The Globalization Bulletin Energy January 2018 NEWS COVERAGE PERIOD FROM JANUARY 29TH TO FEBRUARY 4TH 2017 PAKISTAN, EU AGREE TO COOPERATE IN ENERGY CONSERVATION Business Recorder, February 1, 2018 ISLAMABAD: Pakistan and European Union have agreed for cooperation in energy conservation and energy efficiency and in this regard the Power Division will send a high-level delegation, comprising government officials and private sector experts, to the EU to participate in a workshop with European experts and professionals. The decision was made on Wednesday in a meeting between Federal Minister for Power Division, Sardar Awais Ahmed Khan Leghari and EU Ambassador Jean Fancois Cautain. It was further agreed upon that the European Investment Bank will be invited to the subject workshop to explore different options relating to financing the energy related projects in Pakistan. Sardar Awais Ahmed Khan Leghari while thanking the EU ambassador for hosting the workshop on promotion of energy efficiency and energy conservation said that after having successfully bridging the demand and supply gape, now it is of utmost importance that the consumers should be educated on usage of electricity. The education will not only save money for the consumers but also help in efficient utilization of the existing generation capacity as one megawatt saved is far better than one megawatt generated, he added. The federal minister also invited the European Investment Bank and other EU potential assistance partners for assistance in establishment of Pakistan’s First Renewable Energy Institute. He said that he will meet the chairman Higher Education Commission for identification of suitable university in Pakistan for establishment of the institute. He also proposed which was agreed upon by the EU ambassador that both the Power Division and EU Embassy will appoint focal persons to frequently interact on matters relating to the energy cooperation between the two sides. The federal minister highlighted salient features of the government’s plan to solarize some 30,000 tube wells in Balochistan and also invited the EU to take part in the process. The European Union ambassador said that the European investment Bank is keenly observing the fast expanding power sector in Pakistan. He said that the Bank will for sure be considering option of assistance in solarization of tube wells in Balochistan. He said that EU is already working closely with the government of KPK on a number of renewable energy projects, most of which are hydel. The ambassador assured the minister that the EU will continue to provide assistance to Pakistan in the energy sector. https://epaper.brecorder.com/2018/02/01/3-page/697274-news.html WITH NOD FROM SINDH, GAS SECTOR REFORMS CROSS HURDLE The Globalization Bulletin Energy Dawn, February 3rd, 2018 Khaleeq Kiani ISLAMABAD: Sindh government has given its conditional approval for reforms in the downstream gas sector proposed by the federal government, provided the provinces were given appropriate representation on the boards of directors of the successor companies of Sui Southern and Northern gas companies. The government of Sindh has given up its objections over “the unbundling of Sui gas utilities as proposed by the federal government on the condition that provinces will be represented on the board of Sui successor companies”, according to the minutes of a recent meeting on the subject. The record showed the Sindh government had submitted detailed proposals for provincial participation in the gas sector regulators for the downstream and upstream sectors and wanted the provinces to have representation beyond only in the Directorate General of Exploration and Production (DG E&P) and Pakistan Petroleum Exploration and Production Regulatory Authority (PPEPRA). The government of Khyber Pakhtunkhwa is still opposed to the structure of reforms proposed by the federal government. The policy positions of the provincial governments are expected to be taken up before the next meeting of the Council of Common Interests (CCI). Under the gas sector reforms proposed by the World Bank, the federal government wants to divide two gas utilities – SSGCL and SNGPL — into at least five public-sector companies and to ultimately allow some private operators to enter the distribution sector. This also creates two different tiers of gas consumers — one based on local natural gas and the other on imported liquefied natural gas (LNG) — at two different prices. Tier-one will comprise domestic gas delivered on an as-and-when-available basis, based at regulated prices set by the government like current practice. Tier-two will comprise imported gas delivered on a firm basis at market price with all costs of delivering LNG. Private consultants have concluded that the separate tiers would ultimately need to be merged in four to five years owing to declining local gas supplies and to ensure full gas cost recovery from consumers. On behalf of the KP government, chief executive officer of the