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NoteEDITOR’S

DEAR READERS, Information is key to success for every business. In today’s world, big data ensures big decisions. It is in the same spirit that Energy Insight focuses on themes and numbers that are fundamentally important for the busy decision makers - from senior executives to management employees working in the local and international markets including, but not limited to, the oil and gas, alternative energy sectors and the allied industries.We are pleased to present the 10th edition of Energy Insight to our readers. The main theme of this edition addresses COAL. Our readers will find informative news and in depth analysis of latest developments going on in the coal industry of Pakistan. It is no secret that coal is considered the worst fossil fuel there is, as the smog, soot and carbon dioxide emitted from coal plants are the main causes of global warming.Despite the controversy, Thar coal project is set to mine Pakistan’s biggest fossil fuel, and is expected to “power the entire nation”. If we look at our neighbouring countries, China produces 70% of its electricity by burning coal, whereas India is the second top coal consumer in Asia. In Europe, coal is the main fossil fuel for Poland which is among the most polluted countries in the world besides China and India.If every cloud has a silver lining, we can probably look up to the country’s first terminal for handling coal, clinker and cement at the Port Qasim Authority in Karachi. The Pakistan International Bulk Terminal (PIBT) has implemented “the best environmental standards for coal handling in compliance with the World Bank Group EHS (Environmental, Health, and Safety) Guidelines”. PIBT strives to make positive contributions to the local communities and the environment.In this edition, we have also covered the biggest B2B event in Pakistan for the oil, gas and energy sector. Pakistan Oil, Gas Energy Exhibition (POGEE) 2018 is one the most prestigious B2B events in Pakistan serving as a platform for enterprises to get together, share innovative ideas and develop business at the highest level.Besides, there are updates on the latest joint ventures into the oil and gas exploration. Pakistan has recently signed a Memorandum of Understanding with Russia & Kuwait. The MoU is an initiative to evaluate future potential business opportunities in international upstream exploration and production.Readers will also get a lowdown on a key petroleum company that has achieved record breakthroughs in handling and refining petroleum products - a milestone in the company’s history. We have also included a variety of statistical reviews of oil import and consumption with indications of how the investment in the oil, gas and energy sectors is going to shape our future. As you will see, we have focused on a highly targeted group of readers who actively support us with their feedback, suggestions, and editorial contributions. Our long term goal is to make Energy Insight, an interactive forum covering all aspects of the industry including the renewables (solar, wind, hydro, geothermal, biomass, wave/tidal), electricity transmission, distribution, as well as the nuclear and traditional coal, oil and gas sectors.Like always, we will look forward to receiving your feedback, and bringing Energy Insight even closer to your expectations.

Happy Reading!

FOUNDING EDITORS.H. Rizvi (Late)

EDITOR IN CHIEFSyed Danyal Rizvidanyal@thesis.com.pk

EDITORRizwan Abbasrizwan@thesis.com.pk

SR. EXECUTIVESALES & MARKETING M. Eijaz Uddin eijaz@thesis.com.pk

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OUR TEAM

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Content

BareEssentials06 Market

Review08 LocalNews09

Key Statistic18 Article21Company inFocus16

Post ShowReport (POGEE)28International

News24 Event Calander27

EventNews30

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PROVEN COAL RESERVES OF THE LEADING COUNTRIES WORLDWIDE IN 2017 (IN MILLION METRIC TONS)

250,916

36,108

160,364

34,375

144,818

25,605

138,819

9,893

97,728

4,881

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Courtesy: Topline Securities – Pakistan’s fastest growing brokerage house

The locally listed energy related sectors consists of Oil & Gas Exploration, Oil & Gas Marketing, Refineries and Power Generation/Distribution. These, together, account for around 26% (US$19bn) of Pakistan’s market capitalization (US$72bn) as of end June 2018. In aggregate, these energy sectors saw their market capitalization down by 6% in Apr-Jun’18. The broader market has shed 8% in capitalization during the period. The largest market capitalization weighted sector among the energy sectors, Oil & Gas Exploration (US$11.7bn), was US$12.2bn, down 5% during the period, which is somewhat lower than overall energy sector as rising international oil prices have improved sentiments of investors in this sector. Refineries and power generation sector performed worst than market (lost 11% and 13% respectively) with former due to lower offtake of furnace oil by power plants in Pakistan, threatening the refineries utilization levels and latter due to burgeoning circular debt in Pakistan. Oil and Gas Marketing sector outperformed energy sector by 3% due to its attractive valuations.

After a 5% devaluation in Dec’17 and Mar’18 each, Pak rupee depreciated by further 5% in Jun’18 against US dollar in the interbank market and was trading at Rs121.56. The currency devaluation is a key event and will serve to strengthen the country’s weak external account. Foreign exchange reserves with State Bank of Pakistan continue to decline and were reported at US$9.5bn as of July 6, down US$309mn over previous week. This is despite the govt. reportedly receiving US$1bn loan from China and some Amnesty flows during the last week of FY18. For 11-months Jul-May’18, external current account deficit (CAD) was recorded at US$16.0bn, up 43% over last year. Further, monthly CAD for April and May were recorded at close to US$2bn/month, which is not sustainable at current low level of foreign exchange reserves. Given this situation, we believe there are three possible scenarios that can unfold: 1) strict measures including further PKR devaluation and interest rate hike, 2) entry into IMF’s program and 3) bailout from friendly countries. We are of the view that

the first two scenarios will likely unfold where the Govt. will take strict measures and enter an IMF program in 2H2018 post general elections scheduled on July 25. Considering our base case where Pakistan will seek IMF funding, we anticipate further devaluation of 8% in FY19 and FY20 which is likely to take PKR/USD parity from current Rs121 to Rs141 by FY20. We also anticipate SBP policy rate to be increased from current 6.50% to 9.25% by FY20 under IMF program. With reform measures, CAD will likely recede during the next few years vs. 5.8% expected in FY18. While we expect CPEC to continue, measures under IMF program could affect projects’ progress to some extent. Due to aforesaid reasons, Pakistan’s GDP growth is likely to slow down to 4.6% in FY19, 4.7% in FY20 and 5.1% by FY21 as against 5.8% of growth in FY18. Timing and quantum of currency devaluation, policy rate hike and smooth transition of democratic government (post General Elections on July 25) will be key triggers for the market.

Market Economy Review – Pakistan Stock Exchange

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NewsLOCAL

Over 400 kilometres section of the TAPI gas pipeline, which will pass through Punjab province should fully conserve and protect agro-economy of the province especially the sugarcane and mango farms of the districts that will come across proposed route of the pipeline.The demand was made by the speakers of a provincial scoping workshop, organized here to take into account Environmental and Social Impact Assessment (ESIA) being done for 825 kilometres-long Pakistan section of the proposed TAPI pipeline.Audience of the seminar were informed that four separate ESIA studies were being conducted for the total 1,814 km-long TAPI project in Turkmenistan, Afghanistan, Pakistan, and India.The project will pass through total 17 districts of Pakistan including nine of Punjab and rest of Balochistan.Environmental Management Consultants (EMC) Pakistan organised the workshop as being the local associate of international consortium of consultants, NAFTEC/MAB and Jacobs, working on ESIA of total 1,814 kilometer-long TAPI gas pipeline project. “The environmental assessment study must focus on protection of sugarcane crops and mango orchards as pipeline

track passes through Muzaffargarh, Multan and Khanewal districts in Punjab’s territory,” said Director General of Punjab Environmental Protection Agency (EPA) Asif Iqbal while speaking at the working as its chief guest.Speaking on the occasion, provincial EPA DG assured full assistance on behalf of Punjab government in construction of the portion of TAPI gas pipeline, which would pass through several districts of Punjab to connect the project with the Indian border.While the gas pipeline project at the same time should fully take care of the vital agricultural farms of the province that would come across proposed route of the project.The provincial EPA chief also urged the environmental organisations conducting environmental assessment study on the gas pipeline project to discuss various points with the EPA to implement the project without any hindrance and to ensure transparency in the project.Saquib Ejaz Hussain, project manager of ESIA study from EMC Pakistan, said the route of the TAPI project would be finalised once the ESIA study report was duly submitted to the governments of Afghanistan and Pakistan later this year.

