The government has decided to initiate a survey of electricity consumers to address issues of power theft, line losses, power companies’ losses and circular debt.

According to sources in the ministry of finance, power distribution companies will conduct the survey, which is part of a broader strategy chalked out by the Asian Development Bank, the World Bank and the Planning Commission to tackle the energy crisis.

A survey for the Islamabad Electric Supply Company (IESCO) has already been finalised as part of a pilot project. Feedback from the project will be funnelled into finalising the survey for power distribution companies.

The survey is expected to discover the amount of electricity consumed by each consumer, the number of commercial, industrial and residential consumers in each distribution company’s vicinity, the amount of electricity consumed by public institutions and the amount of defaulters in each category.

According to the current project, the size of electricity bills will also be reduced. In the IESCO pilot project, bills are expected to be reduced in size by 20 to 25 per cent. The project will also collect data on consumers by partnering with the National Database Registration Authority (Nadra). Proposals to bill consumers through email and text messaging are also under consideration.

From Tribune

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.

An interesting report from DAWN summaries the Asian Development Bank report which holds the Ministry of Water and Power and NEPRA (National Electric Power Regulatory Authority) responsible for power crises the country faces.

The Asian Development Bank has held two major power sector stakeholders — the Ministry of Water and Power and the National Electric Power Regulatory Authority (Nepra) — responsible for most of the ills Pakistan’s power sector is facing today, including loadshedding, system losses and high tariffs.
This puts a serious question mark on the performance of the two public sector institutions designed and set up to solve electricity problems and remove consumers’ sufferings. They have been blamed for stalling or delaying reforms launched by the government more than two decades ago.

In its “Technical Assistance Completion Report” on creation of Central Power Purchasing Agency (CPPA), the ADB said there had been setbacks to its technical assistance because of lax attitude of Pakistan authorities; it provided another opportunity to the lender to sell another technical assistance for strengthening the regulatory regime.

Because of delays in obtaining internal approval within the government, several milestones, including the establishment of CPPA, could not be achieved. “There were significant delays encountered i.e. converting the market rules guidelines into formal statutes; the incorporation/registration of CPPA and finalisation of its budget; and the nomination of its chief executive officer and senior management. The CEO still remains to be appointed by government after nearly 18 months of its inception,” ADB’s principal energy specialist F.C. Kawawaki said on Monday.

“The weak capacity of Nepra to formulate market rules delayed the implementation process and the ADB was requested to process a follow-up technical assistance to help Nepra in developing market rules,” he added.

Since 1998, the government has been implementing a strategic power sector restructuring and unbundling plan to end the persistent power crisis through increased investments to address longstanding fiscal, technical and fiscal deficits.

The ADB report said that the reforms process had been slow and power supply and infrastructure requirements did not keep pace with the rising demand, thereby constraining growth potential and the country’s competitiveness.

“The current generation shortfall is close to 40 per cent of the installed capacity and coupled with the overstressed power infrastructure results in eight to 10 hours of forced power outages. The inter-circular debt to the tune of Rs250 billion, which is nearly 40 per cent of the sector’s annual revenues, accentuates the situation,” it said.

The CPPA is a key organisation to look after contractual obligation between the government and power producers and between the producers and purchasers.

Although the power sector in Pakistan is mature enough to graduate towards formation of an independent CPPA, “a lack of thrust in political will impeded its implementation in true spirit”. Although consultants have submitted deliverables within agreed timeframes, “the weak capacity of the executing agency and political will of the water and power ministry have stalled the full establishment and operations of the CPPA”.

The ADB said that a lot apparently had been contingent in resolving major structural, technical, fiscal and governance gaps and implementing reform agenda on the part of the government: Nepra’s capacity to initiate the policy reforms that could convert the guidelines on market rules for electricity trading into formal industry regulations and solve circular debt problems had been marginal.

It said the government was also not ready to institutionalise the CPPA model because of exogenous factors like severe power shortages and emergency of ballooning circular debt.

“The creation of an effective CPPA without addressing or restructuring the past financial and fiscal deficits of the sector as well as without providing adequate safety valves to avoid such future recurrences has not been an effective exercise,” the bank said, adding that prior to CPPA creation, the government should have laid emphasis on resolving systemic, structural and fiscal constraints in the sector that had led to circular debt.

On its part, the ADB has learnt the lesson that experiences in one market cannot be directly replicated into another. A thorough plan based on ground realities is critical for success of any new institutional arrangement, particularly of the already challenged power sector.

The report said the ADB should not allow its international consultants to avoid travelling to Pakistan on security excuses.

The recent floods have not only caused loss to human lives and infrastructure but the water lost was also worth to irrigate 40 million acre of land. Following excerpt gives the details:

Pakistan lost water worth Rs240 billion due to lack of dams and water reservoirs in the country.

Chairman Fauji Fertilizer Company talking to media men said a quantity of water needed for irrigating 40 million acres land has been wasted. He said Rs6 billion worth of water is required for irrigating 1 million acres land.

According to economic experts, due to absence of political harmony the country not only faced worst ever floods but also failed to store water worth Rs240 billion.

The government is facing difficulties in unloading oil consignments from ships because of port congestion and infrastructure limitations, resulting in supply shortages in flood affected areas of Sindh, Khyber Pakhtunkhwa and Northern parts of the country.

Sources in the petroleum ministry told Dawn on Monday that the country’s oil consumption had dropped by about 50 per cent after the recent floods as transport activities had substantially slumped because of damage caused to the road infrastructure.

