Category Archives: Oil, Gas and Power

International Power selling its total shareholding of 17.4% in Hub Power Company Hubco

Karachi: International Power Monday announced it has entered into two separate sets of sale and purchase agreements in connection with its holdings in Hubco and Uch 1 assets in Pakistan. International Power is selling its total shareholding of 17.4% (approximately 202 million shares) in The Hub Power Company Ltd (Hubco) at a price of 31 Pakistan Rupees per share, representing a total consideration of close to Rupee 6.3 billion.

International Power press release said buyers are Dawood Hercules Corporation Limited, its wholly owned subsidiary DH Fertilizers Ltd, and their affiliates, for 16.4%, and Allied Bank Limited for remaining 1%. Operations and Maintenance (O&M) for Hub plant will continue to be carried out by an International Power subsidiary.

Separately, International Power is acquiring an additional 20.1% of Uch 1 (a 551MW gross CCGT) from CER (majority owned by Swicorp, a private equity company), taking Group’s holding up to 94.6% (521MW net). There will be no change to International Power’s 100% holding in Uch 2 (375MW), which is currently under construction.

IPRGDF SUEZ Asia has longstanding interest in Pakistan power market. These transactions represent optimization of “our portfolio, where sale of Hubco offers an attractive return and additional interest in Uch 1 will result in an increased ability to maximize synergies between two adjacent Uch plants. Uch has a strong position in merit order, burning indigenous gas,” press release said. Both transactions are subject to certain regulatory consents and other approvals and are expected to be completed by May 2012. Hubco owns 1,200MW oil-fired Hub plant and 214MW oil-fired Narowal plant as well as a controlling interest in 84MW Laraib hydro power plant.

International Power enters into SPA with Dawood Group, Allied Bank to sell its entire holding of 201mn shares

ISLAMABAD: National Power International Holding BV (International Power), the major shareholder of Hubco (17.44% holding) has entered into share sale purchase agreement (SPA) with Dawood Group and Allied Bank to sell its entire holding of 201mn shares, says a press release issued her on Monday.

Pending regulatory approval including consent from Government of Pakistan transaction would be at a price of Rs31 per share translating into cumulative amount of Rs6.3bn (US$70mn).

Following the exit of Xenel and now International Power, Pakistan’s second largest IPP, will now be primarily owned by local players. At the time of project inception in 1994 the two sponsors cumulatively owned 34.9% holding i.e. 404mn shares (20.4% by International Power and 14.5% by Xenel).

We continue to maintain ‘Buy’ on the scrip that provides a natural hedge against country and currency risk offering attractive IRR of 24% (US$20%)

Pakistan plans to import 500 mmcfd Liquefied Natural Gas from Qatar

ISLAMABAD: The National Assembly was informed Thursday that Minister for Petroleum and Natural Dr. Asim Hussain has said Pakistan plans to import five hundred mmcfd LNG from Qatar to meet its energy requirements. He told the National Assembly during question hour that an agreement to this effect has been signed with Qatar.

He said the price of LNG is yet to be decided between the two countries. However, it will be in accordance with prevailing international price in the region. The Minister expressed the confidence that the supply of LNG from Qatar will be started within one and a half year.

About Iran-Pakistan gas pipeline project, the Minister said that keeping in view the accrued benefit of the project every possible step is being taken for its fast track implementation. He said a contract has already been signed with an international consortium for timely financing of this important project.

He informed the House that eighty-five gas and oil wells have been drilled in the country during the last four years. Dr. Asim Hussain told the House to a question that the circular debt of the Petroleum sector stands at 396 billion rupees. He said the government retired the debt of 130 billion rupees last month.

He said a high level committee headed by the Finance Minister has been constituted to sort out the issue on permanent basis. He said Planning Division is moving a summary for rationalization of power tariff and removal subsidies.

About gas shortage, the Minister said that the installation of massive number of CNG stations have become a burden on the system. However, steps are being taken to provide gas to the domestic consumers on priority. He said the gas pressure situation will improve as soon as the temperature is normalized.

Minister for Science and Technology Mir Changez Khan Jamali said keeping in view the energy shortfall, work has been started on the manufacturing of solar energy gadgets including solar streets lights, water heaters and fans.

He said National Institute of Electronics is also working on the design and development of LED lights to be illuminated through solar energy. Minister for Defence Chaudhary Ahmad Mukhtar said that more aircraft will be inducted into the fleet of Pakistan International Airlines to avoid flights delay and provide better travelling facilities to the passengers.

Besides, he said the government is encouraging the private airlines and licenses to them are issued to them within forty days. Minister for Law Maula Bakhsh Chandio told the House that credible and error free electoral rolls are being prepared in collaboration with NADRA which will be used for the next general elections. He said the final electoral rolls are expected to be published by the end of May this year.

