Import of LNG faces fresh hurdles

ISLAMABAD: Controversies over the import of liquefied natural gas (LNG) seem to be a never-ending game even after the passage of five years and an expenditure of $5 billion in additional oil imports.

A fresh tender for the import of 500 million cubic feet of LNG has been questioned at the very outset by former and prospective bidders. They see the request for proposals (RFP) sought by Inter State Gas Systems (ISGS) in conflict with the country’s procurement rules and apparently favouring a single party.

Simultaneously, a controversy is still brewing among the board of directors of Sui Southern Gas Company over the reported cancellation on Aug 17 of another tender for 500mmcfd of LNG in which a single bid was evaluated.

Informed sources said an influential group within the SSGC board was now questioning the majority decision of cancellation of bidding results of LNG Retrofit project and trying to call a fresh board meeting to undo an earlier decision taken by it with a vote of 6 to 5. The other group is reported to have decided to provide recording of the proceedings to courts of law.

Documents available with Dawn suggest that a major contender to most of the previous LNG biddings has openly questioned the tender issued by ISGC that seemed to be on behalf of SSGCL.

“The RFP lacks clarity on the procuring agency for the LNG services and the roles of SSGC and ISGS”, said Global Energy International in a letter to ISGS — a public sector company set up for natural gas import projects.

It said the ISGS was defined in the RFP as guiding the procurement services and SSGC as company providing letter of credit for LNG services even though PPRA (Public Procurement Regulatory Authority) rules distinctively put forth the rights and obligations of procuring agency but in this case the procuring agency (SSGC) was not the advertising agency and hence “may constitute a violation of PPRA rules”.

DEVIATION FROM POLICY: The Global Energy of Turkey said the requirement in the RFP to transport LNG by terminal operator or owner was in conflict with LNG Policy 2011. It said shipping/transportation was a distinct separate activity from

re-gasification services (which include berthing and unloading of LNG carrier to terminal vessel, conversion from liquid to gas and delivery of LNG to designated point).

“Bundling re-gasification and shipping may constitute a violation of PPRA rule 10 & 32 which call for widest possible specification.” This bundling is also not in accordance with LNG Policy 2011 which specifies storage, re-gasification and transportation of LNG as the only responsibilities of the terminal operator. “It seems that the tender has been designed with a pre-determined proposal/project design in mind” and hence a violation of PPRA Rule 4.

Moreover, the Global Energy pointed out that LPG Company was a wholly owned subsidiary of SSGC specified in the current tender for retrofitting of LNG terminal for supply of 500mmcfd and, hence, responsible for all terminal and post costs, pilot fees, tug fees and marine costs.

While the contract for terminal services is for 20 years, the ISGS tender for supply of LNG was for 10 years, which seemed to be in breach of rule 32 of the PPRA rules 2004.

It said the requirement to put the responsibility on the LNG operator to transport LNG was discriminatory because the Economic Coordination Committee had directed all the public sector entities to use PNSC vessels, but instead of following the directive, it was trying to put the transportation responsibility on others.

Also, the SSGC and ISGC are committing on behalf of the government to make capacity payments (throughput guarantees) without any LNG supply contract which is likely to be uneconomical, become a very sensitive issue and invite judicial intervention. It said the tender was also not clear about LNG supply — whether it was 400mmcfd initially or 500mmcfd and then 625 MMCFD.

While the company had also raised questions about price evaluation criteria that was in conflict with LNG Policy, it said a high variation in Wobbe Index (low local BTU/higher for LNG imports) from spiked supply “will most likely blow turbines and other industrial equipment in Pakistan”.

Building quality adjustment facilities for interruptible supply was twice expensive as for baseload as the facility would be used at 50 per cent capacity and it was unclear how SSGC would hold terminal operator responsible for quality of gas when SSGC itself would be responsible for LNG procurement.

Moreover, only 400mmcfd swap capacity exist between North and South gas transmission system while interruptible supply will block whole capacity but deliver only half the gas — bad value for money. All these issues,

“prima facie lead to the conclusion that RFP is restrictive, narrowly-focused and may contain multiple violations of PPRA rules”, the Global Energy said

http://dawn.com/news/1038433/import-of-lng-faces-fresh-hurdles

Pakistan Keen to Import More Electricity from Iran

Islamic Republic to increase electricity exports to its energy-hungry neighbor, a senior official announced.