They said the stocks of petroleum products diesel, furnace oil and petrol were enough for more than 28 days of the country’s usual requirement but transportation problems were resulting in short supplies in many parts of the country, particularly in Sindh and Gilgit-Baltistan.

A senior government official said that because of supply disruptions, there were reports of overcharging and artificial shortage by the private petroleum dealers in many areas where stocks were more than enough for the local consumption.

He said the petroleum ministry issued a directive on Monday to the provincial governments and Oil and Gas Regulatory Authority (Ogra) to take note of the situation and conduct raids on petrol pumps to ensure smooth sales and sufficient stocks of petroleum products.

He said the provincial governments and Ogra had also been asked to seal premises and impose fines on dealers who were engaged in short supplies or overcharging customers.

The sources said at least four ships loaded with furnace oil petrol and diesel were waiting for unloading at the Karachi port.

He said a number of locations along the Indus Highway in Sindh including Shikarpur, Kashmore and Jacobabad could not be supplied with petroleum products because of heavy floods and inundation of roads and other infrastructure facilities.

Likewise, oil supplies in Gilgit-Baltistan and Khyber Pakhtunkhwa were also facing shortages of petroleum products due to heavy damages to roads, bridges and allied transport network. They said the government initially considered to airlift petroleum products in these areas but was now finding it difficult to access such locations even through helicopters.

[via DAWN News]

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.

The state oil company, PSO already in litigation along with Petrosin over the auto-gas deal, it has now being disclosed by the company MD that a power group is involved in supply scams involving selling of cheap oil ahead of monthly price adjustments.

Here is an excerpt that appeared in Dawn News today.

A fresh scam in the oil supply chain surfaced on Thursday when the management of state-run Pakistan State Oil (PSO) officially confirmed that a powerful group in the company was involved in selling cheap oil to influential dealers ahead of monthly price adjustments to enable them to charge higher rates from consumers.

As the managing director of the country’s largest oil supplier, Mr Irfan Qureshi, broke the news before the National Assembly’s Standing Committee on Petroleum and Natural Resources, the committee’s chairman, Shaikh Waqas Akram, demanded an inquiry and its report within a week to identify officials involved in manipulating the supply chain to the benefit of dealers.

Mr Qureshi told the committee that PSO officials were found providing petroleum products to dealers on credit at the end of each month in anticipation of an increase in prices to earn a windfall at the cost of PSO. He said two officials had been held accountable for being involved in the malpractices and an inquiry had been in progress since April.

He said the practice had been going on for years and had now been brought to an end. He said six officials at the Lalpir depot had been suspended for embezzling Rs100 million. He said whenever the PSO took action against corrupt officials, courts reinstated them.

Read more: http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/the-newspaper/front-page/powerful-group-in-pso-involved-in-supply-scams-370

Synthetic Natural Gas (SNG) is a blend of Liquefied Petroleum Gas (LPG) and Air that is a direct replacement source for Natural Gas. Working on the fundamentals of fuel interchangebility, the LPG-Air mix/blending is an invisible application of LPG not known to many.

The oppurtunities SNG, also known as Substitute Natural Gas, provides include:

Using it as an industrial back-up (during the Natural Gas shutdown/curtailments).

Using it a base fuel to serve area not under service of Natural Gas.

Using it to suppliment Natural Gas during peak demands known as peak shaving.

SNG is made by mixing the vapour LPG with air to a ratio of approximately 45% air and 55% LPG. Why mixing? Becasue LPG is a highly concentrated source of energy, with 2516 BTU’s per cubic foot gross heat content. Which is too rich to be used as a substitute for natural gas without dilution. If the Natural Gas and SNG have an indentical Wobbe Index, they will produce equivalent energies and will combust in the same amount of air. Thus the mixer blends in just the right amount of air and LPG; producing a mix of specific gravity 1.31 (1480BTU/Cu.Ft) and Wobbe Index that will match that of the Natural Gas.

This interchangeable use of SNG and NG makes it a powerful tool to startegically manage Natural Gas shortage.  In the coming posts we will discuss the details of this strategy and technical aspects of SNG.

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.

FFC Energy Limited (FFCEL) has finalised contracts of Engineering, Procurement and Construction (EPC) and Operation and Maintenance (O&M) with Nordex of Germany for development of 50 Megawatt Wind Power Project at Jhimpir, Sindh.

FFCEL is a fully owned subsidiary of Fauji Fertiliser Company Limited (FFC), while Nordex AG is a leading manufacturer of Wind Turbines in the world. Founder and Chief Sales Officer of Nordex Carsten Pedersen and Lieutenant General Malik Arif Hayat (Retd) CE & MD, FFC & FFCEL exchanged the contract documents, a press release issued here said.

Arif Alauddin, CEO Alternative Energy Development Board (AEDB) Pakistan was also present at the ceremony. FFCEL shall soon be filing Tariff Petition with NEPRA for the project. The construction of the project, shall begin after Tariff approval from National Electric Power Regulatory Authority (Nepra) and signing of Energy Purchase Agreement between FFCEL and Central Power Purchase Agency. The project, once operational, shall address electricity shortage in the country and will also help the economy by providing cleaner, sustainable and economical electricity to the nation.

FFC has further planned to develop and establish more renewable energy projects in Pakistan to contribute towards fulfilling Pakistan’s electricity needs through captive renewable resources. To that end, FFC has already obtained Letter of Intent (LOI) of additional 100 MW Wind Power Projects from (AEDB)

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