Resolving energy crisis: Minister woos Koreans to invest in power projects

Minister of State and Power Chaudhry Abid Sher ALi and Ambassador of Korea at Korea-South Asia Power Forum-2013. PHOTO: NNI

ISLAMABAD: Minister of State for Water and Power Chaudhry Abid Sher Ali said that six sites have been identified where projects such as the 2,200 MW Karachi Coastal Power Project could be set up.

While addressing the Korea-South Asia Power Forum, Ali said the Karachi Coastal Power Project will be completed with the help of foreign investment.

The minister marked the forum as a timely initiative taken by Korea ‘to bring business and investment in the power sector of Pakistan’. In the forum, 24 leading Korean power sector companies participated.

“Korea is Pakistan’s leading hydropower development partner and its companies are taking a deep interest in various projects,” said Ali.

“It is the top priority of our government to ensure safety and security to all our investors and provide other relevant facilities. We are taking various measures in the short and long run to address the energy issues permanently. These measures include construction of small and big dams and exploration of hydel, solar and wind power.”

Meanwhile, Korean Ambassador Dr Song Jong-Hwan added that the country’s companies were working on hydropower projects in Pakistan. “Korean companies K-water, Sambu E&C, KOSEP, Hyundai Engineering and Daewoo E&C are working intensively on hydropower projects that will produce 1,500 MW and will cost an estimated $3 billion,” said the ambassador.

“Korea strongly supports and stands with Pakistan in its efforts of economic revival and resolving the energy crisis.”

Ali stated that Pakistan has been facing an unprecedented energy crisis since the last few years, which has adversely affected its economy and people .Elaborating on the government’s measures, Ali spoke about payments of outstanding dues to power generation companies, establishing special energy parks, new hydropower projects commencement and formulating a new power policy.

Muhammad Zubair, chairman of the Board of Investment, further explained the government’s new investment policy and assured the delegates that their investment will be protected in all aspects and fast track facilities will be offered regarding security, companies’ registration and consular affairs.

The forum was organised as a celebration of the 30th anniversary of the Embassy of Republic of Korea and Korea Trade and Investment Agency.

Assurances needed: ‘Opening road for India may hit our motorcycle industry’

There are one hundred motorcycle manufacturers in Pakistan out of which 80 are currently producing the bikes. PHOTO: FILE

LAHORE: 

An open-door trade policy with India may hit Pakistan’s motorcycle industry due to the former’s more complex laws for foreign entrants, said Atlas Honda General Manager Research and Development Afaq Ahmed.

Talking to a group of journalists, Ahmed said India’s vehicle emission standards are unique and complex, which most foreign players see as a deliberate attempt to discourage imports and penetration in their market.

He added that Pakistan’s laws for foreign entrants are better in comparison as he voiced concerns amid talks about opening trade with India doing the rounds.

“India’s emission standards are capable of discouraging Pakistan’s motorcycle exports even if both countries open the door for liberal trade and this is our major concern,” said Afaq, while showing different production processes of motorcycle manufacturing at Atlas Honda’s Sheikhupura plant.

The company has another plant in Karachi — the older plant from where the company started assembling its motorcycles in the country in 1963.

While Ahmed added that Pakistan’s motorcycle industry was good enough and ready to compete with India ‘not only here but also in regional markets like Bangladesh and Sri Lanka’, he said the concern was whether the country would get a level playing field in liberal trade with India.

He stressed on the need for the Pakistan government to analyse and determine the reservations of the country’s motorcycle industry.

Use of Chinese parts

When asked about the use of Chinese parts in Atlas Honda motorcycles, Ahmed said the company does import parts from China but only from the approved vendors of Honda Japan.

“We do not compromise on the quality of the parts.”

Atlas Honda also claimed that it is producing up to 94% of motorcycle parts in Pakistan and imported the remaining, which are cheap in other countries owing to their economies of scale.

Chinese motorcycle assemblers in the country say Atlas Honda imports many of its parts from China but criticised them when they do the same to assemble motorcycles.

Big players like Atlas Honda believe that most Chinese motorcycle assemblers smuggle parts or save regular government duties through under invoicing and under malpracticing.

Market share and profit situation

There are a 100 motorcycle makers in Pakistan out of which 80 are currently producing motorcycles. Atlas Honda is the largest motorcycle manufacturer in Pakistan and its current market share is 47%.

Atlas Honda, a part of Atlas Group, is financially sound with maker posting a net profit after tax of Rs1.6 billion during the last fiscal year that ended March 2013. This was in comparison to the Rs1.2 billion it made last year. The sales of the company stood at Rs42.3 billion, up 11.3% in the same period compared to previous year’s Rs38 billion.