The Minister Eunuchs have been given the right to cast vote in the general elections. A total of 782 Eunuchs have so far been enrolled in the electoral rolls. Replying to a question, the Minister said the government has finalized the new petroleum policy to expedite oil and gas exploration. He said under this policy licenses will be issued for drilling of 150 blocks.

He said the government is committed to Iran-Pakistan gas pipeline project and work on it will be completed well before 2014. Defence Minister Chaudhary Ahmad Mukhtar said that rules will be followed for the purchase of new aircraft for the PIA. In the first phase, we will get aircraft from Boeing on lease while in the second phase aircraft will be procured from Airbus.

Fate of 551 CNG pumps hangs in balance

ISLAMABAD: The Ministry of Petroleum and All Pakistan CNG Association (APCNGA) on Monday failed to reach any decision over the suspension of gas supply for 551 CNG stations in the Punjab.

A high-level delegation of APCNGA led by Ghiyas Abdullah Paracha met Mohammed Ejaz Chaudhary Secretary Petroleum here to discuss matters related to CNG industry.

Talking to reporters, Ejaz said that there is no proposal on behalf of Petroleum Ministry to government to further increase CNG prices. However, he added if the cabinet or Planning Commission in future is going to do so, his ministry could arrange a consultation meeting between APCNGA and Planning Commission.

Petroleum Ministry and APCNGA would hold a formal meeting on March 10 in Lahore , wherein all outstanding issues would be discussed, the Secretary Petroleum maintained.

Paracha said that APCNGA has conveyed all requests of CNG body to Secretary Petroleum. He said that on March 3 Petroleum Ministry suspended gas supply to 551 CNG stations in Punjab set up after 2008, saying that these CNG stations have gas supply contract for nine months.

Paracha said SNGPL has suspended gas supply to 551 CNG stations on the directives of Petroleum Ministry.

The government estimates that during the last few years, gas production has increased by only 7 percent while its consumption has increased by 40 percent per annum.

CNG sector is identified as the major user of gas whose consumption has increased by 39 percent per annum over the last few years.

Another official of APCNGA said that government has imposed a ban on import of CNG kits and cylinders, which is also opposed by investors in automobile and kits manufacturing sectors.

LPG price increase by Rs 5,353 to record high of Rs 118,429 per ton

KARACHI: Liquefied Petroleum Gas (LPG) price was on Saturday raised by Rs 5,353 to record high of Rs 118,429 per ton in accordance with Saudi Aramco Contract Price (CP), says chairman FPCCI Standing Committee on LPG & patron-in-chief All Pakistan LPG Distributors Association (APLDA) Abdul Hadi Khan.

He said Saudi Aramco CP surged to record high due to increase in prices of butane by $140 per ton and propane up by $220 per ton. LPG domestic price was increased by Rs 5 to Rs 135-145 per kilo, 11.8 kilo cylinder by Rs 66 to Rs 1520-1580 and 45.4 kg cylinder by Rs 243 to Rs 5850-6075.

Hadi said distributors will protest against this rise and said APLDA emergency general body meeting convened next week to prepare line of action. According to him LPG sale declined by 49 to 50% due to high prices, further shrinking business of over 6000 LPG distributors in the country. He urged Petroleum Minister to reduce dependence on imported LPG and concentrate on enhancing local production.

European Union to financially support Munda Dam, establish micro hydro projects

ISLAMABAD: Ambassador of Head of European Union EU Delegation to Pakistan, H.E. LarsGunnar WEIGMARK on Thursday called on the Federal Minister for Water and Power, Syed Naveed Qamar and expressed their interest to financially support Munda Dam project and to establish micro hydro power projects in various parts of the country.

He said that EU is keen to invest in the power sector of Pakistan to help resolving the energy crisis particularly development of the far flung areas. He briefed the Minister on EU country programme for Pakistan and stated that rural development, good governance and better use of water are their priority areas under the programme.

He said that they have planned to establish community based hydro projects in one thousands union councils of Malakand, small hydro plants in northern areas and Khyber Pakhtunkhwa. The EU has also granted 70 million euros for rehabilitation and up gradation of two power plants in Multan and Faisalabad while 30 million euros have been allocated for small hydro plants in northern areas. A programme of solar pumps has also been designed for Balochistan including others for its development. Some of the countries under EU commission are already funding various water and power and energy conservation projects individually or with the collaboration of donors in Pakistan.

The Minister for Water and Power, Syed Naveed Qamar thanked the EU and said that the energy sector in Pakistan is very huge sector and has big potential for investment. He said that the proposal for establishing small hydro projects in Northern Areas and KPK will be expedited. He asked the delegation to also consider bio fuel projects, anti flooding and alternative energy generation projects.

The Minister said that the government is working on various small and mega projects to generate electricity for country’s future needs. He said that hydel and indigenous resources are our future focus for cheaper electricity.