Oil, Gas and Refinery Projects update

[ghazi52]

PSO in talks with Power China for new refinery project

KARACHI: State-run Pakistan State Oil (PSO) is in talks with Power China for a partnership in an estimated $8 billion refining project in the country, industry officials said on Wednesday.

An agreement is expected to be signed ‘very soon’, said an official, however, he had no firm details on the particulars of the agreement.

Prime Minister Khaqqan Abbasi witnessed the signing of memorandum of understanding (MoU) between PSO and Power China for the construction of up-country deep conversion oil refinery and laying of crude oil pipeline during a visit at the Boao Forum recently.

The refinery would likely have a capacity of 250,000 barrels/day (bpd) to 300,000 bpd/day.

Officials said the projects aim to supply uninterrupted crude oil and finished products in Punjab, Khyber Pakhtunkhwa and other parts of the country.

Moreover, the pipeline has been designed to avert accidents and maintain smooth supply to other installed refineries.

“The installation of the refinery in Pakistan would be a good omen for us as nearly 70 percent of the needs of petroleum products have been met through imports,” said analyst Abdul Azeem at Spectrum Securities.

“It would strengthen the earnings of PSO, and in addition would help reduce the volume of the import bill for petroleum products.”

Currently, the country has five refineries having combined capacity of around 404,000bpd.

Analyst Tahir Abbas of Arif Habib Limited said the signed MoU is a non-binding document, “it is yet to see when the project would materialise”. “But the new refinery should have latest technology and produce less furnace oil.”

Currently, the refineries in Pakistan are producing around 25 percent to 40 percent of furnace oil from their product mix, which has resulted in colossal sufferings following a government decision to close down power plants running on furnace oil back in November 2017. Moreover, reliance on furnace oil going forward is expected to reduce significantly as Pakistan has invested huge amounts in alternate and cheap sources of power generation, including coal- and RLNG-based power plants.

 

[ghazi52]

ISLAMABAD: While extending support to Frontier Works Organisation (FWO), the government of Khyber-Pakhtunkhwa (K-P) has opposed the laying of an oil pipeline from Machike to Taru Jabba (Nowshera) by Inter State Gas Systems (ISGS), a federal government entity.

FWO and ISGS have emerged as potential competitors to build the vital oil pipeline.

A public hearing was conducted by the Oil and Gas Regulatory Authority (Ogra) in Peshawar for the grant of licence for constructing the oil pipeline that was estimated to cost $370 million.

 

[ghazi52]

ECC approves incentive package for new oil refineries

ISLAMABAD: The Economic Coordination Committee of the Cabinet (ECC) Friday approved a landmark incentive package for setting up modern new Deep Conversion Oil Refinery Projects, anywhere in the country, including expansion of existing refineries of minimum 100,000 barrels per day capacity.

The decision aimed at attracting investment in the country, came at the meeting of the ECC chaired by Prime Minister Shahid Khaqan Abbasi here at the Prime Minister Office.

The package would also be applicable to PARCO Coastal Refinery project (PCR) and comes with a 20-year income tax holiday. It would include exemption from all duties, taxes, surcharges and levies on import, by the refinery project, its contractors or any other persons. It would be applicable on all machinery, vehicles, plant and equipment, other materials and spares and consumables for setting up, operation, maintenance and repair of the refinery.

The package also includes exemption from withholding tax and all other duties, taxes, surcharges, levies and import relating to foreign contractors, subcontractors and their personnel in connection with engineering, procurement, construction, commissioning, operation, maintenance and repair of the refinery. Sales Tax and Excise Duty on supply of locally manufactured building and construction of material, equipment and service for setting up of the refinery would also be exempted.

The meeting decided that the new refinery projects would be given a pricing mechanism which shall be no less favorable than the prevailing mechanism. The new projects would also be facilitated in project infrastructure such as Single Point Mooring (SPM), jetties, sub-sea, land pipelines etc. The package also grants waiver to applicable Development Surcharge on the value of exports under the EPZA Rules 1981 in case the refinery project is set up in the Export Processing Zone.

This decision would facilitate establishment of modern new refineries in any part of the country and would ensure sustained supply of petroleum products to various parts of the country at affordable prices, besides reducing the import bill of petroleum products.

 

[ghazi52]

One of the largest Oil Refinery is likely to be built near Lahore to cater for the energy needs of the province.

The Chinese company has initiated work on the feasibility for setting up deep conversion oil refinery close to Lahore for catering to the upcountry’s needs. The estimated cost of the mega refinery hovers at $6 billion including the construction of the crude oil pipeline from port city to Lahore.

On the sidelines of Boao Economic Forum recently held in the month of April in China and attended by Prime Minister Shahid Khaqaan Abbasi, Pakistan State Oil (PSO) and Power China for the construction of the upcountry deep conversion oil refinery and crude oil pipeline. The project will help reduce the cost of transporting petroleum products via road from refineries in southern areas and also ensure uninterrupted supply.