“The Pakistani government is considering the import of 1,174 megawatts (MW) of electricity from Iran,” Pakistani Minister of Water and Power Khawja Muhammad Asif said on Thursday.

He underlined that Islamabad is in negotiations with Tehran for increasing the imports of electricity from the Islamic Republic to overcome a severe energy crisis in that country.

Pakistan is battling chronic electricity shortage, which is inflaming public anger and stifling industrial output, as power outages can last eight to 10 hours a day in cities, with much more frequent cuts in rural areas.

Earlier this year, Iran Power Plant Projects Management Company (MAPNA) offered immediate solution to the neighboring Pakistan's ongoing power crisis.

MAPNA, the world's sixth largest power company, announced that it can easily bridge the gap between demand and supply of electricity in Pakistan within months, the Islamabad-based Daily Times newspaper reported in June.

Pakistan's electricity shortage currently stands at 7,000 megawatts.

“We can easily provide up to 10,000 megawatts of electricity to Islamabad on the most competitive basis as compared with any other neighbouring country of Pakistan," MAPNA International Relations Director Mohammad Hossein Baqeri said.

Baqeri said that MAPNA, with 39 subsidiaries, has its own gas fields and power plants construction facilities.

"Our company has been operating in 18 countries and it can also build power plants with international standards within 15 months at 20 percent discounted rates," he added.

Iran and Pakistan exchange delegations on a regular basis and the two neighboring countries are keen to further expedite expansion of bilateral trade ties.

Pakistan’s electricity is generated, transmitted, distributed, and sold by two vertically integrated public sector utilities -- Water and Power Development Authority, responsible for all of Pakistan except Karachi, and the Karachi Electric Supply Corp -- along with roughly 20 independent power producers. None have developed substantive solutions to the country’s ongoing power crisis

http://tehranchronicle.com/iran-will-add-more-electricity-export-to-pakistan-iran-economy-latest-news/2398/

http://english.farsnews.com/newstext.aspx?nn=13920608000516

Engro Vopak to actively participate in LNG bidding: CEO

ISLAMABAD: The "Engro Vopak" was all set to participate in the bidding process for Liquified Natural Gas (LNG) to be held on October 1, as the company had completed its homework through its Port Qasim Terminal for the import of the gas.

This was stated by Chief Executive Officer (CEO) of Engro Vopak Company Limited Sheikh Imran ul Haq at a media briefing here.

He said that there was nothing in our favour or bias and his company was ready to participate in the open bidding process through competition.

He said that his company had joint venture with Royal Vopak of the Netherlands on 50:50 basis.

He said that Engro Vopak could handle LNG at Port Qasim and at any other terminal too, as his company had experience in handling of LNG.

"We have got permission for handling of LPG since 1996."

Sheikh Imran said that his company had made a total investment of US $105 million with storage of 82,400 CBM with 11 million draught, 103 acres land plot.

He said that his company was first to construct and commission LPG storage in 1999 and cryogenic facility of Ethylene (-103oc) in 2009 in Pakistan.

"Only state-of-the-art integrated bulk liquid chemical terminal in Pakistan established in 1997 with an investment of US $ 65 million is designed to handle 75,000 DWT vessel," he added.

The CEO Engro Vepok Terminal Limited said that his company handle Largest Ship of Phosphoric Acid of 31.5KT with DWT of 33.5K in 2013 with commissioning of Phase-IV (Ethylene) in 2009.

He said that his company also handle largest LPG ship of 9KT with DWT of 19K in Pakistan's history in 2013.

Imran said that Royal Vopak is a market leader in independent liquid bulk storage market.

He said that Vopak operates 85 terminals. "Vopak offers storage facilities for various products, including products under low temperatures and/or under pressure."

"Our professional approach towards LNG since 1996 Government of Pakistan had approved site."

"We proposed infrastructure for import of LNG at existing EVTL site proposal to construct new jetty in adjacent basin utilizing FSRU", he added.

He added that Economic Coordination Committee of the Cabinet (ECC) approved fast track project in July-October 2012 while SSGC supported 500 mmscfd of intermittent injection of gas

Govt may take LNG project to PPRA for clearance

Sources revealed that SSGC officials in a recent meeting with the petroleum minister in Karachi said the project would be completed in 22 months at an estimated cost of $163 million. PHOTO: FILE

ISLAMABAD: 

The government is likely to refer the award of contract for the retrofit liquefied natural gas (LNG) import facility at Progas Terminal to the Public Procurement Regulatory Authority for clearance, in an attempt to address concerns expressed by the board of Sui Southern Gas Company.