The company’s current annual production stands at 630,000 units but it is targeting 1 million per year. It recently invested Rs600 million in its production facilities to raise the installed capacity to 850,000 by June 2015, in an attempt to increase from the current 750,000 units per year.

Adhi doing ‘well’ as oil production rises

Following the appraisal, total production from the Adhi well has risen to 6,111 barrels of oil per day, according to Pakistan Petroleum Information Services (PPIS) data. CREATIVE COMMONS

KARACHI: 

Oil production in Pakistan rose to 82,624 barrels per day in the week ended November 26 as Pakistan Petroleum Limited (PPL) completed its assessment of Adhi-19 well, which was declared a gas and condensate producer, research house Topline Securities said in a report released on Wednesday.

Following the appraisal, total production from the Adhi well has risen to 6,111 barrels of oil per day, according to Pakistan Petroleum Information Services (PPIS) data, showing an increase of 591 bpd over the week ended November 12 when the well produced 5,520 bpd.

“We believe the drop in Adhi’s production to 3,223 bpd in the previous week was due to tie-in of this new appraisal well,” said Vahaj Ahmed, analyst at Topline Securities.

PPL holds 39% working interest in Adhi field, where 19 wells have been drilled to date. OGDC holds 50% working interest and Pakistan Oilfields Limited has 11% interest in the field, which is located 70 km south of Islamabad in the Pothwar region.

Meanwhile, gas production in the country rose to 4,083 million cubic feet per day (mmcfd), primarily due to increase in output from some fields, the research house said.

Production from Mari field rose 37 mmcfd, Latif field recorded an increase of 26 mmcfd and Kandhkot field saw a rise of 16 mmcfd. PPL has 33% and 100% working interests in Latif and Kandhkot fields, respectively.

About two months ago, Prime Minister Nawaz Sharif inaugurated a 50km pipeline connecting Latif to Sawan gas field in an effort to add 100 mmcfd to the system.

“Production from Latif field has increased to 150 mmcfd compared to 75 mmcfd at the time of the announcement, up 100%,” the research house said.

Last year, the government allowed the gas price set in the Petroleum Policy for 2012 for volumes above the initial field development plan for Latif gas field ie 60 mmcfd. It will now fetch wellhead gas price of $5.9 per million British thermal units if Arab Light crude price hovers in the range of $100-110 per barrel.

“This will have an annualised impact of Rs1.3 per share on PPL,” the report said.

Decision to withdraw cut in gas supply hailed

Gas is an essential input for textile industries without which the production process is completely halted, says FCCI president. PHOTO: FILE

FAISALABAD: Faisalabad Chamber of Commerce and Industry (FCCI) President Engineer Suhail Bin Rashid has expressed his relief at the Ministry of Petroleum and Natural Resources’ decision to withdraw a summary on suspending gas supply to textile industries in Punjab during the peak winter months.

In a statement issued yesterday, Rashid said that GSP Plus Status is likely to be granted by European Parliament from January 01, 2014 which would be a unique opportunity for Pakistan. “Our exports might go up from $700 million to $1 billion per year along with generating employment to 100,000 people,” said Rashid. “In addition this would also create economic activities in the country.”

He said that gas is an essential input for textile industries without which the production process is completely halted and no alternative fuel is either feasible or available to use in textile processing. He said that the government has been urged not to curtail gas supply to textile industries in the peak winter months and now the decision is a welcoming one.

He said that Pakistan has already suffered loss to the tune of $1 billion due to being a front line partner in the war-on-terror and the grant of GSP Status Plus will be helpful for the revival of the economy.

He said that uninterrupted supply of electricity to the industries is also imperative to operate on 24 hours basis, utilising full installed capacity and providing employment to the workforce in the area

Positive: Burger King looking to expand

The arrival of the franchise is seen as an opportunity to yield employment and other economic opportunities. PHOTO: AYESHA MIR/EXPRESS

KARACHI: 

Burger King Holdings Inc. Executive Vice-President and Asia Pacific President Elias Diaz Sese is looking forward to expanding business in the country and termed Pakistan ‘an ideal place’ for investment.

“Pakistan is an ideal country for investment and we are here to show the commitment of successful operations in Pakistan,” said Sese.

MCR Pakistan (Private) Ltd, the master franchisee of Burger King Pakistan, is also looking forward to opening more outlets and expanding across the country.

“MCR Pakistan has so far opened four outlets in Karachi. We are satisfied with the law-and-order situation in the city and across the country as well. We may open an outlet in Korangi.”

