India plans to export gas to Pakistan

NEW DELHI: India’s plans of exporting gas to Pakistan via a pipeline from Jalandhar in Punjab to the Wagah-Attari border will soon become a reality.
In his maiden budget presented in the Lok Sabha, Finance Minister Arun Jaitley exempted Liquefied Natural Gas (LNG) imports from customs duty if it is meant for onward sale to the neighbouring nation. “Exemption from basic customs duty (of 5pc) is being granted on re-gassified LNG for supply to Pakistan,” the budget said.

This will set the stage for the state-run Gail India Ltd, which plans to build a 500-crore pipeline to export five million units per day of re-gassified-LNG to Pakistan, to start work on the ground. “It’s an important project that will help improve bilateral diplomatic and economic ties between the two neighbours,” Dharmendra Pradhan, Minister of state for Petroleum, told Hindustan Times.

“Broad parameters have been agreed to and a contract will also be signed shortly between the two sides after which it will take one year to build it,” Gail CMD BC Tripathi told the newspaper.

Interestingly, citing security concerns, New Delhi has put on hold a plan to be part of a 10,000-crore pipeline originating in Iran, passing through Pakistan and terminating in India to carry gas from Iran’s South Pars Gas Fields. Security experts felt that being dependent on gas coming via Pakistan could compromise India’s energy security.

But the Gail pipeline will be built entirely on Indian territory and terminate at the border, thus, making it relatively safer.

Gail will import LNG in ships at ports on the Indian west coast and then pipe the gas to Jalandhar. The proposed 110-km pipeline will then carry the fuel to the Wagah-Attari border, from where Pakistan will supply it to Lahore.

The source added that Gail, which imports LNG at $13-14 per unit, would sell the gas to Pakistan at around $21. The cut in customs duty will bring down the cost.

300 CNG stations closed down in Punjab due to non-supply of gas

Islamabad: The All-Pakistan CNG Association (APCNGA) has said that more than 300 compressed natural gas (CNG) filling stations have been closed in Punjab, while thousands are on the verge of economic failure due to partial supply of natural gas and irrational pricing.

The number of closed down CNG stations have been increasing creating problems for the masses, increasing unemployment and decreasing the income of the government, said APCNGA Supreme Council Chairman Ghiyas Abdullah Paracha.

In a statement issued here, he said that the natural gas allocated for CNG industry is being diverted to other sectors so that their profits could increase. He said that CNG industry is being deprived of natural gas despite the fact that it is the only sector which has no other alternative while other sectors have substitutes.

Seven workers laying gas pipeline electrocuted

MUZAFFARGARH: Seven workers were electrocuted when they were laying a gas pipeline near Basira village, some 15 kilometres from here.

A metalled pipe touched the main power transmission line accidentally on the sandy dunes, electrocuting them on the spot. Four died immediately and the other three died on the way to hospital. They were connecting the the Turkish Colony housing flood-hit people and a hospital with a natural gas supply line on Saturday evening.

The deceased were identified as: Adnan, Javaid, Muhammad Ali, Liaquat Ali, Yasin, Irshad Ali and Shehzad. They all belonged to Okara district. Police, hospital and rescue officials confirmed the deaths.

Muzaffargarh DPO Rai Zamirul Haq said a contracting company was working round-the-clock to complete its task before the arrival of Turkish Prime Minister Recep Tayyip Erdogan and Prime Minister Nawaz Sharif to visit the hospital and colony, constructed with the financial assistance of the Turkish people.

Gas leak kills six at giant India steel plant

RAIPUR: A poisonous gas leak at one of India´s largest steel plants killed six people overnight and injured 31 others, a factory official said on Friday.

Deadly gas escaped from one of the blast furnaces at the flagship Bhilai Steel plant run by the Steel Authority of India in central Chhattisgarh state, the factory´s chief spokesman said.

"Six industrial workers have been killed and 31 others injured due to leakage of carbon monoxide gas from one of the blast furnaces," Vijay Mairal told.

Six of the injured were in a "severe condition" in hospital in the city of Bhilai, he said.

