600,000 Mcf/day of gas, and CNG pumps use about 400,000 Mcf/day. On Thursday, the government started reducing gas supply to fertilizer plants by 50,000-75,000 Mcf/d, with the remainder of the cuts coming soon, the sources said. The plan is expected to generate about 600 MW, still well below the 4 GW shortfall. Pakistan’s overall electricity output stands at 11.5 GW, about 74% of total demand of 15.5 GW, the sources said. Hydropower […]

Pakistan frustrated with gas import options

Pakistan’s former petroleum secretary expressed doubts about gas supplies from neighbors but the government said Iranian negotiations could bring relief. Gulfraz Ahmad told delegates at an energy forum in Islamabad the U.S. government’s nuclear energy assistance to India partly derailed a trilateral gas pipeline from Iran, the Pakistani newspaper Express Tribune reported Friday “After withdrawal of U.S. forces from Afghanistan , I fear Washington will again be opposing TAPI pipeline following a shift in its policies,” he was quoted as saying. TAPI refers to the Turkmenistan-Afghanistan-Pakistan-India natural gas pipeline, which the United States has backed in favor of the Iranian gas pipeline. Foreign Office spokeswoman Tasnim Alsama was quoted by rival newspaper the Nation, however, as saying waning sanctions pressure on Iran could breathe new life into that pipeline option. “We hope that the process [nuclear negotiations with Iran] would lead to successful settling […]

Asians concerned about future of energy: study

5 Feb 2014   Pakistan

Energy shortages and higher energy prices are among the chief concerns of people surveyed in nine Asian countries, a study commissioned by Shell indicates. Shell Pakistan, in a news release Tuesday announcing the findings of the “Future Energy Survey,” noted that by 2030, the world will require 40 percent to 50 percent more energy, water and food, amid rising demand and increasing population. The study by Paris-based market research firm Ipsos involved 8,446 participants in nine Asian countries — Brunei, Korea, India, Indonesia, Pakistan, Philippines, Singapore, Thailand and Vietnam — from January to December 2013: Specific concerns revealed by the survey, Shell says, include: 91 percent of respondents in Thailand and 70 percent in South Korea cited energy shortages as a chief concern; 91 percent of respondents in India and 79 percent of respondents in Singapore cited higher energy prices; in Vietnam, water shortages […]

Pakistani official says Iranian gas line slowed by funding issues

18 Jan 2014   Pakistan

 Slow development of a gas pipeline from Iran to Pakistan is caused by funding issues, not pressure from the United States, a Pakistani official said. “The gas pipeline is a bilateral issue between Pakistan and Iran,” Foreign Ministry spokeswoman Tasnim Aslam said during a Thursday news briefing. Pakistan says a pipeline from Iran could help offset an energy shortage brought on by aging infrastructure and a crumbling energy sector. Envisioned more than a decade ago as a pipeline that could reach to India, the project has come up against pressure from Western powers concerned about its benefits to Iran. Aslam said the development was plagued more by the lack of funding than by pressure from any foreign government. “The progress on pipeline has been slow because of the funding issues and not because of the United States,” she said. Pakistan could get 21 million […]

Pakistan’s Oil & Gas to Boost Supply as Deficit Hurts Growth

17 Jan 2014   Pakistan

 Oil & Gas Development Co., Pakistan ’s biggest energy explorer, will boost gas output from existing fields by a third in the next 12 to 18 months as energy shortages hamper growth and shut factories. “We are working on six projects and expect to increase gas supplies by about 350 million cubic feet a day,” Chief Executive Officer Muhammad Riaz Khan said in an interview yesterday. “The major portion of gas would come in this financial year” which ends June 30, he said. New supply is needed to ease gas shortages that widened to about 2 billion cubic feet a day during peak hours this winter causing social unrest and shutting factories in the nation of over 196 million people. Pakistan’s production of natural gas has plateaued since 2008, the country’s central bank said in a report yesterday. Gas from existing reservoirs of Kunnar Pasakhi Deep, […]

Pakistan has sanctions jitters over Iranian gas pipeline

8 Jan 2014   Pakistan

A planned natural gas pipeline from Iran isn’t protected from Western economic sanctions, the Pakistani Ministry of Petroleum and Natural Resources said. A Pakistani Senate committee was told by the ministry that relaxed sanctions that came as a result of last year’s interim nuclear deal with Iran didn’t extend to a planned natural gas pipeline from Iran, Pakistani newspaper Dawn reported Tuesday. Pakistan says its aging infrastructure has left it with a crumbling energy sector and a subsequent need for an external source of natural gas. Petroleum Minister Shahid Khaqan Abbasi said companies normally slated for pipeline construction on the Pakistani side of the border would likely face sanctions once the work began. Iran says it has the pipeline completed on its side of the border. The Pakistani government said it wants to meet with its Iranian counterparts to discuss the issue later this […]

Exclusive: China commits $6.5 billion for Pakistani nuclear project

24 Dec 2013   Nuclear, Pakistan

China has committed $6.5 billion to finance the construction of a major nuclear power project in Pakistan’s port city of Karachi as it seeks to strengthen ties with its strategic partner, Pakistani officials said. Pakistani Prime Minister Nawaz Sharif broke ground on the $9.59 billion project last month but officials have provided few details of how they plan to finance it. Financing documents seen by Reuters showed China National Nuclear Cooperation (CNNC) has promised to grant a loan of at least $6.5 billion to finance the project which will have two reactors with a capacity of 1,100 megawatts each. Two members of the government’s energy team and three sources close to the deal confirmed this. CNNC was not available for comment. “China has complete confidence in Pakistan’s capacity to run a nuclear power plant with all checks in place,” said Ansar Parvez, chairman of the Pakistan […]