Pakistan will push hard for quick implementation of a long-delayed trans-regional gas pipeline from Turkmenistan in a bid to ease its mounting energy crisis, Petroleum Minister Naveed Qamar said on Tuesday. Senior officials of Turkmenistan, Afghanistan, Pakistan and India on Monday inked the framework of an agreement to construct the project with an estimated value of $3.3 billion.

The project would pump natural gas to Pakistan and India through the southern Afghan province of Kandahar, the stronghold of the Taliban and its birthplace. More energy security could ease pressure on Pakistan’s government, which faces a range of challenges, from a home-grown Taliban insurgency to what will likely be years of economic pain after summer floods caused billions of dollars in damages.

But analysts said the agreement was still at a preliminary stage and that security challenges in Afghanistan and the tensions between India and Pakistan remained an obstacle. Proposals to build the pipeline have been on the table since the 1990s but war in Afghanistan delayed the project.

“We are following a very, very aggressive timeframe to conclude agreements on this project as early as possible,” Petroleum Minister Naveed Qamar told Reuters by telephone on his way home from Turkmenistan, where the agreement was initialled on Monday. “But it’s too early to say that when these agreements will be completed and when the project will be implemented. Everything is subject to conclusion of agreements.”

The big question is can Afghanistan provide security for the pipeline? A Taliban insurgency is still raging there after nine years of war and more uncertainty is expected after US troops start withdrawing next summer. Any new tensions between arch-enemies Pakistan and India could also complicate efforts to get the project moving. Qamar said a final framework agreement is expected to be signed at a summit of the leaders of the four countries in December.

A pact covering the broad principles of sale and purchase of gas was also signed. Although some Pakistani energy officials hailed the tentative agreement, analysts say it may just be more wishful thinking. “It’s an agreement to reach another agreement without any concrete details and until then it cannot be termed as important,” said Khalid Iqbal Siddiqui, director of Pakistan’s Invest and Finance Securities Ltd. “This is not the first time it has happened.” The planned pipeline would have initial capacity for 33 billion cubic metres a year and would run for nearly 2,000 km (1,250 miles), including 735 km across Afghanistan and another 800 km through Pakistan. Natural gas to fill the pipeline could be drawn from the massive South Iolotan deposit, currently under development, and the existing Dovletabad field.

Pakistan also hopes a major gas pipeline project from Iran will help it tackle its energy problems. In March, the two sides signed a deal to build a much-delayed $7.6 billion pipeline pumping Iranian natural gas to Pakistan. That project may also be fraught with political uncertainties as the United States has been discouraging Pakistan from any deal with Tehran because of its suspected ambitions to build nuclear weapons. Iran denies it has such ambitions.

via Business Recroder

We have heard about the IPI gas pipeline on and off. The agreement between Iran and Pakistan was signed for gas pipeline in march this year. The latest is that German Consultants are set to be appointed for this project. Details from paktribune are as below.

Pakistan is set to appoint ILF Consulting Engineers as the consultant for the Iran gas pipeline within six days, making first step toward the much-delayed project to meet energy shortage, a senior petroleum ministry official said on Wednesday.

“The cost of the consultancy project will be $25 million and they will have to complete the technical feasibility within 12 months,” Secretary Petroleum, Ejaz Chaudhry, told our sources. The Germany-based consultants would be working on the pipeline along with National Engineering Services Pakistan Ltd. (Nespak), he said.

According to the Iran’s state-run television, Tehran has already built most of the 1,000 km pipeline on its territory. However, the work on the remaining 900 kilometres at the Pakistani side has been pending for years.

Chaudhry said that the project was very much in hand and the ministry understood its importance in securing energy supplies for the country. “We have taken every scenario into consideration, including the sanctions against Iran.”

The petroleum ministry official said that despite threats of losing ties with US companies, investors from Dubai, China and Germany had shown interest in financing the deal, Chaudhry said. “We have targeted January 2012 to start construction of the pipeline and trust me, financiers are out there,” he added.

Iran and Pakistan signed the historic pipeline deal in March this year under which 750 million cubic feet of gas will be pumped daily by mid-2015. The 7.5-billion-dollar project, dubbed as “peace pipeline”, will snake out of Iran’s South Fars field into Balochistan and Sindh provinces.