He said that an 820-km long pipeline would pass through Pakistan out of the total of 1,814-km long TAPI project. It starts at Afghanistan-Pakistan border near Chaman traverses through Qila Abdullah, Pishin, Ziarat, Loralai and Musakhel districts in Balochistan and Dera Ghazi Khan, Muzaffargarh, Multan, Khanewal, Vehari, Pakpattan and Okara districts in Punjab. It will transport natural gas from the Galkynysh gas fields in Turkmenistan through Afghanistan into Pakistan and then to India.He said that the project envisaged laying of a 56-inch diameter pipeline one-meter below into the ground from Turkmenistan to Fazilka near Pakistan-India border. As compared to Balochistan, he said, Punjab will witness major activity due to scattered nature of the population of the province.He said, therefore, they were undertaking all institutional and legal aspects, besides taking all stakeholders on board to address their concerns in order to remove all hurdles before laying of the pipeline, which will commence in 2020. The pipeline will become operational in 2024.Asif Shuja Khan, former DG of Pakistan Environmental Protection Agency and serving chief operating officer of EMC Pakistan, said that ESIA study would conduct air quality and noise surveys; physical environment survey will be undertaken; archaeological and cultural sites would be protected; ecological survey will be conducted to protect flora and fauna; socio-economic survey as well as resettlement surveys will be conducted. In addition to the workshops at the national, provincial and district levels, the focus group discussions will also be held for resettlement and compensation mechanism. “Our aim is to minimise the displacement of population,” he added.Syed Nadeem Arif, managing director of EMC Pakistan, said the ESIA of the project would comply with the local and international environmental standards, including the regulations set by leading global financial institutions, to assess the environmental, socio-economic, and community health components of major developmental projects.This, among other regulations, will also include performance standards of International Finance Corporation. Besides, NAFTEC/MAB team leader Khaled Nassar, former Punjab EPA Secretary Raees Abbas Zaidi and others also spoke on the occasion.Source: Pak Observer

TAPI project should fully conserve agro-economy of Punjab

Pakistan has signed two financing agreements worth $400 million with the World Bank including Punjab Cities Programme ($200 million) and Punjab Green Development Programme ($200 million).Economic Affairs Division Secretary Syed Ghazanfar Abbas Jilani signed the financing agreements on behalf of the Government of Pakistan while representatives of Government of Punjab signed their respective Programme/Operation Agreements. Patchamuthu Illangovan, Country Director signed the Financing and Programme/Operation Agreements on behalf of the World Bank.The World Bank last week has committed $728 million through four projects to put Pakistan on the path of climate resilient development which would benefit millions of its citizens. The projects included Punjab Cities Programme and Punjab Green Development Programme, which were signed Tuesday.

Oil & Gas DevelopmentCompany Limited (OGDCL) and Kuwait Foreign Petroleum Exploration Company (KUFPEC), Monday, announced a strategic cooperation initiative for evaluating future potential business opportunities in international upstream exploration and production.

The MOU for strategic cooperation was signed between Nawwaf S. Alsalem, South Asia Regional Manager for KUFPEC and Zahid Mir, Managing Director of OGDCL.The strategic cooperation between the two oil exploration companies envisages exploring opportunities jointly in Pakistan, the Middle East and other overseas blocks. Pursuant to the MOU, KUFPEC may offer OGDCL joint venture opportunities in its international assets and blocks. OGDCL has also agreed for a reciprocal arrangement in Pakistan with KUFPEC. Both OGDCL

and KUFPEC will cooperate and collaborate in upcoming domestic and international opportunities.OGDCL is the largest oil exploration company of Pakistan and KUFPEC is an international upstream company, engaged in exploration, development and production of crude oil active in 14 countries spanning over five continents, i.e. Australia, Asia, Africa, North America and Europe.The two oil exploration and production companies with a robust financial background have desired through this MOU to exchange technical knowledge and industry experiences, allowing further discussion of potential international upstream growth synergies and possible partnerships.Source: Pakobserver

These projects will protect the environment and improve the quality of life in cities while being engines of growth and promoting sustainable water management through efficient irrigation, robust weather forecasting and improved disaster preparedness. The $200 million Punjab Cities Programme will benefit 4.1 million people in 16 urban areas by strengthening local govts’ ability to deliver basic and green infrastructure.The programme will also build systems to improve transparency, accountability, and responsiveness of municipal committees and other structures. Punjab Cities Programme aims to strengthen the performance of participating urban local governments in urban management and service delivery.The programme will Support the Operation Implementing Entity’s implementation of its Performance Based Grants (PBG) programme to selected 16 MCs for strengthening their institutional

PAKISTAN, WB SIGN TWO FINANCING PACTS OF $400M

OGDCL, KUFPEC SIGN MOU ON STRATEGIC COOPERATION

performance and the carrying out eligible infrastructure investments.The $200 million Punjab Green Development Programme will strengthen the province’s environmental management through empowering its departments to provide better environmental services to citizens and the private sector, with a focus on strengthening the capacity of the Environment Protection Department. It will help modernize laws and regulations and promote investments in cleaner technologies to reduce air and water pollution.The objectives of the Punjab Green Development Programme are to strengthen environmental governance and promote green investments in Punjab Province.Activities under the first results area will aim to restructure the Environment Protection Department (EPD), reform the environmental regulatory regime, and build the EPD’s capacity to deliver transparent and efficient environmental management services to the private sector and to the public.Activities under the second results area aim to promote selected green investments in both the public and private sectors and develop green financing schemes to finance such investments beyond the implementation period of this programme. The Economic Affairs Division secretary thanked the World Bank for extending its continuous support to the Government of Pakistan in its efforts to achieve sustainable development in the country.Source: The Nation

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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.Russia has nominated Public Joint Stock Company Gazprom for implementation of the project. Pakistan’s cabinet has also permitted the company to conduct the feasibility study at its own cost and risk.One-week deadline: Sindh warns cutting off gas supply to countryInter State Gas Systems (ISGS) – a state-owned company of Pakistan established to handle gas import projects and is already working on gas pipeline schemes like Tapi, has been nominated by Pakistan to execute the offshore pipeline project along with Gazprom.