A statement from the company said the main water pump suddenly ruptured on Thursday night, resulting in a loss of pressure in the pipes supplying water to the blast furnace. As the workers were fixing the rupture, gas from the furnace entered the damaged pipes and leaked, the statement said.

Mairal said the incident will be investigated thoroughly but that the priority was to assist those affected.

The plant in Bhilai in Durg district, some 40 kilometres (25 miles) west of state capital Raipur, produces 3.15 million tonnes of saleable steel annually.

The plant is India´s sole producer of rails and heavy steel plates.

India

Gas supply to PM Secretariat, Parliament House, others cut

 

ISLAMABAD: Gas supply to the Prime Minister’s Secretariat, Parliament House, Parliament Lodges, Federal Shariat Court, Governor House, Murree, and other government departments was suspended for not clearing their dues, a private news channel reported on Monday.
According to the Sui Northern officials, Rs7.7 million dues are outstanding against the Parliament Lodges while the PM Secretariat is a gas defaulter of Rs4.7 million.Surprisingly, the Parliament House has to pay a sum of Rs1.3 million to gas regulators against its outstanding dues and the Federal Shariat Court owes Rs224,000 to gas utilities.The Governor House, Murree, has also been included in the list of gas defaulters as bills amounting to Rs188,000 are pending against it.

Pakistan should stop power, gas theft: ADB

 

ISLAMABAD: The Asian Development Bank (ADB) has asked Pakistan to stop power and gas theft as an increase in their tariffs may increase inflation.
The Bank will provide Islamabad $3 billion over a three-year period, said its country director Werner E Liepach on Tuesday.“The ADB is going to disburse between $500 million and $600 million in the current fiscal year - before June 30. Further, we are expecting to provide between $900 million and $1 billion each year, over the next three years, in the shape of project aid and programme loans,” said Liepach, while addressing a news conference to launch the Asian Development Outlook (ADO) report for 2014.

According to the report, Pakistan’s economy is heading towards improvement and net international reserves held by the central bank will jump from $5 billion dollars to $9 billion within a few months. The ADB expects inflows from privatisation proceeds, foreign donors, the auction of 3G/4G licences as well as other measures.

Flanked by ADB’s economist Farzana Noshab, Liepach said that the bank had revised upward its GDP growth projection for Pakistan from 3 percent to 3.4 percent for 2013-14. This growth rate is marginally slower than the rate in FY13.

However, cautioned Liepach, inflation would rise to nine percent in FY14 as a consequence of the expected increase in the gas and electricity tariffs.“Things are improving,” he said, citing reasons for appreciating the government policies. “But Pakistan’s economy willhave to consolidate in 2014 and 2015 by pursuing reforms. And then the stage will be set for higher growth trajectory in the range of six to seven percent per annum in the subsequent years that can dent poverty and bring prosperity in the lives of the people of Pakistan.”

Liepach said macroeconomic and security challenges continue to weigh on the economy. Agriculture is expected to be weaker due to a drop in cotton output, which will partly offset the improvements in sugarcane and rice production. Ongoing rains, however, may benefit the upcoming wheat crop, despite a reduction in the sowing area this year.

However, the ABD believes that the pickup in large scale manufacturing, which grew by 6.7 percent during the first six months of FY14 (three times the rate during the same period a year earlier), may compensate for the weaknesses of the agriculture sector.

The report expects larger and more reliable power supply, partly due to better load management as well as the increasing use of alternative fuels. This, in turn, is expected to help revive the production of food, fertilisers, chemicals, electronics, and leather products, while petroleum refinery output will continue its robust growth.

Textiles are expected to stage a recovery from their weak growth trajectory due to the benefits of the Generalised Scheme of Preferences Plus status granted by the European Union to Pakistan from January 2014.

According to the report, in the first eight months of FY14, inflation averaged 8.6 percent, reflecting the one-percent increase in the general sales tax rate to 17 percent, increases in power tariffs in August and October 2013 for commercial and bulk residential and industrial users, and significant currency depreciation against the major currencies.