Pak-China working group on setting up mega project of oil refinery in Lahore has been set up and to this effect Chinese company has started working on the feasibility study. Petroleum Division (Energy Ministry) has written a letter to the government of Punjab asking for the allocation of 1000-1200 acres of land, a senior official told.

Keeping in view increasing POL needs after the completion of projects under CPEC umbrella, Pakistan is going to install two mega deep conversion oil refineries one at Lahore and other at Khalifa Point, HUBCO and more importantly the government has asked the existing oil refineries to upgrade. Upcountry refinery to be set close to Lahore and Khalifa Point refinery will produce the POL products at par with the Euro-5 products. The Lahore refinery will be having the capacity to refine 250,000-300,000 barrels per day.

To a question, the official said that Lahore refinery will be provided the crude oil through a pipeline that will be laid down either from Karachi or from Somiani port, Balochistan. The experts say the laying of pipeline from Somiani will be more feasible and practical as in Karachi, the congestions of pipeline has aggravated.

The official said that this very vital project will be executed under Public Private Partnership (PPP) mode. By 2030, the demand of the petroleum products in upcountry that include Punjab, KPK, and Northern Parts of the country will inflate up to 60 million tons and it is a wakeup call for the existing refineries to upgrade themselves to cater to the future needs of the country.

More importantly, the financial closure of Khalif Point Refinery has also been achieved. Pak-Arab Refinery Company (PARCO) will establish Khalif Point Refinery with a capacity to refine the crude oil up to 300,000 barrels per day.

 

[ghazi52]

Total Parco opens 600th service station

LAHORE: Total PARCO Pakistan Limited (TPPL) inaugurated its 600th new service station concept at the premises of Star Petroleum Raiwind Road, Lahore. The site was jointly inaugurated by TPPL senior management represented by TPPL CEO Olivier Marc Sabrie and Paul Crane, Vice President Retail & Logistics, Total Marketing & Services – Asia Pacific & Middle East and service station dealer Tahir Mahmood Butt. This milestone reflects TPPL’s determination to demonstrate its long-term commitment to the local development of Pakistan.

 

[ghazi52]

Attock Oil Group of Companies in British Era

 

[ghazi52]

ExxonMobil acquires 25% stake in offshore drilling in Pakistan

A study would be conducted in the potential areas allocated to the four companies before undertaking drilling activities. PHOTO: FILE

ISLAMABAD: In a major development, US energy giant ExxonMobil has acquired 25% shareholding in offshore drilling in Pakistan.

Earlier, Oil and Gas Development Company (OGDC), Pakistan Petroleum Limited (PPL) and Italian energy firm Eni had 33% stake each in offshore drilling in the country. Now, ExxonMobil has acquired 25% shareholding, reducing the share of all partner companies to 25% each.

An agreement in that regard was signed at the Prime Minister’s Secretariat on Monday among ExxonMobil, Government Holdings Private Limited (GHPL), PPL, Eni and OGDC.

ExxonMobil has vast experience of offshore drilling for the search of hydrocarbons and it will help boost efforts of partner companies for oil and gas exploration in the country.

Offshore drilling has brought a revolution in the US oil and gas market and even shaken the monopoly of Organisation of Petroleum Exporting Countries (OPEC) – a global grouping of major oil producers and exporters.

A new technology in offshore drilling is a major reason behind the boost to shale oil and gas exploration and officials believe ExxonMobil will help bring state-of-the-art technology to Pakistan. The company has been working on oil and gas exploration in different countries and Pakistan has now become part of its expansion plan.

“An agreement has been signed with ExxonMobil that will acquire 25% shares in offshore drilling in Pakistan,” GHPL Managing Director Mobin Saulat told The Express Tribune.

Another official said a study would be conducted in the potential areas allocated to the four companies before undertaking drilling activities.

In its first assessment, the US Agency for International Development (USAID) estimated that Pakistan had massive deposits of 10,159 trillion cubic feet of shale gas and 2.3 trillion barrels of shale oil – figures that were several times higher than those released by the US Energy Information Administration (EIA).

According to the EIA assessment in April 2011, Pakistan had 206 trillion cubic feet of shale gas in the lower Indus Basin, of which 51 trillion cubic feet were recoverable. However, in June 2013, it revised the estimate upwards to 586 trillion cubic feet, of which 105 trillion cubic feet were technically recoverable.

Apart from this, the EIA saw the presence of 9.1 billion barrels of shale oil that were technically recoverable out of estimated deposits of 227 billion barrels.

In its study, the USAID collected data of 1,611 wells, used 70% of data to prepare the study and sent samples to New Tech Laboratory in Houston for assessment.