ISGS is also working on the $10-billion Turkmenistan, Afghanistan, Pakistan and India (Tapi) gas pipeline to connect South and Central Asia and construction work on the scheme in Pakistan will start in March next year.These projects are called a game changer for Pakistan as they will not only lead to regional connectivity, but will also meet growing energy needs of the country.Amid a long-running tussle with Europe and the United States over the annexation of Ukrainian region of Crimea, Russia is looking for alternative markets and wants to capitalise on the growing energy demand in South Asia.Russia, which controls and manages huge gas reserves in energy-rich Iran, plans to export gas by laying an offshore pipeline through Gwadar Port to Pakistan and India, which are seen as alternative markets because Moscow fears it may lose energy consumers in Europe over the Crimea stand-off.Russia has been a big gas exporter to European Union (EU) countries and Turkey since long and despite US anger the European bloc has continued to make imports to meet its energy needs.Moscow receives gas from Turkmenistan and then exports it to EU states. Later, it has got gas deposits in Iran as well and is

looking to gain a foothold in markets of Pakistan and India.Pakistan has been experiencing gas shortages, particularly in winter, for the past many years as domestic production has stood static with new additions being offset by depleting old deposits.In a bid to tackle the crisis, the previous government of Pakistan Muslim League-Nawaz (PML-N) kicked off liquefied natural gas (LNG) imports from Qatar under a 15-year agreement two and a half years ago and is bringing supplies through other sources as well.According to a government official, after signing the MoU for the offshore pipeline, work on the feasibility study will begin in an attempt to assess viability of the project. Russia is even ready to finance the study. Russian gas exports touched an all-time high in 2017. According to Gazprom, gas flows to Europe and Turkey, excluding ex-Soviet states, hit a new daily record at 621.8 million cubic metres.Annual exports touched 179.3 billion cubic metres (bcm) in 2016, a significant jump from the previous high of 161.5 bcm in 2013 and well above the 2015 total of 158.6 bcm.Source: Express Tribune

PAKISTAN, RUSSIA SET TO SIGN $10B OFFSHORE PIPELINE DEAL

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.Provisional capacity of the oil pipeline will be one million barrels per day that can be enhanced further at a later stage.

Furthermore, Pricewaterhouse Coopers audit and consulting services company has confirmed viability of the project for securing required funding of $10 billion.A proposal in this regard has been sent to Planning, Development and Reform, Defence and Finance Divisions for their views. The Law and Justice Division has already endorsed a summary. Approval was also solicited for signing the memorandum of agreement with the FWO.During the course of discussion in the cabinet meeting, it was pointed out that preamble to the memorandum of agreement had mentioned the Ministry of Energy (Petroleum Division).The cabinet considered the summary for signing the memorandum by the FWO and the Ministry of Energy (Petroleum

Division) and accorded its approval.The pipeline will run from Gwadar Port to western China and will allow Beijing to diversify and step up imports of crude oil. Former prime minister Nawaz Sharif had floated the idea of constructing the oil pipeline during a trip to China.Gwadar is quite close to the Persian Gulf from where nearly 40% of the world’s crude passes.According to officials, China meets 50% of its oil demand through imports from the Middle East. Oil supplies come via Dubai-Shanghai-Urumqi route by covering a distance of around 10,000 kilometres.Crude oil can be supplied through the shortest possible Dubai-Gwadar-Urumqi route – a distance of about 3,600 km. This can be achieved by laying an oil pipeline through the energy corridor up to western China via Karakoram Highway and Khunjerab Pass.

Hurdles in the way like high altitude, freezing temperatures and rough terrain can be overcome with the help of advance technology.Many countries have successfully completed similar pipeline projects under extreme conditions and at high altitudes such as the Atacama gas pipeline, trans-Alaska pipeline and trans-Asia gas pipeline.Source: The Express Tribune

5. FROM GWADAR-KASHGAR: CRUDE OIL PIPELINE REQUIRES $10 BILLION INVESTMENT

The Byco Petroleum has broken many of its own records in April 2018, setting new all-time high sales in motor gasoline, high speed diesel, liquid petroleum gas (LPG) and furnace oil.Additionally, Byco’s SPM handled more crude in April than ever before with 296,000 metric tons handled in one month. Byco’s refinery achieved a new milestone of processing nearly 290,000 metric tons, or almost 75,000 barrels per day, of crude oil in April. April also saw Byco’s liquid port set record for a single month by handling 295,988 tons of crude oil. April turned out to be Byco’s strongest month to date in terms of total sales from the refinery which climbed to 317,902 tons.

BYCO RECORDS HIGHEST SALES IN APRIL

Sales of LPG, motor spirit, high speed diesel and fuel furnace oil increased to 6,421 tons, 43,191 tons, 135,980 tons and 111,855 tons respectively in April.

April set a new record for total crude oil refined by Byco. The company processed 289,385 tons, or 74,743 barrels, per day of crude oil, more than ever before. The record-breaking operational performance for the month of April shows that Byco’s management remains committed to maintaining a relentless focus on improving the turnover and profitability of the company.Source: Daily Times

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China and Pakistan will hold a joint study and prepare ‘’Development Plan of Pakistan Oil and Gas Industry’’ in order to provide guidelines and technical support for the promotion of oil and gas projects’’ cooperation between China and Pakistan.Both sides agreed that the China Petroleum Planning and Engineering Institute (CPPEI), CNPC along with expert panel of Ministry of Energy (Petroleum Division) will complete the study by end of November 2018 under head of China-Pakistan Economic Corridor (CPEC).

Prime Minister Shahid Khaqan Abbasi Monday witnessed the signing ceremony of Deed of Assignment of 25% Participating Interest in Offshore Indus 6 (Block 2265-1).The Deed of Assignment was executed among the Directorate General Petroleum Concession, Ministry of Energy-Petroleum Division, GHPL, Eni Pakistan Ltd (8.34%),

OIL & GAS DEVELOPMENT: PAKISTAN, CHINA TO HOLD JOINT STUDY

In first sub-group of oil and gas meeting, both sides discussed plans for the China-Pakistan oil and gas expert group to promote cooperation framework and plan and work plan for expert group for the next 6 months. The first expert panel of sub-group meeting between National Energy Administration (NEA) of China and Ministry of Energy (Petroleum Division) of Pakistan was held in April in Islamabad.Pakistan expert group already briefed Chinese side about multiple avenues available in the oil and gas sector ie

onshore and offshore exploration and production, import infrastructure, deep conversion mega oil refineries (with or without petrochemical plant), oil and gas pipeline, storages and import of refined (POL products) under government to government (G2G) and BOOT, EPC+F, PPP modes (to be determined on case to case basis subsequently).In order to complete ‘’Development Plan of Pakistan Oil and Gas Industry’’ in time, the experts’’ panels of Pakistan shall provide necessary information and data as per timeline specified.Pakistan will provide the relevant materials to Chinese side by May 31, 2018 and both sides will maintain confidentiality and will not share data with any third party without mutual consent. Whereas, Chinese party will present the plan (draft version) and experts group of both sides will discuss and review by August 30, 2018.The group will be responsible for regular communications and to finalize the monthly communication mechanism to be set up between the experts from both sides and to arrange mutual visits of the experts whenever required.On July 4, 2017, Pakistan and China agreed to establish a gas sub-group aimed at facilitating the existing and future oil and gas sector projects. The agreement reached during a meeting of the Chinese delegation that headed by Administrator National Energy Administration (NEA) NurBekri called on then Minister for Petroleum and Natural Resources Shahid Khaqan AbbasiSource: Business Recorder