Reflecting the shortages in the supply of perishable items and higher wheat prices, food inflation rose to 13 percent in November 2013 before receding to 7.2 percent in January 2014, making for an average of 9.3 percent over the eight-month period. Core inflation was relatively stable and averaged 8.4 percent during the period.

Further adjustments to electric and gas tariffs, as well as a levy to support gas infrastructure development, are expected to keep inflation high over the forecast period, said the report. Average consumer price inflation is projected at nine percent in FY14 and 9.2 percent in FY15.

The authors of the report believe that achieving fiscal sustainability will remain a major challenge for policymakers in Pakistan.The report said that the fiscal discipline had eroded in recent years with the persistent need to finance expanding energy sector subsidies, growing losses incurred by state-owned enterprises and high expenditures for security.

Pakistan’s tax-to-GDP ratio stood at 8.5 percent in FY13, which is one of the lowest in the region and reflects structural and administrative issues, notes the report. As a result, spending for badly needed infrastructure has relied largely on foreign inflows.

Additional spending requirements have emanated from consecutive natural disasters in the past few years, as well as from the need to establish social safety nets, added the report.

Higher fiscal deficits and very limited foreign inflows during the past two years increased significantly short-term domestic borrowing, causing interest payments to balloon.Moreover, high government borrowing from commercial banks also contributes to low private sector credit.

The report noted that the domestic portion of public debt rose sharply for the second year in a row, from 38 percent of GDP at the end of FY12 to 41.5 percent in FY13, to finance high fiscal deficits.

Foreign debt fell by 4.6 percent of GDP in FY13, mainly as International Monetary Fund’s debt was repaid. Total public debt (including external liabilities) at the end of FY13 amounted to 63.3 percent of GDP, exceeding the legal limit of 60 percent set under the Fiscal Responsibility Debt Limitation Act of 2005.

The federal government is implementing its fiscal framework under the IMF’s 3-year programme.According to the ADB report, the implementation on fiscal framework in the aftermath of 18th constitutional amendment and NFC (National Finance Commission) Award is challenging.

Efforts would be required from federal and provincial governments alike, as some taxes (notably on agriculture) fall under provincial administration and reforms would help enhance their own revenues.

Currently, over 90 percent of provincial revenues are transfers of federal shared taxes. As provinces have assumed a greater share of federal resources and spending responsibilities through devolution, their fiscal performance has become even more important in relation to the national fiscal outcomes.

A mechanism to ensure provincial fiscal discipline is likely to be a crucial consideration in the upcoming discussions for the 2015 award, the report concluded.

Pak-Iran gas pipeline project can’t be completed, NA told

 

ISLAMABAD: Petroleum Minister Shahid Khaqan Abbasi has told the National Assembly that the Pak-Iran gas pipeline project cannot be completed due to international sanctions on Iran.
He said this while replying to a question from MNA Shazia Marri during the Question-Hour here on Friday. No further implementation of the Pak-Iran gas pipeline project is in progress as international sanctions stand slapped on Iran, said the minister.

He said even if the project was accomplished, Pakistan could not acquire gas till the sanctions were scaled back. The previous government had also not implemented this project, he said. He told the House that work on the LNG terminal had started. The terminal will become functional by November 25 this year. No talks have been held with Qatar on the pricing formula so far, he added.

To another question, he said the price of petroleum products will be worked out for importing the LNG. Replying to a question from Naeema Kishwar Khan, Parliamentary Secretary Raja Javed Ikhlas told the House that selling of arms to the Kingdom of Saudi Arabia (KSA) was not under consideration. No license for establishment of any ordnance factory in the KPK had been issued to anyone except Wah Factory.

Parliamentary Secretary Shahzadi Omarzadi told the House that she expected the import of LNG would start by the end of this year. Talks are continuing with Qatar for importing LNG, she added.

Parliamentary Secretary Chaudhry Jaffar Iqbal told the House that the Supreme Court had given five months for conducting the Local Bodies (LB) polls and these elections will be held within this stipulated period.