Chaudhry said that there was a proposal to involve state-run companies in arranging funds for the project. “There is EOBI, OGDCL and State Life for making the initial investment.”

Pakistan has been looking at internal sources to fund the gas pipeline as financing from international lenders becomes shaky in the wake of UN sanctions on Iran.

According to the secretary, the Petroleum Ministry had sought legal opinion of international experts to ‘go around’ the sanctions. “We are studying every option,” he added.

Under a force majeure clause of the gas sale purchase agreement, the project can be stopped if sanctions are imposed on Iran. According to a government official, the government would setup a Liquefied Natural Gas (LNG) terminal in Gwadar if the project failed to materialise.

The sindh’s gas field Zamzama was endangered last week of flood water entering in to it after a breach of Tauri Bund, located some 70 kilometres from Guddu Barrage on the right side of the Indus River. An excerpt from Daily Times gives more details.

The Sui Southern Gas Company (SSGC) has come to the rescue of Zamzama gas field and deployed men and heavy machinery to strengthen the highly vulnerable parts of the breach by covering it with sand.

The Zamzama gas field experienced flooding after a breach of Tauri Bund, located some 70 kilometres from Guddu Barrage on the right side of the Indus River.

In the wake of this development, SSGC Managing Director Dr Faizullah Abbasi and Sui Northern Gas Pipeline Limited (SNGPL) MD Abdul Rashid Lone visited the gas field and the areas around it on Wednesday to personally inspect the sudden inflow of floodwater and formulate a plan to utilise all possible resources to alleviate the damage in and around the field.

Dr Abbasi gave special instructions to Project Director (Special Projects) Arbab Mohammad Hashim to immediately deploy more manpower and heavy machinery to the affected area and closely monitor the flood situation around-the-clock. He instructed SSGC’s project director to expedite the process of strengthening the highly vulnerable parts of the breach by covering it with sand.

In our last post, we highlighted the lack of control of OGRA over the LPG price dynamics. Now, OGRA has taken notice of the situation and have warned all LPG marketing companies to refrain from overcharging practices and follows the authority fixed prices. This dawn news report gives the details:

Oil and Gas Regulatory Authority on Friday fixed the maximum consumer price for liquefied petroleum at Rs95 per kg and issued stern warning to LPG marketing companies involved in price manipulation.

The authority fixed the maximum reasonable consumer price of locally produced LPG at Rs80 per kg and for imported LPG at Rs95 per kg. It also determined the price for mix of local and imported LPG at Rs82.71 kg.

The prices are applicable for all the urban and rural areas of the country except AJK, Fata and Gilgit-Baltistan where additional Rs30 for an 11.8-kg cylinder may be added to each type of LPG due to higher transportation cost.

Taking advantage of the leniency of the regulator, the LPG marketing companies and LPG distributors are selling the fuel at exorbitant rates up to Rs135 per kg in some parts of the country.

Ogra Executive Director Operations Sarmad Aslam took serious notice of the situation and issued warnings to all the LPG marketing companies to refrain from overcharging and follow the prices fixed by the authority otherwise punitive action would be taken against the manipulators.

He also advised the provincial governments to ensure that no company/distributor be allowed to charge more than the reasonable price determined and fixed by the authority.

Ogra said that strict action would be taken against companies failing to supply LPG at the determined prices which include heavy fines and revocation of their licences.

The authority however maintains that LPG is a de-regulated product and its prices are determined by market forces but under prevailing conditions the authority has intervened to ensure that cartels are not formed for charging a high consumer price of LPG.

Meanwhile, Chairman All Pakistan LPG Distributors Association Abdul Hadi Khan talking to Dawn on Friday said that the current crisis had arisen after PARCO shutdown and supply curtailment from Dhodak gas fields.

However he added that Ogra and the Petroleum Ministry should take action against the cartel of local LPG producers who were minting money from the consumers rather than fixing LPG price.

He alleged that local producers were charging Rs55,000 per ton for LPG which actual costs between Rs8,000 to Rs10,000 per ton.

He further said that due to cartel of local LPG producers, importers were facing serious financial risk.

In our last post on the Synthetic Natural Gas (SNG); we discussed that LPG when mixed with air in right proportion, gives a perfect replacement for Natural Gas. While mentioning, the potential opportunities SNG can provide we said that Industries can use it as an alternate/back-up gas during the Natural Gas (NG) shutdown or curtailments times. In this post we shall discuss the importance of this alternate gas for industries and its need in the coming times.