Exxon Mobil Exploration and Production Pakistan BV, OGDCL (8.33%) and PPL (8.33%) to effectuate the transfer of Participating Interest.The Offshore lndus G (Block 2265-1) is considered one of the most promising blocks in offshore Pakistan. An ultra-deep exploration well is planned to be spud in the

first quarter of 2019 in the Block for which preparations were underway. Exploration success in offshore Pakistan will change the energy landscape of the country.This assignment is of great significance as it is the continuation of an increased interest from Major Oil Companies in Pakistan Offshore Exploration with Eni, reconfirming its long lasting commitment to Pakistan and ExxonMobil returning to Pakistan after 33 years.The Joint Venture is led by Eni Pakistan Ltd (Operator), a subsidiary of Eni SpA, a leading energy company.The signing ceremony, held at Prime Minister’s Office, was also attended by Additional Secretary Petroleum Division, the Italian Ambassador, US Deputy Chief of Mission and senior executives of the companies. Source: Pak Observer

EXPLORATION SUCCESS IN OFFSHORE TO CHANGE ENERGY LANDSCAPE OF COUNTRY

On the request of defence authorities, the federal government has finally ordered immediate suspension of unauthorised operations at two key oil installations at Keamari in Karachi being carried out by private oil marketing companies (OMCs) without prior security clearance, it emerged on Sunday.The petroleum division of the ministry of energy asked the Oil and Gas Regulatory Authority (Ogra) to take action in the matter as the ministry of defence (MOD) had been showing “serious concern over the operations of the unauthorised terminals”.The MOD had written letters about the unauthorised activities by oil companies without security clearance in February last year and then followed up in June 2017.As the operations continued unabated, the defence secretary called a meeting of stakeholders on March 1 this year and told the officials concerned in clear words that this could not be allowed to go on.As a result, Ogra formally askedtwo OMCs — Al-Noor Terminal and Hascol Petroleum — “to immediately stop

TWO OIL FIRMS TOLD TO SUSPEND WORK ATKEAMARI TERMINAL

OGRA TO GRANT 33 LICENSES IN LPG SECTOR

any unauthorisedoperation/activity, if carried out, at the (Keamari) storage terminal failing which action will be taken” under the applicable laws.Ogra officials said the ministry of defence had complained that the storage terminals of the two firms at Keamari were being operated without getting NoC (no objection certificate) from the ministry of defence.The petroleum division said the defence authorities had been repeatedly raising the issue of unauthorised setting up and operations of oil terminals by Al-Noor Petroleum and ZY & Co that later transferred the facility to Hascol. Earlier, the defence ministry had “declared the terminals constructed by M/S Al Noor Terminal (Pvt) Ltd and M/S ZY & Co (Pvt) Limited (later leased out to M/S Hascol Petroleum Limited) as unauthorised, as they were constructed without obtaining mandatory NoC from the MOD”.Recently the defence authorities reported that the “two terminals were still operative

despite clear instructions to stop illegal/unauthorised activities there”. As a result, Ogra was asked again by the petroleum division to take necessary action.The government also asked the oil regulator to put in place a procedure that should be followed in case of any future storage construction to avoid annoyance of the defence authorities.“To avoid such cases in future, all existing and new OMCs may also be directed not to commence construction work for development of storage prior to NoC from the MOD,” the petroleum division said, adding that the “final permission to commence construction of any storage be issued after obtaining the NoC”.An official of one of the oil companies said the OMCs had been requesting the setting up of fresh storages on the desires and persuasions of the petroleum division and Ogra under requirements of their marketing licences ever since the country had faced crisis-like situation in January 2015 due to petrol shortage.In some cases, he said, the OMCs had the provisional approvals from the regulator for additional storage but in many cases the defence authorities were taking too long in processing the requests for NOCs.Officials in the OMCs said they had been asking the government to introduce in consultation with defence authorities ‘a time-bound’ mechanism under which the requests by OMCs and NOCs by the defence authorities are issued or denied instead of sitting on such cases indefinitely.He said the expansion of retail petroleum network was directly linked to storage capacity and OMCs were bound under the laws and rules to have storage for at least 30 days of average sales.Source: Business Recorder

The Oil and Gas Regulatory Authority (OGRA), in an annual development plan for the year 2018-19, has proposed to grant 33 licenses to promote the LPG sector and ensure smooth supply of the commodity in far-flung areas, especially during the peak winter season. “Among the proposal, 25 licences are for the operation and marketing of Liquefied Petroleum Gas (LPG) storages and filling,” informed official sources.

According to Ogra’s annual report for the year 2016-17, the authority had issued around 21 licences to different companies pertaining to the regulated gas sector since 2002, which were meant for the transmission and sale of gas in different parts of the country.The authority granted diverse licences to different companies, including Sui Northern Gas Pipelines Limited, Sui Southern Gas Company Limited, Pakistan Petroleum Limited and Oil and Gas Development Company Limited.Source: Express Tribune

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ProsperityThe PIBT

Way!

FocusCOMPANY IN

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Q Having developed Pakistan’s International Container terminal Ltd. in Karachi, what prompted you to steer from the original direction and set up Pakistan’s first and state-of-the-art coal handling terminal?

A Marine group has been in the cargo handling business since 1964 in Pakistan. With the advent of containerized cargo, the dynamics of sea cargo also changed globally. Since our group has a forward looking and pragmatic approach and a history of delivering results, PICT was setup as part of modernization of port infrastructure at KPT. The decision to build Pakistan’s first coal, clinker and cement terminal came almost naturally as such infrastructure development projects are central to the philosophy of our group and our singular aim is to play a leading role in modernizing Pakistan’s port infrastructure. Of course being the first at anything has its challenges and our first hurdle were several bureaucratic delays and also problems with the our first contractor. However, sheer determination being our only discourse, it eventually paid off and we were able to make history by once again partnering in a national and patriotic development.

Q Can you tell us a bit about the capacity and efficiency of operations at PIBT?

A Given its existing infrastructure, PIBT is designed to handle 12 million tons of coal and also 4 million tons of cement and clinker per annum. In order to be in a position to accommodate future expansion, we designed the project in such a way that it would a little more investment to increase our coal handling capacity to 20 million tons. In our first year of operation, we handled a little under 3 million tons of coal. With the Karachi Port now having altogether stopped handling coal, the future looks further favourable as we are expecting that the entire volumes will be handled by PIBT. Additionally, we are also confident of handling around 8 million tons of coal annually.

Q PIBT also built Silos to store cement at the facility. What was the rationale behind this decision?

A The rationale behind this decision is that we see the potential to export cement from Pakistan. In line with this, we build a capacity of handling 4 million tons per annum and eventually export loose cement and clinker in bulk form which is the raw material for cement. We have Silos at our premises that can store 50,000 tons of cement for export. We also have a dedicated export line conveyor belt and also a crane at the jetty. I am also proud to state that PIBT also handles clinker exports for Attock Cement who are also using our services for coal import. Although I do not see a lot of export of cement from Pakistan in the near future, it is very heartening that almost all cement manufacturers in the country have increased their production capacity by 50% .

Q Since any listed company is eventually linked to certain performance parameters and PIBT is still a relatively new terminal, how do you rate the value of your own share?

