Tawanai

Talks are going on between Pakistan and Iran on the gas pipeline deal. Do you think it will work out or do you think that the conditions are not good for this deal?

Business Recorder writes:

Pakistan and Iran are said to have agreed to resolve the disputes on gas pipeline project in accordance with the United Nations Commission on International Trade Law (UNCITRAL), sources in Petroleum Ministry told Business Recorder.

The two countries are expected to trim the Gas Sale Purchase Agreement (GSPA), possibly during the current week, to materialise the much-delayed multi billion dollars project.

On April 8, 2009, the Federal Cabinet gave approval for the project, subject to the condition that, for the present, Pakistan should not commit to purchasing more than 750 mmcfd gas, against the initial plan of one billion cubic feet, at offered crude oil parity of 80 percent.

Gas, Infrastructure, Pakistan

Both industries and consumers have been hit hard by the natural gas shortage. New connections for industrial areas have been tightly controlled over the last many months. Sui Northern Gas Pipelines Limited (SNGPL) is planning to add 250 mcf per day additional gas in the system from June this year. The natural gas supply in Pakisan has significant problems of theft and other losses. Sui Gas company has large amounts unsetteled with Wapda and consumers as well.

The managing director of SNGPL said that company was trying to reduce line losses. Rs 1.5 billion have been allocated to reduce the losses up to 6 percent from the current level of 8 percent. The company was also trying to minimise gas pilferage as the government has been asked to enact law to award severe punishments to discourage gas theft which is currently 50 percent of total losses, he informed. Currently there is no effective legal act under which gas pilferage complaint is registered and culprits punished accordingly, he added.

Via Business Recorder.

Conservation, Energy, Gas

According to Aleternative Energy Board of Pakistan, a global seismic belt passes through Pakistan and the country has a long geological history of geotectonic events. The Geotectonic framework shown above indicates that Pakistan should not be lacking in commercially exploitable sources of geothermal energy. AEDB is working on a preliminary study on technical, economical and market aspects of geothermal utilization possibilities and detailed feasibility studies for geothermal energy utilization. Let’s take a look at what Geothermal energy is?

We have prepared a concise summary of Geothermal power and its use in the world – aggregated from various top sources.

Geothermal power is energy generated by heat stored in the earth, or the collection of absorbed heat derived from underground, in the atmosphere and oceans.  As of 2008, geothermal power supplies less than 1% of the world’s energy. Geothermal power requires no fuel, and is therefore virtually emissions free and insusceptible to fluctuations in fuel cost. And because a geothermal power station doesn’t rely on transient sources of energy, unlike, for example, wind turbines or solar panels, its capacity factor can be quite large; up to 90% in practice.

Geothermal has minimal land use requirements; existing geothermal plants use 1-8 acres per megawatt (MW) versus 5-10 acres per MW for nuclear operations and 19 acres per MW for coal power plants. It also offers a degree of scalability: a large geothermal plant can power entire cities while smaller power plants can supply more remote sites such as rural villages.

Geothermal resources range from shallow ground to hot water and rock several miles below the Earth’s surface, and even further down to the extremely hot molten rock called magma. Wells over a mile deep can be drilled into underground reservoirs to tap steam and very hot water that can be brought to the surface for use in a variety of applications. Geothermal power is generated in over 20 countries around the world including the United States, Iceland, Italy, Germany, Turkey, France, The Netherlands, Lithuania, New Zealand, Mexico, El Salvador, Nicaragua, Costa Rica, Russia, the Philippines, Indonesia, the People’s Republic of China, Pakistan, Japan and Saint Kitts and Nevis. Chevron Corporation is the world’s largest producer of geothermal energy.

A global seismic belt passes through Pakistan and the country has a long geological history of geotectonic events. Several projects are  on the roll these days which include Remote Sensing Studies, geothermal geology, geothermal hydrogeology, hydrogeochemical Studies, geophysical Studies and preliminary Study on Technical, Economical and Market Aspects of Geothermal utilization possibilities and detailed feasibility studies for geothermal energy utilization. Projects like these if being managed and properly financed by Pakistani government should result in a major solution for meeting the energy shortage.