Though technology is available in advanced countries for tapping shale reserves, environmental concerns, requirement of a huge quantity of water and high cost of drilling are real challenges. A well requires three to eight million barrels of water. Pakistan has water supplies, but the real issue is its disposal.

Estimates suggest shale gas will cost $10 per million British thermal units, which will come down with the increase in recovery of untapped reserves.

 

[ghazi52]

HDIP to upgrade fuel-testing labs

ISLAMABAD: The Hydrocarbon Development Institute of Pakistan (HDIP) will execute two projects worth Rs270 million for upgrading its testing labs to ensure provision of quality petroleum products to consumers. An amount of Rs220 million had been allocated for upgrading the Karachi Laboratories Complex under the PSDP 2018-19 while Rs50 million had been allocated to upgrade HDIP’s petroleum testing facilities in major cities, officials told APP.

They added that the Karachi lab would be equipped with a complete range of petroleum products’ testing facilities on a par with international standards for maintaining quality fuel supply. Under the second project, the HDIP will upgrade its laboratories in Islamabad, Lahore, Multan, Peshawar and Quetta for testing locally produced and imported petroleum products.

 

[ghazi52]

From Gwadar- Kashgar: Crude oil pipeline requires $10 billion investment

ISLAMABAD: The Frontier Works Organisation (FWO) and foreign investors have estimated an investment of $10 billion in laying a crude oil pipeline from Gwadar to Kashgar that will have transmission capacity of one million barrels per day.

The federal cabinet, in its recent meeting, was informed that engineering company FWO, in cooperation with private-sector foreign investors, wanted to build a crude oil pipeline from Gwadar (Pakistan) to Kashgar (China) and had requested the Petroleum Division to sign a memorandum of agreement that would assure the investors that Pakistan government would not take over the planned investment.

 

[ghazi52]

Pakistan, Russia set to sign $10b offshore pipeline deal next week

ISLAMABAD: In a major breakthrough, Pakistan and Russia are poised to sign a $10-billion offshore gas pipeline deal, a project planned by the latter to capture the energy market of Pakistan.

Sources told The Express Tribune that the cabinet had approved the signing of the gas pipeline laying deal and Pakistan ambassador to Russia had been authorised to ink a memorandum of understanding with Moscow.

The envoy is likely to ink the understanding in Moscow on Monday. Final cost of the project will be assessed following a feasibility study to be conducted by Russian energy giant Gazprom.

 

[ghazi52]

1930s: It is the first oil well of Attock Oil company in Khaur distt Attock.
Attock Oil Refinery - Rawalpindi

 

[ghazi52]

White Oil Pipeline to be completed by first quarter of 2019
https://tribune.com.pk/story/1741050/2-white-oil-pipeline-completed-first-quarter-2019/
The pipeline will have a capacity of 12 million tons of transporting oil from the port city to Machike, a hub of oil depots situated in central Punjab.

SHEIKHUPURA: The new White Oil Pipeline (WOP) will be completed by the first quarter of 2019, which will help strengthen the company’s supply chain process, said Shell Pakistan Limited Managing Director Jawwad Cheema.

Once completed, the pipeline will have a capacity of 12 million tons of transporting oil from the port city to Machike, a hub of oil depots situated in central Punjab.

He further said that the company has decided to make significant investments of Rs5.5 billion besides this project.

“SPL is the largest private shareholder of the multi-grade conversion WOP and the project is the need of the hour for the country’s growing oil demands besides improving the safety standards of oil supply chain,” Cheema said in an inaugural ceremony of inducting 100 new state-of-the-art oil tankers in the company’s fleet at Shell terminal Machike, Sheikhupura on Saturday.

These huge investments come after last year’s incident of Ahmedpur Sharqia.

Last year, an explosion occurred after an oil tanker toppled near Ahmepur Sharkia, and the company’s management decided to induct new oil tankers to its fleet.

Soon after the incident, Shell engineers worked with an OEM in China to develop enhanced tank lorry designs that comply with the country’s, international and Oil and Gas Regulatory Authority (OGRA) required fleet standards.

“The company’s sales dropped substantially after the tragic incident as the company removed all trucks from its supply chain, which were not meeting the safety standard,” he said.

“Our marketing share dropped to 11% from 18% due to that incident. Since then the company has been working to improve the safety standards of lorries.”

On a question about the oil terminal in Gwadar, Cheema mentioned that the government of Pakistan was evolving policy for oil city in Gwadar. Once the government will announce the policy, the private sector will come there to invest.

SPL External Affairs Manager Habib Haider said that the multi-grade conversion of the WOP will significantly reduce primary movement of fuel by road.

 

[ghazi52]

KARACHI: Minister for Maritime Affairs and Foreign Affairs Abdullah Hussain Haroon on Friday said that ExxonMobil has indicated that it is close to hitting huge oil reserves near the Pak-Iran border, which could be even bigger than the Kuwaiti reserves.