According to sources, the price offered by 4Gas Asia for the 500 million cubic feet per day (mmcfd) retrofit LNG import project looks competitive. However, the SSGC board of directors has raised objections and QED Gas Consulting is concerned about technical evaluation.

“Most of these issues have been sorted out, but some are yet to be addressed. The board’s observations including the voluntary extension in bid validity may be referred to the PPRA for a clean and clear opinion,” a source said.

Five out of six members of the SSGC board have voted in favour of getting all clearances before awarding letter of intent to the successful bidder.

Sources revealed that SSGC officials in a recent meeting with the petroleum minister in Karachi said the project would be completed in 22 months at an estimated cost of $163 million.

The qualified bidder quoted tolling tariff at 80 cents and sought payment guarantees with sovereign back-up. The maximum extension in bid validity ended on August 18, 2012 and 4Gas Asia voluntarily extended it by one month.

SSGC officials said technical proposals were received in the first stage on February 16, 2012 and out of five proposals, three were short-listed for the second stage including proposals from 4Gas Asia, Global Maritime USA and Granada Group of Companies USA.

SSGC provided the Request for Proposals (RFP) with revised conditions to the shortlisted bidders on October 31, 2012, inviting technical and financial proposals for the second stage. 4Gas Asia and Granada submitted the proposals on December 21, 2012, of which 4Gas Asia’s documents were found to be technically compliant.

However, the SSGC board raised several questions over the bid. It observed that the project in second stage was not retrofit and was also not in line with the ECC decision taken in October 2012. QED and its legal counsel expressed concern over the process.

The board pointed out that more than two extensions were not allowed in PPRA rules. A single bid could not be entertained to determine that it was competitive. Bid security condition was waived by SSGC at the request of the bidders.

SSGC officials replied to the board that it was a retrofit project because it would utilise existing facilities at the LPG terminal, except for the jetty, and was initiated much before the ECC decision, which would be approached for approval after the board gave its nod.

It also clarified that concerns of QED consultant and its legal counsel had been discussed and addressed.

The company management said PPRA Rule 24(3) allowed extension of bid validity for a period equal to the period of original validity and the single bid – tolling charge – would be compared with regional and international rates.

It stressed that bid security was never waived and only its submission time was changed, according to which it would be submitted after technical qualification. This was applicable to all the three short-listed bidders.

In India, LNG tolling price ranges from $0.605 for 1,400 throughput to $1.106 per mmbtu for land terminals. In Indonesia, tolling price is $1.8 per mmbtu for handling LNG at floating terminal and $1.2 per mmbtu for land terminal.

Average tolling price based on the year 2010 was $0.73 in the US and Canada, $0.87 in China, $0.81 in Europe, $0.89 in Korea and Japan, $0.72 in the Middle East and $0.71 per mmbtu in Southeast Asia.

http://tribune.com.pk/story/597546/govt-may-take-lng-project-to-ppra-for-clearance/

Pak-Iran gas pipeline: Pakistan plans to seek waiver from US curbs

ISLAMABAD - Pakistan has carved out a strategy to seek waiver from US sanctions through backdoor diplomacy as the country’s Law Division has hinted about the imposition of US sanctions if the government initiates work on the project, sources said on Thursday.

The sources also said that the fate of $1.5 billion worth Iran-Pakistan gas pipeline project is still in doldrums and not sure at hand following the submission of legal opinion by the country’s Law Division to the government, hinting the imposition of US sanctions on the country if the government further goes with the project.

They said that the higher authorities had informed Prime Minster Nawaz Sharif about the possible imposition of the sanctions quoting the legal opinion of the Law Division. And, the premier to seek waiver from US sanctions through backdoor diplomacy has assigned the task to concerned authorities while further work on the IP gasline project on Pakistan’s side would start after ensuring the US consent at top diplomatic level. This vital issue will also be taken up by the Prime Minister with US President Barak Obama on the sidelines of UN General Assembly (UNGA) in New York in September, the sources added.