A 2006 report by MIT, that took into account the use of Enhanced Geothermal Systems (EGS), concluded that it would be affordable to generate 100 GWe (gigawatts of electricity) or more by 2050 in the United States alone, for a maximum investment of 1 billion US dollars in research and development over 15 years. The MIT report calculated the world’s total EGS resources to be over 13,000 ZJ. Of these, over 200 ZJ would be extractable, with the potential to increase this to over 2,000 ZJ with technology improvements – sufficient to provide all the world’s present energy needs for several millennia. The key characteristic of an EGS (also called a Hot Dry Rock system), is that it reaches at least 10 km down into hard rock. At a typical site two holes would be bored and the deep rock between them fractured. Water would be pumped down one and steam would come up the other. The MIT report estimated that there was enough energy in hard rocks 10 km below the United States to supply all the world’s current needs for 30,000 years.

Conservation, Consumers, Economics, Electricity, Energy, Environment, Gas, Renewable Energy, Uncategorized

Merril Lynch issues regular updates on the macroeconomic conditions in the country. Here is what they wrote about the oil and gas industry situation in the December 24th update.

Drilling activity is slow to pick up in 1HFY09. Only four exploration and two development wells were drilled up to November, according to PPIS, relative to the full-year target of 40 and 50 wells, respectively. The full-year drilling target is likely to be revised down.

Relative to its peers, production surprises are limited for PPL. The expected production growth of 2-3% in
FY09 depends on completion of phase II expansion phase on Tal block.

Gas, Investment, Oil, Pakistan

Pakistan is facing hard time as the shortage of Petroleum and Gasoline has hit the country. From the last couple of weeks there has been an era of difficulty on Industrial, consumer and contractor basis. The economical situation of the country is not stable. With this artifical shortage of petroleum and gas the industries are in trouble. Industrialists fear that they would not be able to meet their orders in time. Many industries are being closed or shut down as a result of these issues. As the price of petrol came down there has been a reverse effect. Petrol stations are closed as government is unable to provide petrol to people. Instead of saving Pakistani government stopped the inflow of petrol into the country. People on the other hand have started making rumours of why there has been such shortage. Some think its going to the military where as some say that its an artificial shortage. On the latest news till now the prime minister has requested Iran to aid Pakistani to meet the oil shortage.

On the other hand Sui Northern Gas Compnay has also limited its supply and then again industries and consumers are paying the price for it. There is a word out these days called “Gas Load Shedding”. The company has failed to provide gas to CNG stations and homes. Shortly after the petrol was available on the filling stations, CNG went out. There was not a single gas station open in Lahore at the day time because of the shortage. The CNG station owners say that out of 15% there is 2% gas available to them which is not a good number. In Lahore CNG stations start there business at the midnight and go till 8 in the morning. Both the domestic consumers and the industrialists have protested heavily against the government.

The oil and gas shortage is a threat to Pakistan’s economic stability. If the industries are shut down there would be no domestic or foreign investment. The stock markets will fall. Government has a limited time barrier to come over these problems or to face heavy damages to the infrastructure of the country.

Consumers, Economics, Energy, Gas, Infrastructure, Investment, Oil, Petrol

Government is trying to discourage the use of gas and it has come up with a great scheme: increase the price of gas and place the burden on consumers!

The government is likely to pass on 10 percent raise in gas price to compressed natural gas (CNG) consumers from January 1, 2009. This was decided in a meeting chaired by Advisor to Prime Minister on Natural Resources Dr Asim.

Details from Business Recorder.

The Oil and Gas Regulatory Authority (OGRA) has already allowed the Sui Northern Gas Pipeline (SNGPL) and Sui Southern Gas Company to charge 7.83 percent increase in gas tariff rates effective from January 1, 2009. Gas utilities had demanded over 41 percent gas tariff hike from new calendar year.

It was proposed that 5.05 percent hike in gas prices should be passed onto the fertiliser sector. The meeting discussed a proposal to raise the price for independent power producers (IPPs) by 36 percent, which would equate the price for IPPs and the thermal power plants of Water and Power Development Authority (Wapda).

It was also proposed to raise gas price by 7.5 to 7.64 percent for all types of consumers. The proposal to raise price by 3.85 percent for all types of the consumers was rejected. The meeting also noted that 5 percent gas increase should be passed on to the consumers of the first three slabs that are currently exempted from gas increase. During the first half year of the current financial year government had notified 31 percent gas price hike but exempted consumers of the first three slabs.

The consumers consuming up to 50 cubic metres fall under the category of first slab, 50-100 second slab and 100-200 cubic metres third category. The government had earlier exempted these consumers from hike in gas prices but now it is proposing that 5 percent hike in gas prices should be passed on to these consumers. It is also being proposed to raise prices by 7 percent for domestic consumers of higher slabs. The higher slabs are 400-500 above 500 cubic metres per month.

Consumers, Economics, Gas