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

The Pakistan government is offering investors in the Emirates its stakes in nine corporations, including the country’s largest lender and its biggest oil and gas exploration firm, as it seeks to reduce debt.

Officials from Pakistan’s privatisation commission along with JP Morgan, the lead manager on the project, recently concluded a series of presentations to investment houses including the Abu Dhabi Investment Authority, one the largest sovereign wealth funds in the world, as well as Emirates Investment Authority, Abu Dhabi Investment Corporation and Invest AD.

“Eventually the government will sell all its shareholding,” said Waqar Ahmed Khan, the privatisation minister. “We are doing the number crunching, developing baseline formulas and doing evaluations for a number of projects.”

The holdings in the first batch of companies are expected to be sold within the first half of next year, he said.

The government may sell its holdings in firms including the National Bank of Pakistan, which has assets of more than US$10 billion (Dh36.73bn).

Oil and Gas Development Corporation and Pakistan Petroleum, two oil and gas exploration companies, the energy firms Faisalabad Electricity, Kot Addu Power and Jamshoro Power, Pakistan Post Office and State Life Corporation of Pakistan, the country’s biggest life insurer, are also on offer.

The government is also offering its remaining 42 per cent stake in Habib Bank. The Agha Khan Fund for Economic Development owns the majority stake in Pakistan’s largest private commercial bank.

Via The National, Abu Dhabi

Dawn has published a report which criticizes the exploration effort for gas in Pakistan.

The government has sought a report from the Oil and Gas Development Company Limited (OGDCL) over ‘inordinate delay’ in the exploration of Pakistan’s largest gas field in Balochistan that has the capacity to make all imported fuel options redundant and save billions of dollars in foreign exchange.

Official documents made available to Dawn suggest that the Kohlu exploration block, spread over an area of 2500 square kilometres, possess an estimated reserves of about 22 trillion cubic feet, which are a little less than Pakistan’s total current proven gas reserves of about 29 trillion cubic feet (TCF).

‘This is such a big project for the country’s energy security that the government cannot afford to keep it in cold storage indefinitely,’ a senior government official said.

‘We have also taken up the issue with the prime minister who has assured full support and promised to take it up with the provincial government and security agencies,’ he said.

Of the 22 TCF, according to preliminary estimates, more than 15.4 TCF reserves are described as ‘recoverable.’ At $5 per million British Thermal Unit (MMBTU), the total value of 15.3 TCF translates into about $80 billion or around Rs6800 billion. Based on the current gas demand in the market, these reserves are believed to be sufficient to meet the energy requirements for several decades.

Petroleum ministry sources said that the OGDCL had been asked to furnish a detailed report on the Kohlu block by Dec 25, along with latest position of exploration and development being made to overcome security concerns following the recent Balochistan package announced by the prime minister.

The picture shows a specially designed rig which is used to drill more than a thousand meters down and gradually turn 90° to follow the gas-rich shale deposit. The rig will drill half a dozen wells at the site in East US.

Photo credit: Technology Review