State Minister Sheikh Aftab Ahmad said the SC had ordered during the previous general elections that the right to vote be given to overseas Pakistanis. He added that a bill in this regard was under debate in the Senate Standing Committee on Law and Justice and further progress will be made in line with the committee’s report. The Election Commission of Pakistan and Pakistani embassies functioning in other countries have also been informed in this regard, he said. The government wants that the overseas Pakistanis are given the right to vote in 2018, he added.

Dera Bugti gas pipeline blown up

DERA BUGTI: A 16-inch diameter gas pipeline at Pirkoh blew was blown up on Friday here.

Levies sources said some unknown persons blew up the Pirkoh gas transmission 16-inch pipeline from well nos. 15, 21 and 27 to the purification plant, severing supply of gas to the plant.

Pakistan Petroleum Limited (PPL) sources said that repair work would start no sooner the security clearance was available.

Russia won’t switch off gas supply to Europe-Oettinger in magazine

BERLIN: European Energy Commissioner Guenther Oettinger does not expect Russia to switch off gas supplies to Europe over the Ukraine crisis, he told German magazine Wirtschaftswoche in an interview published on Saturday.
"I don't believe it would be in Russia's interests," Oettinger was quoted as saying.
Russian gas export giant Gazprom issued a thinly veiled warning on Friday that it could stop shipping gas to Ukraine over unpaid bills.
Ukraine is a major gas transit nation for supplies from Russia to the European Union, which relies on Russia for about a quarter of its gas.
But Oettinger said a cut-off would not be beneficial for the company: "Gazprom has an interest in its daily sales revenues so that investment is worthwhile and turnover is generated."
Oettinger said if no more gas flowed through Ukraine, it would affect 14 percent of European gas consumption.
In early 2009 Gazprom cut off gas to Ukraine over unpaid bills, leading to reductions in European supplies during a cold winter.
But Oettinger said Europe was better placed to deal with such a scenario given that the winter had been mild, gas storage sites were fuller than a year ago and European Union countries were now obliged to ensure they had 30 days' worth of supplies.
"We're in a better position than we were five years ago," he said.

Ukraine expects gas price of $368.5 per 1,000 cubic metres from Russia

KIEV: Russia's Gazprom is likely to increase the price Ukraine pays for its gas supplies to $368.5 per 1,000 cubic metres in the second quarter of this year, Interfax news agency quoted the Ukrainian energy minister as saying on Sunday.
Russia agreed in December to cut gas prices for Ukraine to $268.50 per 1,000 cubic metres from around $400, as part of a bailout package following Kiev's decision to reject closer ties with the European Union and turn to Russia instead.
The overthrow of Moscow-backed Viktor Yanukovich as Ukraine's president and the new government's pro-Western policies have put that deal in doubt.
"From Russia we expect to pay about $368.5 in the second quarter," Fuel and Energy Minister Yuri Prodan was quoted as telling reporters.

Two gas pipelines blown up in Dera Bugti

DERA BUGTI: Two pipelines of Sui gas have been blown up in Loti and Pirkoh area of Dera Bugti in the wee hours of Wednesday, suspending gas supply to plant from the wells.

According to levies sources, the first incident took place in Loti where unidentified outlaws blew a 8-inch diameter pipeline that supplies gas from well #3 to plant.

Another incident took place in Pirkoh, where a 16-inch diameter pipeline that supplies gas from well #3 to plant were blown up with explosive material.

According to Pakistan Petroleum Limited (PPL) official the repairing work of the pipelines would begin today.

Govt to enhance oil, gas exploration activities through investment friendly policies: PM

ISLAMABAD: Prime Minister Muhammad Nawaz Sharif said on Tuesday the government was making all out efforts to enhance oil and gas exploration activities in the country through investment friendly policies.

He said the government believed in providing level playing field to all foreign investors and oil and gas companies, and assured protection of their investments.

The Prime Minister was talking to Alexander Dodde, Executive Vice President, MOL, who called on him here. Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi was also present.

He said Pakistan had a vast onshore and offshore sedimentary area, out of which only around 35 per cent was under exploration.

He also appreciated professionalism and expertise of MOL and the important role it had been playing in this region for the last 15 years in the development of petroleum and gas sector of Pakistan.