Since Washington has repeatedly voiced serious concerns at different forums about the pipeline project so Sartaj Aziz, Adviser on National Security and Foreign Affairs, on 1st August had handed over a non-paper to US Secretary of State, John Kerry, containing the perspective how the IP gas line is important for Pakistan-an energy deficient country, a source opined.

The Iran-Pakistan gas pipeline is with a diameter of 42 inches was planned to bring 750 million cubic feet gas per day (mmcfd) with an option to increase it to one billion cubic feet. Iranian gas planned to be supplied to Pakistan by December 2014 under an agreement between both states to be functional for 20 years and there would be a five-year extension. Tadbir Energy has already shown its agreement to construct pipeline inside Pakistan. Iran has committed $500 million for financing the pipeline construction of 781-km-long gasline to be laid on Pakistani side. Total cost of pipeline construction in Pakistan has been estimated at $1.5 billion.

Iran and Pakistan in March officially inaugurated the construction phase of the pipeline project on the Pakistani side.The project kicked off in a ceremony attended by Iranian President Mahmoud Ahmadinejad and his Pakistani counterpart Asif Ali Zardari at the two countries’ shared border region in Iran’s Southeastern city of Chabahar.

Above 1900-kilometer long pipeline is planned to supply gas for Pakistan, which is suffering a lack of energy sources. According to the project proposal, the pipeline will begin from Iran’s Assalouyeh Energy Zone in the south and stretch over 1,100 km through Iran. In Pakistan, it will pass through Baluchistan and Sindh but the route may be changed if China agrees to the project.

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/editors-picks/30-Aug-2013/pak-iran-gas-pipeline-pakistan-plans-to-seek-waiver-from-us-curbs

Govt seems reluctant to launch LNG import plan

KARACHI - Amid controversies over the import of liquefied natural gas (LNG) and available facilities by the Engro-Vopak Terminal Limited (EVTL) at the city’s largest port, it seems the authorities at federal capital are reluctant to do away with all paper work, permissions etc in one go-up even after an expenditure of $5 billion in additional oil imports.
Moreover, if the project of much importance, which aims at overcoming the energy shortfall in the country, is delayed, the people will be left without electricity in the years to come.
The LNG import is considered as the shortest solution to cater to the needs of energy crisis, however it is beyond one’s imagination why were the authorities’ concerned showing reluctance to materialise the project. Besides, the LNG import could also save billions of rupees being spent under the head of oil import for the power sector.
In a move to brief the media about the Green Field area the available facilities of the Engro-Vopak Terminal Limited at the PQA, the Xenith Public Relations (Pvt) Ltd arranged a day-long visit the sites.
While giving short briefing to the media persons in the waters, Engro Chemical Engineer Ammar Shah apprised about the short-term solutions for the energy crisis resolution.
Later, while briefing at the Engro-Vopak Terminal, PQA, Engro Vopak Terminal Limited Chief Executive Officer Sheikh Imranul Haq said his firm was the only state-of-the-art integrated bulk liquid terminal in Pakistan established in 1997 with an investment of $65m designed to handle 75,000 DWT vessel.
“The EVTL was the first to construct and commission LPG storage in 1999 and cryogenic facility of Ethylene (-103oc) in 2009 in Pakistan with 30.3 million cbm storage capacity for oils, chemicals, LPG, LNG and edible oil in 2012 vs 28.3m cbm in 2011,” he said.
To a question about why the LNG import was essential, the CEO said if the work on Pak-Iran gas pipeline starts, it will take more than four years to complete, other proposals too are time gaining, however, the LNG import was the easiest way to resolve energy crisis in the country. “It just takes around six days to import in LNG from Qatar and put it in the supply lines of the SSGCL”.
Sheikh Iman said the government had approved the site and the PQA signed IA with one party without conducting a QRA. However, “We proposed infrastructure for import of LNG at existing EVTL site, gave proposal to construct new jetty in adjacent basin utilizing FSRU and recommended QRA study by all Developers to Energy Task Force. Besides, we also submitted two proposals for greenfield site at Khiprianwala in 2013, and the ECC approved fast track project in July-October 2012.”
Furthermore, the chief executive officer said the tender for 1.5 MTPA in year 1 and 3MTPA+ from 2nd year onwards under fast track project for 10 years was recently issued and the due date is October 1. It aims 400 mmscfd vs 500 mmscfd injection and at Pakland SMS vs near KESC while the EVTL could provide services to handle 1.5MTPA LNG by Nov 2014. And, the LNG import will also increase the PQA revenue up to $3 mn/year.
While lauding the efficiency of the port authorities, the CEO said PQA has the infrastructure and technical expertise to handle the FSRU trading vessel. It has handled larger vessels than the proposed FSRU trading vessel (even during night time) and is safely handling more dangerous cargo than LNG such as LPG, Ethylene, Paraxylene, HSD, HSFO for over past 17 years.