The arrival of the franchise is seen as an opportunity to yield employment and other economic opportunities.

Roundtable: Talks on IP gas pipeline to restart next week

This will be first interaction between Pakistan and Iran on the IP pipeline since change of governments in the two countries in mid-2013. ILLUSTRATION: JAMAL KHURSHID

ISLAMABAD: 

Pakistan and Iran are set to re-engage in negotiations over a much-delayed gas pipeline project in Tehran next week, where Islamabad is likely to press Tehran to waive penalty for delay, cut gas price and revise construction contract.

According to sources, Petroleum and Natural Resources Minister Shahid Khaqan Abbasi would lead a delegation in the upcoming talks, starting on December 9. This will be first interaction between Pakistan and Iran on the IP pipeline since change of governments in the two countries in mid-2013.

“The government wants to renegotiate the agreed gas price and the construction contract during the visit of petroleum minister to Iran,” a source said, adding that Pakistani officials were making the trip on an invitation from Tehran.

This comes despite US opposition and threat of sanctions against the project, which will bring gas from Iran to meet Pakistan’s pressing energy needs.

Though Iran has signed a nuclear deal with the US and other western powers, Washington has announced that it has not changed its stance on the IP pipeline.

In a bid to placate US concerns, Pakistan is mulling over seeking an undertaking from Iran that proceeds of the gas pipeline would not be spent on nuclear proliferation activities. Pakistani officials are also expected to take up this issue during upcoming talks.

A Pakistani delegation, led by the ministers of petroleum and water and power, visited Washington in the second week of November and asked US authorities to exempt the IP pipeline from sanctions. However, the US did not give any assurances.

Pakistan has placed a request before the Iranian government, asking it to dole out the entire financing, estimated at $2 billion, to lay its segment of the gas pipeline. Iran has committed $500 million and in response Pakistan has pledged to award the construction contract to Iranian firm Tadbir Energy.

The pipeline should be completed in December 2014, but officials believe it could take a longer time because of hurdles to generating financing in the wake of US pressure.

“Should Pakistan fail to honour its commitment, it would not only entail an initial financial liability of $3 million per day, Iran would also have the option to approach different courts of arbitration,” a Foreign Office official told The Express Tribune.

“In this situation, we are compelled to ask for waiving the penalty due to delay in implementation of the project,” he said. The government is expected to seek six-month to one-year time from Tehran.

Sources said since the Iranian offer for construction of the pipeline was on the higher side, alternative sources of financing were being explored to lay Pakistan’s portion of the pipeline.

According to a report prepared by the petroleum ministry, if furnace oil-based power generation is replaced with imported gas, it will lead to annual savings of $2.4 billion.

It also said the impact of IP gas price would be just 20% of the overall average gas basket price in the country if 750 million cubic feet of gas per day (mmcfd) is imported.

Under the project, Pakistan will initially import 750 mmcfd, which could be extended to one billion cubic feet. The Balochistan government wants 250 mmcfd for consumption at the Gwadar port, which would prompt the central government to seek increased gas supply to meet the needs of the province

Lavezzi would be 'useful' Inter addition, says Mazzarri

The Argentine has been linked with a return to Serie A in January but the San Siro coach believes any move would be complicated

Inter boss Walter Mazzarri has talked up a possible pursuit of Paris Saint-Germain attacker Ezequiel Lavezzi after admitting he could be a "useful" acquisition.

The 28-year-old - whose current deal runs until June 2016 - has been unable to cement a permanent starting spot in Laurent Blanc's PSG side this season and there have been suggestions he could return to Serie A in the winter.

Mazzarri did not deny interest in signing the Argentine, whom he coached for three years at Napoli, but said that a move for the Parisiens forward would be complicated.

"If Lavezzi did what he did at Napoli and then joined PSG it's because he's a player who would be useful at any club," he told Rai Sport.

"But going from that to saying that Inter should buy him, well, there are lots of factors to consider."

With Diego Milito and Mauro Icardi sidelined through injury, the Nerazzurri are running low on strikers, and Mazzarri is hopeful of resolving the situation swiftly and retaining the club's status as the leading scorers in Serie A this term.

"Back in the summer I think we had Milito and Icardi... but now they're injured," he continued. "We're missing two players in the same position - and not because the club didn't sign them but because they got put on the sidelines.

"Until January we have to work with what we've got. Besides, with the players that we have been able to field we have the best attack in Serie A."

Inter host Trapani in the Coppa Italia on Wednesday as they bid to reach the Round of 16.