The MOL management in Pakistan deserved applauds for their role in smooth operations of the company, the Prime Minister said, adding that it needed to explore more investment opportunities in oil and gas sector.

He encouraged MOL to acquire new blocks independently or jointly with Pakistan's state owned companies i.e. Oil and Gas Development Company Limited (GDCL) and Pakistan Petroleum Limited (PPL) through competitive bidding process or joint ventures.

Alexander expressed confidence in the government's economic policies and appreciated its efforts to boost energy sector.

Europe less reliant on Russian gas through Ukraine

LONDON: A mild winter and improved infrastructure mean Europe and Ukraine are less reliant on Russian natural gas than in past years, easing worries that the escalating crisis in Ukraine could hurt supplies.
Russia is Europe's biggest gas supplier, providing around a quarter of continental demand. Around a third of Russia's gas is exported through Ukraine, which itself also relies heavily on imports to meet its own demand.
Fears for the stability of supply to Europe increased over the weekend when Russian forces took control of Ukraine's Crimea region and President Vladimir Putin said he had the right to invade his neighbour to protect Russians there after the overthrow of ally Viktor Yanukovich.
Moscow has in the past cut supplies to Ukraine when negotiating prices with Kiev, causing shortages especially in central Europe, which gets most of its supplies from Russia.
Russia's Gazprom said on Monday that gas transit to Europe via Ukraine was normal, but it warned that it might increase prices for Kiev after the first quarter, raising concerns that gas could be used for political leverage in the crisis.
But analysts said a mild winter across Europe had left storage inventories unusually high, easing the impact of any potential supply cut.
They also said improved gas infrastructure meant much of Russia's supplies could go to western Europe via alternative routes, such as the Nord Stream pipeline, which goes through the Baltic Sea to Germany, or through a pipeline that passes Belarus and Poland and also goes into Germany.
"Low utilisation means Ukraine's gas network is of lesser importance today than in the past," Bernstein Research said on Monday in a research note. But analysts warned that a further improvement of the gas infrastructure was still needed.
"Risks for Europe exist always, that is why it should pursue even more diversification projects further and develop liquefied natural gas (LNG) markets and new connectors in central and southeastern European regions," said Anna Bulakh of the International Centre for Defence Studies.
To prepare for a potential disruption, Ukraine's gas transit monopoly Ukrtransgas has also been increasing its gas imports from Russia in recent days, upping its stocks which now stand at four months worth of supplies.
Of Ukraine's 33 billion cubic metres (bcm) storage capacity, Gas Infrastructure Europe (GiE) data shows that around 80 percent is in its far west, so even in the case of a Russian intervention in Ukraine's predominantly Russian east, most storage assets would likely remain safe from seizure.
HEALTHY STOCKS:
After a mild winter, meteorologists expect early spring to bring warmer-than-usual conditions over most of Europe, implying weak gas demand will continue, adding to already high storage levels.
A European Commission spokeswoman said that there was around 40 bcm of gas in the European Union's storage sites, equivalent to almost 10 percent of the bloc's total annual demand.
"Europe is better prepared (than in the past)," said Maria van der Hoeven, Executive Director of the International Energy Agency (IEA) in Brussels.
In Central Europe, which relies heavily on Russian supplies and was hard hit by previous cuts, Czech and Slovak inventories are filled between 35 and 45 percent, equivalent to 90 days of demand, and Polish reserves at over 70 percent of capacity. In Austria, the chief executive of national oil and gas company OMV even said that the country had enough gas to meet half a year of demand.
Hungary's gas stocks are lower, at roughly 22 percent of capacity, but because its inventory facilities are larger in volume, its reserves are still enough to meet almost two months' worth of demand.
Serbian officals also said that its underground gas depots had enough gas to help bridge a potential disruption of supplies from Russia via Ukraine and Hungary.
In Germany, Europe's biggest gas consumer and Russia's largest customer, inventories are more than 60 percent of capacity, equivalent to around 60 days of demand.
Despite the healthy stocks across Europe, benchmark UK gas futures rose by almost 10 percent compared with last Friday's close, to over 61 pence per therm on Monday afternoon.