Khyber Pakhtunkhwa Oil and Gas Company Mr Raziuddin advocated that an important pre-requisite to the gas sector reforms was fast track resolution of the relevant constitutional provisions. He proposed integrated gas distribution and transmission companies on the provincial basis and one National Transmission and Despatch Company. The structure was proposed in the light of KP’s concern that the province could lose control to the National Gas Transmission Company (NGTS) over The Globalization Bulletin Energy the gas produced in the provinces and such a company may not build or expand gas lines that may be a priority for the provincial government. The federal government, however, did not give consideration to the idea of multiple transmission companies, say at the provincial level as proposed by the KP on the ground that such companies would kill the purpose of efficient use of transmission infrastructure to serve all provinces and make the cross provincial border movements cumbersome to serve all the provinces. It also contended that the NGTC will not take title to the gas and under no circumstances will any new gas discovery leave the province in which it is produced without the consent of the provincial distribution company and without agreed terms. This will be made possible by making a provincial distribution company the nominated buyer of any gas found in the province in accordance with article 158 of the constitution, the Petroleum Division argued. On top of that, the centre has suggested that provincial government representatives would be members of the NGTC board under nomination of the federal government. Regarding building of gas transmission lines, the centre has proposed that in addition to provincial representation on the NGTC, the province itself will be free to secure a transmission licence from the regulator to build any line it considered necessary. The centre also did not agree to give shareholding to provinces in successor gas distribution and transmission companies on the ground that Sui companies were public listed companies and entitlement to seat on the board was based on equity ownership. However, it agreed to the Sindh government’s proposal that the centre should nominate provincial government officials from its entitlement of board seats in successor companies without disturbing the decision making as required under the Securities and Exchange Commission of Pakistan’s code of corporate governance. https://www.dawn.com/news/1386927 ‘THAR COAL POWER PLANT TO START PRODUCING 660MW BY DEC’ Dawn, February 4th, 2018 Hanif Samoon MITHI: Seventy per cent work on both mining and power projects have been completed ahead of schedule and the first electron from Thar Coal Block-II will start generating power by the end of this year, according to Sindh Engro Coal Mining Company (SECMC) chief executive officer. SECMC CEO Shamsuddin Shaikh informed a delegation of members of Sindh Assembly, civil society representatives, senior journalists and corporate executives who visited Thar Coal Block-II on Saturday that the power to be generated from Thar coal would be the cheapest in Pakistan. Mr Shaikh said while briefing the delegation on the progress achieved so far in the mining and the power plant construction that they were just 20 meters away from the first steam coal to supply coal to 660MW mine-mouth power plant. The Globalization Bulletin Energy SECMC, a joint venture between Sindh government and Engro Powergen Ltd, was all set to start generating power to supply to the national grid from early next year, he said. About the community development projects undertaken by the SECMC’s Thar Foundation, he said that different schemes in education, healthcare, safe drinking water, women empowerment and skill development had been initiated at a total cost of Rs4.5 billion. Engro Powergen Limited CEO Ahsan Zafar Syed briefed the delegation about the power plant and said that imported technology was being used to protect local environment. The power plant would hopefully complete six months ahead of schedule, he said. Senator Taj Haider of PPP said: “We are now very close to achieving success, the foundation of which was laid by Mohtarma Benazir Bhutto.” Thar coal project would make paradigm shift in the economy of Sindh but all its benefits should go first to the people of Thar and then to others, he said. Pak Sarzameen Party head Mustafa Kamal said that Thar coal project was a model project which was bringing positive change to locals’ life. “Another positive change we have witnessed here is that the corporate sector is giving people priority over profit, which is seldom seen anywhere,” he added. Pakistan Muslim League-Functional MPA Nusrat Sehar Abbasi said that the Thar coal project was among the few success stories of the government but she added at the same time that the government needed to put in more efforts to exploit the coal reserves in the rest of the blocks as well for the prosperity of Thar, Sindh and the entire Pakistan.