http://www.pakistantoday.com.pk/2013/08/30/news/profit/govt-seems-reluctant-to-launch-lng-import-plan/ 

Import of LNG SSGC’s top priority: MD SSGC

KARACHI - Sui Southern Gas Company Managing Director Zuhair Siddiqui has said that import of LNG is company’s top priority. He highlighted different hurdles and issues being faced by the company’s management in this regard.
He was giving the presentation to the Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi who visited SSGC head office for the first time after assuming the charge of the ministry. He was also accompanied by the Minister for State Jam Kamal Khan and Federal Secretary, MP&NR Abid Saeed.
Federal Minister gave suggestions and instructions to SSGC management for addressing these issues.
Focusing on other important developmental projects, MD SSGC informed that in Balochistan, Zarghoon Gas Pipeline Project will be completed during September 2013 and the cost incurred would be Rs 1.458 billion.
After completion of the said project around 25 mmcfd gas will be added in SSGC’s system that will be provided to Quetta city. The project consists of around 64 km long pipeline network.
The MD elaborated on other gas supply projects, which were completed during recent past or under completion.  He said that Jhal Magsi, Sinjhoro, Kunnar Pasakhi, Mehar, Rehman and Nar Baghla gas supply projects were completed against a cost of Rs. 3.432 billion, comprising of 291 km long pipelines that added around 235 mmcfd gas in SSGC’s system.
Managing Director informed the guests that during the last 5 years, company has succeeded, for the first time, to bring down its UFG by 2 percent. The Managing Director also explained the progress on SSGC’s Natural Gas Efficiency Project (NGEP).
The Federal Minister was also informed by the Managing Director about the huge receivables of Rs. 50.53 billion from KESC and Rs. 16.32 billion from Pakistan Steel Mills which are due since long. MD said that KESC is not acknowledging the late payment surcharge.
Later, the Minister and Secretary visited different departments that included 1199 Contact Center, IT’s Geographical Information System (GIS) and Data Storage Centre and expressed their satisfaction over the smooth management.


http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/29-Aug-2013/import-of-lng-ssgc-s-top-priority-md

Iran-Pakistan gas pipeline could extend to China

ISLAMABAD (Local TV) – According to documents acquired by the Dunya News, Pakistan government has decided in principal to avail China’s help in construction of the Pak-Iran gas line project.

Pakistan will hold talks with the US administration soon and request for seeking exemption from sanctions.

According to sources, PM Nawaz Sharif will hold a meeting with US President Barak Obama on the sidelines of United Nation’s Security Council meeting, and ask for exemption of sanctions imposed on dealings with Iran.

The schedule for the said meeting has been finalized in a meeting between PM advisor Sartaj Aziz and US Secretary of State John Kerry, sources say.

Pakistan might seek financial assistance from China for the construction of the pipe line in case talks with US do not prove fruitful.

Petroleum Minister Shahid Khaqan Abbasi said on Monday that Pakistan will not be deterred by any pressure on a pipeline project which seeks to import much-needed natural gas from Iran.

The $1.5 billion Iran-Pakistan gas pipeline is vital to meet burgeoning energy needs of Islamabad, especially as domestic gas production has remained stagnant and other energy import projects have hit a stalemate.

“There is no fear of any sanctions. We are confident that the project will go through and we are pushing for it,” Abbasi told Media persons.

The 1930km long pipeline will bring 750 million cubic feet per day (MMCFD) of gas to Pakistan.

Besides the fear of US sanctions, the government also needs to arrange money for construction of pipeline part in Pakistan.

President Zardari and former Iran President Ahmadinjad signed the agreement about the project in a ceremony earlier this year.

http://www.thefrontierpost.com/article/36659/

http://pipelinesinternational.com/news/iran-pakistan_gas_pipeline_could_extend_to_china/083218/

Pakistan will start importing Iran gas by early 2015: Minister

Islamabad says it will finish the pipeline projected to carry natural gas from Iran to Pakistan, and will start importing gas from its western neighbor by early 2015.