A Our goal is to create shareholder value by developing and operating a state-of-the-art coal, clinker and cement terminal on the best global standards. When we commenced operations last year, our goal was to make sure that the project stood on its feet and was able to handle the volume of cargo that was initially processed through it effectively. Having surpassed our expectations, we now look forward to handling a higher volume that has come our way by virtue of operations at the Karachi Port having been halted. Since we now have a full payload of cargo to work with, we are now renewing our pledge to hone efficiencies that will ultimately translate into an increased rate of return for our investors.

akistan International Bulk Terminal Limited (PIBT) is the country’s first terminal designed to handle coal, clinker and cement in an environmentally safe and professional manner. Built at the Port Qasim Authority (PQA) as a ‘Progress with Care” initiative, it was designed to be Pakistan’s answer to the serious hazards involved in the handling of dirty bulk cargo. The project handles and

delivers coal to power and cement plants by utilizing the rail, road and sea networks and bring efficiencies to the logistics supply chains across industries of Pakistan. Commissioned by the Marine Group of Companies (MG) on a 30-year BOT basis and having commenced commercial operations recently, PIBT is the only other port infrastructure company to be listen at the Pakistan Stock Exchange after PICT (also a group project which was the countries first state of the art containerized terminal built by the private sector.)In just a short span of time, PIBT has already become an integral part of the coal supply chain in the country. Other than alleviating environmental concerns that have long marred the possibilities of increasing Pakistan’s exports, PIBT plays a vital role in easing off port congestion at the KPT and PQA.The Energy Insight recently met up with Mr. Sharique Azim Siddiqui, the CEO of Pakistan International Bulk Terminal Ltd and spoke to him about the feat of Marine Group of Companies, the journey of PIBT and its future aspirations. Produced below are excerpts of the interaction:

Operational Since 2017Founded By Marine Group of CompaniesStorage yard Spread over 250,000 sq.mTruck Loading Station Dedicated mechanized truck loading station with a drop of 100 tons/min with two trucks

simultaneously loadingGate Operations 4 in lanes and 4 out lanes with 9 weigh bridgesTerminal Storage Facilities Coal: up to 1 million tons of Coal Storage at any given time.

Cement: 5 cement silos of 10,000 tons each. 50000 tons at any given timeClinker: up to 200,000 tons of Clinker storage capacity at any given time.

Cost and Sponsors Total Project development cost in the first phase is US$ 285 million.

P

Major Players in Pakistan 1 ENI Pakistan Foreign Compan2 Mari Petroleum Company Limited Local Company3 MOL Pakistan Foreign Company4 Ocean Pakistan Limited Foreign Company5 Oil & Gas Development Company Limited Local Company6 OMV Pakistan Foreign Company7 Pakistan Oilfields Limited Local Company8 Pakistan Petroleum Limited Local Company9 United Energy Pakistan Limited Foreign Company

The Bare EssentialsExploration and Production(E&P) Statistics in Pakistan

Overview of exploratory and development wells drilled in Pakistan – last two decades

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Source: Pakistan Energy book 2016 published in September 2017

Excerpts printed from ICAP’s special report on Exploration and Production (E&P) Industry in Pakistan prepared by M. Naeem Ghouri (FCA Head of Finance and Business Support, United Energy Pakistan Limited) reviewed by Fawad Aftab (FCA CFO & Company Secretary, Asia Petroleum Limited), Khalilullah Shaikh (FCA Head of Supply Chain, K-Electric), Samiullah Siddiqui (FCA Director Finance, Oxford University Press) authorize by Professional Accountants in Business (PAIB) Committee and carried by The Energy Insight with special arrangement.

Overview of gas production by E&P companies from 2010 to 2016

Indigenous production of oil and gas in Pakistan is much lower than the country’s requirement. For example, the requirement of oil in Pakistan during 2015-16 was around 500,000 barrels per day and indigenous production was 86,480 barrels per day, therefore, the balance quantities of oil (crude as well as refined products such as furnace oil, diesel, petrol, etc.) were imported by Pakistan. In addition, Pakistan imported about 450 million cubic feet per day of gas (LPG & LNG) in 2015-16 which is a big burden on the balance of payments of the country.

Overview of oil production by E&P companies from 2010 to 2016

Advertorial

About ICAPThe Institute of Chartered Accountants of Pakistan (ICAP), established under The CharteredAccountants Ordinance, 1961, is a self-regulatory body of professional accountants in Pakistan. It represents professional accountants engaged in practice as well as in industry, education and public sector.ICAP professionals are spread across the globe and are in high demand due to their professional competence, integrity and drive for professional excellence. Initially, on the Institute’s establishment there were a handful of professional accountants, however, today the number is around 7600, and out of these nearly 70 per cent are working in industry.

About Professional Accountants in Business (PAIB) CommitteeThe ICAP PAIB Committee, currently chaired by Mr. Khalilullah Shaikh, was formed in 2009 and has reached to great heights since then. The Committee, comprising of highly competent and dedicated members, strives to provide meaningful professional support and guidance to members of the Institute through thought leadership papers, enriching conferences/workshops and various other engaging platforms.Every year the Committee organizes CFO Conference which is a flagship event of the Institute. The conference attracts around 1500 business and finance leaders from over 400 organizations across the country and continues to be the most sought after platform for professionals to share expertise, build knowledge and network.Besides developing industry specific guidelines, another highly beneficial initiative is ICAP Mentorship Program, in which senior professionals with diversified experiences serve as mentors to provide guidance to protege. ICAP Members and Affiliates across the world are benefitting from this program.Moreover, the Committee has conducted research surveys on important topics like ‘Future of Finance Function - 2025’ and ‘Employer Expectations’. Stay tuned, the Committee is working on some exciting projects such as Ethics Dilemma App, Career Driver etc. which will be unveiled soon!

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ArticleOil Geo-Politics & China’s Economic CorridorAhson AftabThe center of gravity for Energy and Infrastructure projects has moved to the southwestern Asian region since the advent of the highly ambitious Belt and Road Initiative (BRI) launched by President Xi JinPing of China in early 2015. This much acclaimed endeavor seeks to integrate regional economies and uplift socio-economics of the region that has been marred with a myriad issues for long. Part of the national narrative, China now envisages to create history by resurrecting the lost Silk Roads that once spanned the region and brought connectivity and prosperity. Walking the walk, it has plans to reinvigorate the region by investing in energy projects, new ports dedicated to trade and the affiliated roads and high speed rail infrastructure. It also is an opportunity for the Chinese to invest a fraction of their 4+ trillion dollar surplus sovereign fund into a scheme which promises better returns other than the usual external investment options.With a number of Chinese construction and engineering SOE’s (State Owned Enterprises) contemplating a tapering off of local work in China, these BRI projects seek to engage the expertise of these engineering and construction companies’ surplus capacities and integrate them via state funds into these BRI projects. It helps the Chinese State keep hundreds of thousands employed and keeps these engineering and construction companies afloat, including a myriad of Chinese equipment suppliers, various specialist vendors, manufacturers and fabricators. China believes that by undertaking the Silk Road Projects it will recoup a better return on its investments when the regional countries are integrated into its trading system with the so called ‘win win’ formula.

Breakdown of Belt and Road Initiative/CPECChina envisages investing a sum of around US $67 billion in the China Pakistan Economic Corridor (CPEC). A shot in the arm for an energy and infrastructure deficient Pakistan, the energy component of CPEC consists of no fewer than twenty one Coal, Hydro-Electric power as well as Solar and Wind Power projects. Also included in the scope is the development of the affiliated open cut mine sites at Thar in the Sindh province to exploit Pakistan’s vast untapped coal reserves, which will provide the fuel for their eventual operation. Many of these Energy Projects also include the construction of new Power Grids and long distance Power Transmission lines. New Highways crisscrossing Pakistan and connecting Southwest China with Pakistan especially to its new deep water trading port of Gwadar in Balochistan also feature prominently as part of the CPEC project portfolio. These highways and road and rail projects of CPEC once again are not discussed in this article. It is worth a mention however that Gwadar port has significantly cut down the shipping times for Chinese goods heading for western markets from one month using the traditional sea routes via the Malacca Strait down to a mere week using the roadways network down the length of Pakistan to reach Gwadar,

eventually to be shipped on further to the markets in the middle east Europe and Africa. The bulk of the CPEC energy projects are scheduled to be completed by 2023 and a few have already been completed ahead of schedule and are in Commercial Operation as of today. Fifteen of the twenty one energy related projects are fully funded and have so far been initiated. Of the remaining six, four are being actively promoted, and might come on line as viable pending the completion of feasibility studies. The remaining two have been identified as potential projects and are currently under review for viability.