Addressing business leaders at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the minister said that ExxonMobil — an American multinational oil and gas company — has so far drilled up to 5,000 meters close to the Iranian border and is optimistic about the oil find.

The Government of Pakistan, he said, has already taken an undertaking from the company to set up a generation complex worth $10 billion.

The government is also encouraging Chinese and Western investment in the country, he added.

He further said that there is a need to integrate the Karachi Port and Port Qasim so that they could supplement each other in the larger interest of the country.

On the occasion, he said the Pakistan National Shipping Corporation (PNSC) has sufficient funds for purchasing two vessels but this will be done by next government.

The minister said that there is greater need to have new area for fish harbour because the existing one has many issues and there is shortage of land. However, he regretted that the harbour is not well kept and hoped that the European Union (EU) will give subsidy for new fish harbour.

“Foreign investors are interested in coming to Pakistan, provided we manage to meet their standards and attract them to make investment,” he stressed.

The minister advised that ports should be developed so that they could meet the country’s demand on the basis of its markets and products and fully supported the Karachi Port Trust (KPT) development projects highlighted by KPT Chairman Admiral Jamil Akhtar.

Responding to a question, Mr Haroon said that there was no need to give Pakistani land to foreigners, adding: “There is need that as a nation should take up such projects of national importance.”

Published in Dawn, August 4th, 2018

 

[ghazi52]

OGDCL makes oil & gas discovery at Chanda oilfield in Kohat

The block is operated by OGDC with 72 percent stake along with 17.5 percent and 10.5 percent stake of GHPL and ZPCL respectively

LAHORE: Oil and Gas Development Company Limited (OGDCL) on Monday announced the discovery of crude oil and gas at Chanda oilfield situated in Kohat, Khyber Pakhtunkhwa.

In a notification sent to the Pakistan Stock Exchange (PSX) on Monday, OGDCL said it discovered oil and gas in an exploratory well named Chand X-1 located in district Kohat, Khyber Pakhtunkhwa.

The block is operated by OGDC with 72 percent shareholding along with 17.5 percent and 10.5 percent share of GHPL and ZPCL respectively.

“This is the first discovery of crude oil and gas from Hangu formation in Chanda oil field,” said the notification.


In a comment to Profit, Maha Jafer Butt Director Research Capital Stake said, “The well is already functional and adding to the company’s bottom line.

This addition is not expected to have a huge impact but it does draw attention to the potential existing in the area.”

Head of Research, Arif Habib Limited Samiullah Tariq while speaking to Profit about the oil discovery said: “It will have an impact of Rs0.2 per share, although the discovery isn’t very significant.

It will help in furling more ventures in the country’s oil and gas sector and the discovery size is expected to be 2.2mmcfd of gas and 700bbl per day.”

He added “The discovery has been made in a hydrocarbon-rich area of Khyber Pakhtunkhwa, which has immense potential.

In a comment to Profit, Adnan Sheikh Pak Kuwait Investment Co AVP Research said, “It’s a workover of an old well that was already flowing, the discovery is insignificant considering OGDC produces over 40000 barrels per day, however, this shows the field may still have potential produces.”

The notification added “The structure of Chanda Well number 1 was tested during workover (re-completion) using OGDCL’s in-house expertise and in close collaboration with the teams of GHPL & ZPCL.

The well has tested 700 BPD of crude oil and 2.2 MMSCFD of Gas through 32/64” choke at wellhead flowing pressure of 1150-1200 Psi from Hangu and Lumshiwal formation.“

OGDCL stated in December 1999, “Lumshiwal was tested only 150 bpd of crude oil and 0.86 mmcfd of gas through 32/64” choke at well-head flowing pressure of 160-190 Psi and the additional contribution of 550BOPD and 1.34MMSCFD gas is from Hangu Formation which has been tested for the first time in Chanda structure. The well has been completed to take comingle production from Lumshiwal and Hangu formations.”

OGDCL is an exploration and production company and is engaged in the exploration, development and production of hydrocarbon products.

Its exploration licenses (ELs), and development and production leases (D&PLs) include approximately 60, and over 69 owned and operated joint venture ELs and D&PLs. Its exploratory assets cover an area of approximately 112,453 square kilometres.

OGDCL shares were trading at Rs 150.20, down Rs0.57 (-0.38 percent). KSE-10 index was trading at 40,541.67 points, down 313.10 points (-0.17 percent) at the time of filing this report.

 

[ghazi52]

OGDCL makes oil & gas discovery at Chanda oilfield in Kohat

Oil and Gas Development Company Limited (OGDCL) on Monday announced the discovery of crude oil and gas at Chanda oilfield situated in Kohat, Khyber Pakhtunkhwa.