Pakistan Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi told the National Assembly on Wednesday that the Iran-Pakistan gas pipeline would finally be completed in December. 

Abbasi noted that Islamabad is bound to purchase gas from Iran by January 1, 2015, and it would face a penalty of USD 3 million per day if it fails to meet the deadline. 

He said despite a number of obstacles, the government remains committed to completing the gas pipeline project within the stipulated period. 

The final construction phase of the pipeline, which would cost about USD 1.5 billion, was inaugurated on March 11. 

Iran has already built 900 kilometers of the pipeline on its soil and is helping to build the 700-kilometer part of the pipeline on the Pakistani side. 

The IP pipeline is designed to help Pakistan to overcome its growing energy needs at a time when the country of over 180 million people is grappling with serious energy shortages. 

Pakistani Federal Minister for Planning Ahsan Iqbal said in early June that the new Pakistani government will continue the joint gas pipeline project with Iran, saying the issue of energy is Islamabad’s top priority.



http://post.jagran.com/iranpakistan-gas-pipeline-to-be-ready-on-time-says-pak-minister-1377775402

http://newindianexpress.com/business/news/Iran-Pakistan-gas-pipeline-to-be-ready-on-time/2013/08/29/article1758174.ece

http://www.zawya.com/story/IranPakistan_gas_pipeline_to_be_completed_on_time_minister-ZAWYA20130830085850/

http://www.criticalthreats.org/pakistan-security-brief/pakistan-security-brief-august-29-2013

Court fixes Sep 3 for hearing of gas project petition

LAHORE: The Lahore High Court on Tuesday fixed September 3 for preliminary hearing of a petition seeking direction for the federal government to resume work on Pak-Iran gas pipelines project. Justice Nasir Saeed Sheik of LHC
An advocate Ch Ahmad Masood Gujjar filed the petition stating thatPakistan and Iran had initiated the project of laying 780-kilometer pipelines in the ambits of Pakistan before December 2014 and on March 11
2013 the inaugural ceremony was held which President Asif Ali Zardari
and Iranian president Mahood Ahmad Nijad attended. 
He said on May 27, 2013 Iranian government had also written a letter to Pakistani government expressing their concerns over delay in starting work in Pakistani portion of the pipelines.
He stated that by this project Pakistan would get 5000-megawatt electricity, which would be sufficient to fulfil the need of the country, which was already suffering due to shortage of power production. He said that this project was in national interest and it would also get benefit to create new job opportunity for the backward areas of Sindh and Balochistan.
He stated instead of completing this project, authorities had stopped the construction work. He alleged that under the pressure of Saudi Arabia and
United States, newly elected government intended to shelf the project.
He stated that the US involvement in Pakistani’s internal affairs was
breach of its sovereignty. staff report


http://www.dailytimes.com.pk/default.asp?page=2013%5C08%5C28%5Cstory_28-8-2013_pg13_4