Continuing Regional Energy TrendsA clearer picture has begun to emerge on what the future holds for the regional countries in the greater South West Asian region. The Russian led NSTC (North South Trade Corridor)/ EAEU (Eurasian Economic Union) projects, envisage linking the bustling Indian markets with Russian as well as potential Eastern European markets via Iran’s Chahbahar Port. This entails a corridor from India’s Western Gujrat coast to the Port of Chahbahar, traversing the Caucasian countries and leading further north and west into northern Europe. This is President Putin’s initiative to supplement China’s BRI projects and essentially complement the regional connectivity whereby regional countries increasingly trade in their own currencies, gold and barter arrangements. China has quietly courted Iran as a principal hub for its Silk Road activities and as the Western countries leave Iran under US sanctions, Chinese and Russian companies have been more than eager to pick up the unfulfilled energy and infrastructure contracts due to the rescinding of the Iran Nuclear Deal by the U.S. Russia has started to invest about $50 billion of the proposed $200 billion into Iran’s huge oil and gas infrastructure via its oil and gas giants such as Gazprom, Rosneft and Lukoil, and China with its Sinopec and CNPC corporations have agreed to pick up the lucrative South Pars, Yadavaran and Azedegan oilfield development contracts. As Total of France prepares its departure from Iran, due to the threat of unilateral U.S. sanctions, there are reports of China moving in aggressively to pick up the deals.In addition to this, Russian and Chinese Oil & Gas companies have long been active throughout neighboring Iraq, in all the super giant Iraqi oilfields such as Rumeila, Qurna, Al-Faw and Kirkuk since 2010 and continue their oilfield developments and operations in that country. In Pakistan too there is considerable momentum now with a new government in Islamabad, on restarting the long stalled Iran-Pakistan Gas pipeline project with prospects of it being extended to both India and China in the future.This alone can solve all of Pakistan’s energy woes. While the Iran Pakistan project still in stalemate that was due to be commissioned by mid 2017, Russia now seems to be mulling the Iran Pakistan pipeline project as a way to break the long US sanctions impasse in the region. Also as an alternative to the IP pipeline, India is mulling

the SAGE undersea pipeline from Iran’s gas hub of Asaluyeh, with a takeoff to Oman near the Hormuz all the way to the Indian Gujarat as a way to bypass the geo-political issues in the region. Qatar has shown interest in injecting its own gas into this undersea pipeline as it shares the world’s largest South Pars gas field with Iran in the Persian Gulf. There is also the possibility of Turkmenistan gas being injected into the proposed SAGE pipeline, once again bypassing the regional geo-politics. Iran’s regional policies leave little to the imagination on its drive to expand its Oil & Gas pipeline networks and its regional trade links. Iran already is the principal regional trading partner of Iraq and supplies it with everything from nuts & bolts to steel, cement, autos, refined petrochemical products, food, diesel and gasoline and sells Iraq power via its electricity grid. Iran also in conjunction with China and Russia has pledged funds toward funding Syria’s imminent reconstruction as the civil war there gradually winds down. Iran eventually plans to export its own as well as Iraqi Oil and Gas to the EU via the Syrian corridor. Just as in Iraq, Iran has been well positioned on the ground to capture the bulk of the proposed Syrian reconstruction projects not to mention the existing Syrian markets for goods and services.On the broader economic front, there is talk of expanding the BRICS into a BRICS Plus thereby expanding the alliance by inviting the remaining relatively large economies into the organization. The SCO (Shanghai Cooperation Organization) a security based

alliance of the Ex-Soviet Central Asian States led by China and Russia is also steadily expanding with new member countries such as Afghanistan, with both Turkey and Iran poised to join in the near future. India and Pakistan are already member countries of the SCO. The SCO serves as a multi-dimensional platform for politically and economically uniting the member countries and developing consensus on a unified policy and direction for a diverse group of member countries. This is all leading to the vision envisaged by President’s Xi JinPing and Vladimir Putin of a contiguous multilateral trading ‘Eurasian’ landmass stretching from Vladivostok in the Russian Far east to Lisbon in the far West, effectively controlling and governing trade in a vast region, where more than 50% of humanity and 60% of the global GDP currently reside. There is definite potential for some exciting regional growth, connectivity with new economic and political realities.

About the Author:Ahson Aftab is a Chartered Professional Engineer of Pakistani decent. With a career spanning over 20 years in the Oil & Gas and Minerals and Metals industries, he has worked with various multinationals in the U.S. Armenia, Australia, India, Iraq and Pakistan.

S. No Project Name MW Estimated Cost (US$ M)

1 2×660MW Coal-fired Power Plants at Port Qasim Karachi 1320 1912.2

2 Suki Kinari Hydropower Station, Naran,Khyber Pukhtunkhwa 870 1956

3 Sahiwal 2x660MW Coal-fired Power Plant, Punjab 1320 1912.2

4 Engro Thar Block II 2×330MW Coal fired Power Plant TEL 1×330MW Mine Mouth Lignite Fired Power Project at Thar Block-II, Sindh, Pakistan ThalNova 1×330MW Mine Mouth Lignite Fired Power Project at Thar Block-II, Sindh, PakistanSurface mine in block II of Thar Coal field, 3.8 million tons/year

660 330

330

2,0001,470

5 Hydro China Dawood Wind Farm(Gharo, Thatta) 49.5 112.65

6 300MW Imported Coal Based Power Project at Gwadar, Pakistan 300 Yet to be determined

7 Quaid-e-Azam 1000MW Solar Park (Bahawalpur) Quaid-e-Azam 300 600 100

1,302

8 UEP Wind Farm (Jhimpir, Thatta) 99 250

9 Sachal Wind Farm (Jhimpir, Thatta) 49.5 134

10 SSRL Thar Coal Block-I 6.8 mtpa &SEC Mine Mouth Power Plant(2×660MW) 1320 2,000 + 1,300

11 Karot Hydropower Station 720 1698

12 Three Gorges Second Wind Power Project Three Gorges Third Wind Power Project

49.5 49.5

150

13 CPHGC 1,320MW Coal-fired Power Plant, Hub,Balochistan 1320 1912.2

14 Matiari to Lahore ±660kV HVDC Transmission Line ProjectMatiari (Port Qasim) —Faisalabad Transmission Line Project

1658.341,500

15 Thar Mine Mouth Oracle Power Plant ( 1320MW) & surface mine 1320 Yet to be determined

20 Phandar Hydropower Station 80

21 Gilgit KIU Hydropower 100

CPEC-Energy Priority Projects

16 Kohala Hydel Project, AJK 1100 2355

17 Rahimyar khan imported fuel Power Plant 1320 MW 1320 1,600

18 Cacho 50MW Wind Power Project 50

19 Western Energy (Pvt.) Ltd. 50MW Wind Power Project 50

CPEC-Energy Actively Promoted Projects

CPEC-Energy Actively Promoted Projects

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NewsINTERNATIONAL

Wärtsilä Looks to Storage for Its 100% Renewable Energy AmbitionsEnergy storage to play a major part in the company’s transformation