In Pakistan, NG crisis are no different than energy crisis. Earlier we had NG shutdown hours/days only in winters, now we even have them in summers. With this happening it is easily predicted that in coming times or not thinking of far in the coming winters the NG shortage is going to get worst.

Managing Director Sui Southern Gas Company (SSGC), Dr Faiz Ullah Abbasi, has affirmed this while addressing a recent business gathering. He has said the at the problems regarding the supply of gas in the coming winter would become more serious as compared to the last year, as the demand and supply gap has started to widen.

On the other side the oil and gas sector has also fell victim to the recent floods. The Business Recorder article “Gas loadshedding crisis to further worsen ” gives more details.

The gas load shedding crisis is going to further worsen on account of 375 MMCFD gas suspension from country’s largest Qadirpur gas field because of shutdown of compressors of Sui Northern Gas Pipeline Limited (SNGPL) due to flood. While addressing a press conference, Federal Minister for Petroleum and Natural Resources Syed Naveed Qamar claimed that country had enough stock of fuel oil to meet its requirements.

“All sectors excluding domestic consumers will face more gas load shedding due to suspension of gas supply from Qadirpur gas field in SNGPL system,” Qamar said adding that effort would be made to provide maximum gas supply to power sector to avert power shortage. Minister also ruled out that flood water had entered Qadirpur gas field.

“SNGPL would devise a new gas load shedding plan for all sectors excluding domestic consumers,” Minister maintained.

More: http://www.brecorder.com/index.php?id=1090459&currPageNo=1&query=&search=&term=&supDate=

Such a situation is very alarming for all industrial sectors which are dependent on the NG supply. The shutdown will greatly affect their production process, making it slow or even reducing their full production capacity.

As SNG can be used interchangeably with NG it makes a powerful tool to strategically manage winter Natural Gas shortage or NG load shedding. The industrial sector must seriously consider opting for SNG as their can be no other permanent alternative source/back-up to natural gas.

Crosspost from TelecomPK

Of the various uses of mobile technology, one interesting use of the technology for Gas or Oil Pipeline Operators is for Remote Cathodic Protection (CP) Monitoring.

The traditional way used to monitor CP is the manual measurement of potential risks by a dedicated team of field engineers and technicians. This required an operator to physically go out to the field and collect readings on a quarterly basis. Records showed that, a pipeline of 128 miles could take up-to three weeks to complete. Not to forget the labor, time and cost involved in this effort.

Now, using the GSM technology  a complete M2M turn-key solution can be provided for web-based wireless remote monitoring systems for the oil, gas, irrigation, water/wastewater, and similar industries. The technology gives a reliable solution for data acquisition with low-cost telemetry, well-packaged hardware and easy-to-grasp web-based data presentation.

The flow diagram below shows how it really works.

This is one way mobile technology is used in the oil and gas industry. I believe more of such viable solutions can be made to help the agricultural sector.

After many years of discussions, politics and negotiations Pakistan and Iran signed the gas pipeline deal last month. To see a historical perspective, see the below image from 2005. India is no longer part of the deal. Also note the US reaction, via Dawn.

Construction on the pipeline should begin this year and be operational by 2014, said Abdul Basit, a foreign ministry spokesman.

Iran and Pakistan signed an initial pact in June last year and reached agreement on pricing in September. Under the terms of the final deal signed Tuesday, Iran will supply 750 million cubic feet a day of gas to Pakistan for 25 years.

The pipeline has been on the drawing board since the mid-1990s, when Iran and India signed a deal to transport gas through Pakistan. Dubbed the “Peace Pipeline” because of hopes it would lead to a détente between rivals India and Pakistan, the $7 billion, 2,700-kilometer pipeline project was stalled as the two nations almost went to war in 2001.

India dropped out last year amid continued security concerns in Pakistan’s Baluchistan province, home to a militant Islamist separatist movement, and over disagreements between the parties on pricing.

The scaled-down project could still face further delays. Militants blew up another gas pipeline in Baluchistan in August, highlighting the difficulties Pakistan’s government faces in operating in the poor but resource-rich province. Some details of the Iran-Pakistan pipeline also remain unclear, including how much it will cost and how the countries will finance the project given U.S. opposition.