US firm sets conditions for LNG import to Pakistan

SLAMABAD - The PML-N-led federal government is in a fix how to bring imported LNG to Pakistan as visiting US based ConocoPhillips Company (CPC) has linked the provision of LNG to Islamabad only after the incumbent government would ensure guarantee for its investment besides other conditions.
After, the issuance of tenders for retrofitting of LNG terminals coupled with Qatar’s recommendation to negotiate with few LNG firms to bring the imported gas to Pakistan, the 3-member visiting delegation of ConocoPhillips Company (CPC) headed by its top head told the officials of Petroleum Ministry and Inter State Gas Systems (Private) Limited (ISGS) on Wednesday during a meeting that the negotiations for import of LNG would be initiated only after a guarantee of Government of Pakistan, inclusion of ADB in the deal and the government issue the tenders for retrofitting of LNG terminals, official sources in the Petroleum Ministry told The Nation, adding, “The CPC delegation was told that the government will issue tenders just after the Eidul Fitr for reconstruction of LNG terminals at Port Qasim.”
“The ministry is in a catch 22 situation on how to bring Qatari LNG to Pakistan and so far could not find a way out in this regard,” a senior official at the ministry told this scribe late Thursday.
The official sources further disclosed that ConocoPhillips Company (CPC) enjoys the rights in Qatar to export LNG on the directives of Qatari government. The top representatives of US-based company is visiting Islamabad only to realize the export of LNG to Pakistan from Qatar, but the talks halted on the subject due to many reasons including availability of Government guarantee, inclusion of Asian Development Bank (ADB) in the deal etc. The company has also asked the top mandarins of the Ministry of Petroleum and Natural Resources to first ensure seriousness towards the construction of LNG terminals.
Earlier, the government has already sought exemption from PPRA rules in the award of contract for construction and retrofitting of LNG terminals but after finding no from the regulatory authority (oil and gas regulatory authority) coupled with the pressure of Public Procurement Regulatory Authority (PPRA) had succumbed to their pressure and left the option of exemption from necessary rules.
So far, the cost of LNG has been worked out with Qatar at $19.49 per MMBTU and the price differential will cost the country $326 million extra in the first year alone. While, under the preliminary working as per official sources the “LNG will be sourced from Qatar at a price equivalent to 14.9 per cent of Brent, which will translate to a RLNG (re-gasified liquefied natural gas) price of (110x14.9 per cent [today’s Brent price] = 16.39+0.60 [marine transport] +2.50 [terminal tolling charge) = $19.49/MMBTU. At present, the price of the commodity is significantly higher than the price obtained in the recently cancelled tender, which works out to $17.26/MMBTU. The price differential is expected to cost the country at $326 million extra in first single year.”
It is to note here that the government following the verdict of Supreme Court had scrapped last bidding process of LNG where it had received the bid of $17.26 per MMBTU which is $2.21 per MMBTU less then the preliminary offer to the new government by Qatar.
However, it has become crystal clear that to materialize the import of LNG to run power and industrial sector of the country the incumbent regime government would have to issue new tenders inviting bids for LNG supply as per PPRA rules.

ConocoPhillips with a head office at Huston -USA is efficiently and effectively involved in exploration and production of oil and natural gas. Since producing oil and natural gas and getting them to market takes ingenuity, technology and investment so the ConocoPhillips Company (CPC) with its innovative, collaborative efforts yields products that improve quality of life globally while producing economic benefits with far-reaching influence.


http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/islamabad/02-Aug-2013/us-firm-sets-conditions-for-lng-import-to-pakistan

Pak-Iran pipeline: Pakistan to continue pipeline project despite international pressure

The $1.5 billion Iran-Pakistan gas pipeline is vital to meet burgeoning energy needs of the country. PHOTO: AFP/FILE

KARACHI: Pakistan will not be deterred by any pressure on a pipeline project which seeks to import much-needed natural gas from Iran, Petroleum Minister Shahid Khaqan Abbasi said on Monday, emphasising a stance that is now frequently being repeated by government officials.

The $1.5 billion Iran-Pakistan gas pipeline is vital to meet burgeoning energy needs of Islamabad, especially as domestic gas production has remained stagnant and other energy import projects have hit a stalemate.

“There is no fear of any sanctions. We are confident that the project will go through and we are pushing for it,” Abbasi told newsmen here.

“Iran is selling gas to Armenia and Turkey. When these countries can buy gas then so can we,” he said, refusing to acknowledge threat made by some high ranking US officials that any deal with Iran can bring economic restrictions.

The 1930km long pipeline will bring 750 million cubic feet per day (MMCFD) of gas to Pakistan

Beside the fear of US sanctions, the government also needs to arrange money for construction of pipeline part in Pakistan.

“The previous government has imposed a Gas Development Cess to raise that money. But Islamabad High Court struck it down. We are trying to solve that problem. But we are also trying to work on some interim arrangement,” he said without elaborating.

The other gas import project, which deals with liquefied natural gas (LNG), and considered quicker than constructing a transnational pipeline, has also hit snags. Efforts to import LNG have been in process for eight years now but clash of private interests often derails the initiative.

“We must realise how important this is. Cost of LNG was just $6 (per MMBTU) when work started and now it ranges between $15 and $18,” he said, adding that despite waste of so much time he was still in no position to give guarantee if the project will not fall prey to legal battles.

Certain measures have been taken to avoid the past experience when different groups vying to buy a long term contract for LNG supply complicated the project, he said. “Functions of supplying LNG and terminal have been changed. This is called the unbundling approach.”

More importantly, Abbai says government will chose the lowest bidder.

Pakistan Petroleum Limited’s discovery

Surrounded by green cottonseed and banana fields in district Sanghar, discovery of gas reserves in Shadad X-1 well has raised prospects for Pakistan Petroleum Limited’s (PPL’s) Gambat Block.