Wärtsilä, the Finnish power plant and marine equipment giant, is shifting away from its fossil-fuel heritage and toward a future that is 100 percent dominated by renewables.Wärtsilä will be “leading the way to the power industry’s transformation toward a future that utilizes 100 percent renewable energy,” according to the company.Under the strategy, Wärtsilä will adapt its thermal plants to run on synthetic biofuels and increase its focus on other renewable energies. The plan builds on Wärtsilä’s growing profile in the power generation business. The company’s energy-sector market share has jumped from 8 percent to 21 percent in the last three years, fighting off competition from the likes of GE and Siemens. Wärtsilä’s Energy Solutions sales have increased by close to 80 percent, said Javier Cavada Camino, the outgoing president of the division and executive vice president of Wärtsilä Corporation. Choosing to abandon the fossil-fuel business was not easy, he conceded. In the run-up to the change, “we were going through the denial phase,” he said. “It was a big ‘Are you crazy, man?’ process. Now we understand our role.”One challenge: The company still has a relatively low profile in the renewables sector. However, it sees energy storage as a big part of its push for dominance in the industry.Last year Wärtsilä bought Greensmith, the battery optimization and integration software developer, and the company is continuing to support the development of storage technologies.Cavada claimed Wärtsilä has installed 20 times more storage than Tesla, a figure that presumably includes the 180 megawatts of energy storage being managed by Greensmith at the time of its purchase in May 2017.

And this month, Wärtsilä announced a partnership between Greensmith and Hyundai, the South Korean auto manufacturer.As reported by GTM, the partnership aims to help Hyundai develop second-life battery products and build a continuous, global supply chain spanning battery manufacturing, electric-vehicle sales, stationary storage deployment and end-of-life recycling.Cavada himself will be looking to strengthen his ties with the energy storage sector, but not within Wärtsilä. Instead, in September, and after 17 years at Wärtsilä, Cavada will be taking the helm at Highview Power, a company commercializing a long-duration bulk liquid air energy storage (LAES) concept intended to have capacities in the hundreds of megawatt-hours per plant. While most energy storage efforts today are focused on lithium-ion batteries, which can only serve relatively low-capacity, short-duration applications, “Highview is sitting on the missing piece of technology to make the grid run toward 100 percent renewables,” Cavada said.Highview Power’s technology is attractive because it is not dependent on exotic minerals or complex mechanics, Cavada noted. LAES employs components that are already in use across a range of industrial processes.At the same time, LAES does not require large civil engineering efforts like those needed for pumped hydro or compressed air energy storage plants, said Highview’s current CEO Gareth Brett, who will become vice chairman in September.As CEO and president, Cavada will be tasked with taking Highview, which has been working on LAES for the last 10 years, from a precommercial concept developer to a mainstream technology provider, Brett said. Highview officially opened its first grid-scale demonstration plant, with a capacity of 5 megawatts and 15 megawatt-hours, in Pilsworth, near Manchester in the U.K., at the beginning of this month.Speaking at this month’s Electrify Europe conference in Vienna, Highview’s director of operations, Emma Gibson, claimed the LAES plant had a round-trip efficiency of up to 70 percent and a response time of less than 8 minutes.With planned improvements to the technology, the response time could drop to 30 seconds, she said. Highview is now seeking opportunities in the U.S. and has a global licensing agreement in place with Baker Hughes, the former GE oil and gas division.Cavada said he saw the move as the opportunity of a lifetime. “I hunger for challenges, and I know that this is a no-brainer,” he said. “This is what the market needs.”Wärtsilä could end up being a commercial partner for Highview Power, he said.Source: Green tech media

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EPA Proposes New Renewable Fuel and Biomass-Based Diesel Volume Standards

On June 26, the Environmental Protection Agency released its proposed volume standards for total renewable fuel, total advanced biofuel and cellulosic biofuel for 2019, as well as the proposed biomass-based diesel volume for 2020. The proposed rule would increase volumes in all four categories.Background:The Renewable Fuel Standard program is a national policy that requires a certain volume of renewable fuel to replace conventional petroleum-based fuel. The RFS contains four renewable fuel categories: total renewable fuel, advanced biofuel, cellulosic biofuel and biomass-based diesel. Under section 211 of the Clean Air Act, EPA is required to set renewable fuel percentage standards every year. EPA has historically released its proposed volume requirements for each of the categories in June or July. This proposed rule is subject to public comments and, potentially, revision based on those comments. EPA is required to release its final version of the rule by November 30.What is in the Proposed Rule?The proposed rule would increase total renewable fuel volumes to 19.88 billion gallons, an increase of 590 million gallons from the 2018 final volumes of 19.29 billion gallons. This is somewhat of a contrast from the 2018 increase of 100 million gallons over 2017 volumes. The total advanced biofuel volume would be increased by the same amount, from 4.29 billion gallons in 2018 to 4.88 billion gallons in the proposed rule.Corn-based ethanol is considered a conventional biofuel, and is counted toward the total renewable fuel category volumes. Due to the way different biofuel categories are nested under each other, total conventional biofuel volumes, i.e. corn-based ethanol, is the difference between total renewable fuels and total advanced biofuels. This proposed rule would set conventional biofuels at 15 billion gallons for the third year in a row.Biomass-based diesel is getting a substantial increase of 330 million gallons, up to 2.43 billion gallons from 2.1 billion gallons in 2019. Biomass-based diesel volumes must be finalized a year before the other biofuel categories, meaning this proposed rule is setting volumes for 2020. This is the second-largest increase for biomass-based diesel ever and the largest increase since 2014.

Another significant development is within the cellulosic biofuel sector; the new proposed cellulosic volumes represent an increase of 93 million gallons, increasing to 381 million gallons from 288 million gallons in 2018. This is a change of direction from last year, when EPA lowered the 2018 volume to 288 million gallons from 311 million gallons in 2017. This proposed increase could indicate that EPA believes the capacity for producing cellulosic biofuels is expanding at a greater pace than it believed last year.

What Are the Key Takeaways?Renewable fuels provide a significant and steady market for American growers. In the 2016/17 marketing year, 5.4 billion bushels of corn, or 37 percent of total consumption, were used by ethanol producers. In the 2016/17 marketing year, 6.2 billion pounds of soybean oil, the oil from nearly 550 million bushels of soybeans, were used in biodiesel production (Figure 2).

While increases in the proposed volumes are certainly a step in the right direction, reaction is still somewhat mixed among stakeholders. Some stakeholders and producers indicated that these increases do not amount to much if issues such as the overuse of small refining waivers essentially limit the amount of renewable fuel blending required.It is critical to American agriculture that a robust RFS remains in place and continues to serve as an important market for farmers.

S I N G A P O R E (Reuters) - Asian liquefied natural gas (LNG) prices have risen to their highest since 2014 for this time of

the year as demand from China, India and South Korea has surged at the same time several production issues are curbing spot supply. LNG prices typically peak during the Northern Hemisphere winter amid heating demand and during the summer to fuel power generation, but this year prices have climbed 32 percent since mid-April to $9.60 per million British thermal units (Btu) last week and are trading near $10 per million Btu this week.Asian demand has strengthened this year led by stricter environmental standards, rising economic growth and a colder-than-usual winter. The higher prices could reduce LNG demand as industrial customers may consider alternative fuel sources.Higher oil prices and China’s continued buying of spot cargoes this year is also supportive, said Kittithat Promthaveepong, a senior analyst at consultancy FGE.“This is driven mainly by three factors: lower domestic gas production due to maintenance at gas fields, industrial demand due to fuel switching away from oil, and early stock building to prepare for the coming winter,” he added.Beijing has switched some of its residential heating demand to natural gas from coal to reduce notorious air pollution in the country’s north though this has created conflicts with industrial users who face curtailments when supply tightens.Higher-than-normal temperatures across Asia are also expected to boost LNG prices, data on Thomson Reuters Eikon shows.