Federal Minister for Petroleum and Natural Resources on Friday told National Assembly that the government was making serious efforts to end the load shedding of gas from next year. During question hour, he informed the house that the government was giving incentives to the oil and gas exploration companies for ending load shedding from the country.

Pakistan and Iran are expected to sign an agreement on Iran-Pakistan (IP) Gas Pipeline Project in Turkey during March 8-10, 2010. After signing of the project between the two countries, it would be completed within a period of 3-4 years. This would resolve all issues relating to gas load shedding in the country due to smooth supply of gas from Iran on regular basis, he added.

Responding to a question, he said the government is working on a project to import Liquefied Natural Gas (LNG) to meet the domestic requirements. It would also be instrumental in checking shortage of gas. He said that the load management of natural gas was formally observed for the first time on December 1, in 1982. However, due to lack of proper planning in the past the problem could not be resolved. Load management of gas could only end permanently after matching of supply and demand.

The Oil & Gas Pakistan Forum 2010 with special emphasis on “Solutions for Sustainability – Pursuit for Steadier Markets” concluded in Islamabad today with speakers providing perceptive insight. Experts stressed on the need to capitalize on the enhanced stability in the global Oil & Gas business, pledging a realignment of policies for a robust future and a collective strategy to recover from the setbacks of the previous years and the need for technology as a driver for future oil and gas initiatives.

More than 300 delegates from government, regulatory bodies, prominent oil & gas companies, stakeholders, members of the Diplomatic Corps and media attended the day-long conference supported by the Petroleum Ministry, MOL Pakistan, Eastern Testing Services and other partners.

The Federal Minister for Petroleum and Natural Resources, Syed Naveed Qamar delivered the Keynote Address, in which he highlighted the most attractive features of the liberal Petroleum Policy and urged the local and foreign E&P companies to proactively enhance their activities and investments in Pakistan for higher productivity. He assured the forum of his complete support and the government’s resolve to protect their interests. Mr. Mehmood Saleem Mehmood, Secretary Petroleum was also present.

Mr. Janos Feher, Chairman, Pakistan Petroleum Exploration & Production Companies Association (PPEPCA) stressed the need for a collection strategy to achieve sustainability and build a steadier, safer and productive market for the oil and gas sector in Pakistan.

Mr. Menin Rodrigues, Chairman of the Conference & CEO of SHAMROCK Communications (Pvt.) Limited in his opening remarks appreciated the efforts of the sector specialists and emphasized the emerging opportunities and challenges in this evident phase of stabilization in this industry across the globe.

Well researched Papers were presented in the various sessions to discuss critical topics including; Regulatory Framework, Incentives, Opportunities, E & P Infrastructure, Business models, Geopolitical Issues; Depleting Reserves, Alternate Energy and Impact of Prices on Economies and an outlook of global perspective. The sessions were chaired by distinguished personalities like; Mr. Saquib Mohiuddin, CEO, Business Support Fund, Ministry of Finance; Mr. Tauqir Sadiq, Chairman-OGRA and Mr. Rune Stroem, Country Director-Asian Development Bank.

The eminent speakers included Janos Feher, Chairman, Pakistan Petroleum Exploration & Production Companies Association (PPEPCA), Dr. Shahab Alam, Director-Petroleum Ministry; Tashfeen Qayyum, CEO, Eastern Testing; Shahrukh Kiyani, Manager Projects, Mari Gas Company Ltd., Sohail Kiani, President-SARF Canada, N.A. Zuberi, Executive Director, Private Power Board; Abbas Bilgrami, Managing Director, Progas and Samir Ahmed, Managing Director, National Commodities Exchange Limited (NCEL).

Mr. Rune Stroem, Country Director Asian Development Bank, gave an indepth overview of the global and regional oil and gas sector opportunities against the backdrop of economic conditions in the respective areas. He said, “Pakistan’s energy issue was a financial issue”. Concluding the conference Dr. Gulfaraz Ahmed, Former Secretary Petroleum eloquently stressed a restructuring of the energy infrastructure with the involvement of professional talent and to harness the country’s vast reserves of natural gas. The conference ended with a vote of thanks and appreciation to the organizers for a well-managed conference

Shamrock is organizing a conference for Oil and Gas industry in Pakistan. For more details, please visit Shamrock Conferences web site