Speaking at the ceremony, PPL CEO Asim Murtaza Khan said there have been back-to-back discoveries of two wells in the block that will add 50 to 70 MMCFD of gas into the system in next ten months. “PPL will try to make sure that production of 70 MMCFD or more.”

http://tribune.com.pk/story/595807/pak-iran-pipeline-pakistan-to-continue-pipeline-project-despite-international-pressure/

Pakistan to honour commitment, says Abbasi

SANGHAR: Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi on Monday said that Pakistan-Iran Gas Pipeline was a matter of great importance for the country and Pakistan would honor its agreement with the neighbouring Iran regardless of any pressure, foreign or domestic.

He was visiting Gambat South Block in District Sanghar, Sindh to mark recent discoveries made by Pakistan Petroleum Limited (PPL), the operator of the block. He said that no geo-political influence was the cause of concern for Pakistan in this regard. “Turkey and Armenia are already purchasing natural gas from Iran and if there is no sanction for these countries, there would be none for Pakistan either,” Abbasi categorically said.

He informed that this gas project would cost around $1.5 billion, which would be raised through Gas Infrastructure Development Cess (GIDS). “Though the Islamabad High Court (IHC) has stayed the Cess but the matter would be resolved soon. The government also has sorted out some other internal sources of funding in this regard,” he informed.

It may be mentioned here that no international donor or financing institution is interested fund this project, as this project is against the interests of United States in the region. It may also be mentioned here that bureaucracy at the ministries’ level has its doubts and reservations about the project and according to sources a very high level meeting has made critical observations about the project that government must decide whether the hands or the neck.

Abbasi said that the project would be completed soon and Pakistan could get one billion cubic feet per day (BCFD) gas from Iran.

About the LNG import, the minister said that it was the only option in the short term to meet the country’s energy needs and informed that a tender has been floated after removing all the reservations of stakeholders.

He said that LNG supply and terminal development had been separated for transparency in the entire scheme. “LNG would come to the country by the end of next year,” he assured.

The minister reiterates the government’s stake in promoting oil and gas exploration to plug the energy deficit faced by the country on the one hand and the importance of the discovery by PPL that has 65 percent working interest in the block along with its joint venture partners Government Holdings (Private) Limited and Asia Resources Oil Limited, with 25 percent and 10 percent interests, respectively, made two back-to-back gas-condensate discoveries at exploration wells Wafiq X-1 and Shahdad X-1 within a span of approximately one month.

Welcoming the minister and other guests, which comprised representatives of the Ministry of Petroleum and Natural Resources (MP&NR), provincial government, local administration, MD and CEO Asim Murtaza Khan highlighted the importance of the discoveries, particularly in light of the prevailing energy crisis, adding that PPL was striving to fast track production from the two wells through Extended Well Testing. “As a key public sector E&P company, we are cognizant of our responsibility to optimize production and reserves replacement of hydrocarbons to decrease reliance on oil imports and secure a safe energy future for the country.”

The minister also visited the rig at Shadad X-1 well site and ignited the gas flare.

It is interesting to note that PPL, which has become a multi-national exploration and production company operating blocks in Iraq and Yemen, has dedicated internet connectivity or business centers at its production fields.

http://www.thenews.com.pk/Todays-News-2-198253-Pakistan-to-honour-commitment,-says-Abbasi

Iran-Pakistan gas pipeline could be extended to China

ISLAMABAD: Notwithstanding US opposition to its gas pipeline project with Iran, Pakistan is looking at the possibility of extending it to China as part of a planned economic corridor.

Pakistani and Chinese officials will discuss the laying of the gas pipeline from Gwadar to western China in a meeting to be held here on August 26.

http://articles.timesofindia.indiatimes.com/2013-08-24/pakistan/41443153_1_gas-pipeline-gwadar-port-iran-pakistan

LHC moved for early completion of IP gas project

LAHORE: A petition has been submitted in Lahore High Court (LHC) for the early completion of Iran-Pakistan (IP) gas pipeline project, Geo News reported Friday.

The petitioner stated that IP gas pipeline project is in the interest of both the countries, however, the project was not being implemented as a result Pakistan will face $3 million loss on daily basis.

The petitioner prayed for issuing the orders to complete IP project within the due time in 2014.