WHERE IS DEMAND FROMTrade flow data in Thomson Reuters Eikon show Asian LNG imports in January to May this year are nearly 40 percent higher than at the same time in 2013, when Reuters started tracking the data, and up by 14 percent from last year.Imports to China and Pakistan during the first five months of 2018 increased over 50 percent from last year, while shipments to India, South Korea, Taiwan and Singapore jumped by about 15 percent to 30 percent.“Given the strength of Chinese demand last winter, Japanese and Korean ... utilities want to ensure that storage is full before the winter of 2018/2019 to avoid being caught out,” said Nicholas Browne, senior gas analyst at energy consultancy Wood Mackenzie in Singapore.Japanese and South Korean storage ended the winter at the lowest levels in at least five years, he said. Indian imports have risen due to outages at some coal power plants and low reservoir levels reducing hydro-power generation.

FURTHER UPSIDEAsian LNG prices could end the year at nearly $12 per million Btu, though higher spot prices could discourage industrial coal to gas switching, said Woodmac’s Browne.Recent supply issues at LNG export terminals have also driven the price gains.In Australia, Chevron idled the Train 2 at its Gorgon project for 30 days in May to carry out performance improvements.Meanwhile in the United States, gas supply into Cheniere Energy’s Sabine Pass liquefaction terminal dropped by one-third to 2 billion cubic feet per day on May 15 and have remained there, according to flow data, indicating maintenance at the plant.Supply later this year will tighten as Angola LNG is planning maintenance for July at its plant that can export 5.2 million tonnes per year of the fuel. Still, new supply from Australia and the United States could weigh on spot prices in the second half of the year, said FGE’s Promthaveepong

Source: REUTERS

POGEELahore Expo Centre, Pakistan10-12 May, 2018

Global Petroleum ShowStampede Park, Calgary, Canada12 - 14 Jun, 2018

IEEEP FAIRKarachi Expo Centre, Pakistan31 July - 02 Aug, 2018

GASTECH EXHIBITION & CONFERENCE Barcelona, Spain 17-20 Sep, 2018

POWER NIGERIALandmark Center, Logos25 -27 September, 2018

SOLAR TECEgypt International Exhibition Centre, Cairo, Egypt17-19 November, 2018

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THE 10TH CHINESE RENEWABLE ENERGY CONFERENCE & EXHIBITIONDubai, UAE01-03 November, 2018

THE ABU DHABI INTERNATIONAL PETROLEUM EXHIBITION & CONFERENCE (ADIPEC)Abu Dhabi, UAE12-15 NOVEMBER 2018

ELECTRICXEgypt International Exhibition Center, Cairo, Egypt 17-19 November 2018

OSEAMarina Bay Sands, Singapore27-29 Nov, 2018

GREEN BUILD, INT’L CONFERENCE AND EXPOMcCormick Place, Chicago, USA14-16 November, 2018

CalanderEVENT

COUNTRIES PARTICIPATION:AustraliaAustriaBahrainBelgiumCanada

ChinaCzech RepublicFranceGermanyIndia

ItalyJapanJordanKoreaLebanon

MalaysiaNetherlandsPakistanPortugalSaudi Arabia

SlovakiaSouth KoreaSpainSwedenSwitzerland

TaiwanThailandTurkeyUAEUK

USA

LOCAL:KarachiLahoreIslamabad

HyderabadRawalpindiFaisalabadSheikhupura

NarowalPeshawarJhangMultan

HaripurGhotkiGujranwalaOkara

KhairpurGujratSialkotMuzaffargarh

BahawalpurKasurRahim Yar KhanD.G. Khan

• 14th International Conference for Oil, Gas & EnergyIndustry was held on 12th May 2018 at the Expo Centre - Lahore and was based on the theme “Transforming Energy into Sustainable Growth”

• Conferencefeaturedtwoexclusivesessionsonthethemes“Energy Transition: Powering the Future” and “Coal & Renewable Energy for Sustainable Development”

• Ms.UzmaAdilKhan,ChairpersonforOil&GasRegulatoryAuthority (OGRA) graced the occasion as the Chief Guest.

• The sessions were chaired by Mr. Shah Jahan Mirza,Managing Director, Private Power and Infrastructure Board (PPIB) and Dr. Baqer Raza, Director General, Pakistan Council of Renewable Energy Technologies (PCRET) respectively

• EminentspeakersparticipatedattheconferencewerefromSchneider Electric - UAE, Oil and Gas Regulatory Authority (OGRA), Punjab Energy Efficiency and Conservation Agency, (PEECA), Ergil Group International - Turkey, 3M Arabia L.L.C - KSA, Haider Mota & Co, Alternative Energy Development Board, Sindh Lakhra Coal Mining Company (Pvt.) Ltd., Punjab Power Management Unit (PPMU) and FFC Energy Limited.

• Over 150 participants attended the conference whichincludes academia, policy makers, government officials and private sector

• The conference also received international participationfrom China, Turkey, USA and UAE

FOREIGN:UAE,

China,USA

Saudi ArabiaTurkey,

SpainNetherlands

Bangladesh

OVER 335 EXHIBITORS

OVER 9000 VISITORS

CONFERENCE HIGHLIGHTS

OPENING CEREMONYOpening ceremony was graced by Mr. Sheikh Alauddin - Federal Minister Commerce & Investment and also joined by Prof. Dr. Fazal Ahmed Khalid – Vice Chancellor, University of Engineering & Technology Lahore and delegation from China Chamber of Commerce for Import & Export along with other foreign dignitaries.

POST SHOW REPORT 2018

29

NewsEVENT

Once again, HIMOINSA is attending the Africa Energy Forum (AEF), which this year celebrates its twentieth edition in Mauritius, where the main stakeholders in the African energy sector have gathered, including engineering companies, developers, as well as products and equipment suppliers and ministerial representatives from African countries.In terms of active participation, HIMOINSA took part in several Panel Discussions, contributing its expertise as a global manufacturer of generator sets. Matthew Bell, Director - Business Development at HIMOINSA Southern Africa, stressed the importance of contributing to sustainable growth in Africa, by promoting hybrid power generation systems.“HIMOINSA has invested in R&D, working with partners specialising in solar energy and batteries to guarantee solutions that can be integrated effectively with renewable energy and to offer hybrid solutions both for ‘off-grid applications’ and in ‘multi-megawatt’ power plants integrated into new smart network models”.Morocco, South Africa, Egypt, Ethiopia and Kenya are some of the African countries that have shown great interest in developing major projects and constructing new energy infrastructures. Of those countries, Morocco has a goal of developing up to 1.5GW of solar and wind power so that clean energy accounts for 42% of the Energy Mix by 2020. Against this backdrop, HIMOINSA offers generator sets designed for hybrid applications of this kind, which guarantee a reliable supply and make it possible to combine the functionality of a diesel or gas-powered generator with renewable systems, reducing fuel consumption as well as operation and maintenance costs.Source: HIMOINSA

HIMOINSA AT THE AFRICA ENERGY FORUM

31