Wednesday, 11 September 2013

Cement exports drop | SBP’s reserves fall to $4.8 billion | Tullow Oil winding up Pakistan operations | Plan prepared to import LNG

Cement exports drop slightly
Total year-on-year cement dispatches in August fell from 2.283 million tonnes to 2.251m tonnes, All Pakistan Cement Manufacturers Association said in  a  statement.  Exports  from  the  north  declined  from  0.512m  tonnes  to 0.438m  tonnes  during  the  month  compared  with  last  year.  However,  domestic cement market in the region registered a little increase, dispatching 1.312m  tonnes  against  1.287m  tonnes  during  the  same  month  last  year. Local  cement  dispatches  from  the  south  dropped  by  11.65  per  cent  while exports increased by 15.48 per cent. The exports from South in August last year were 0.188m tonnes that  increased to 0.239m tonnes this year. Local sales  declined  from  0.296m  tonnes  to  0.239m  tonnes.  The  statement  said the  manufacturers  came  under  pressure  because  of  recent  hike  in  power tariff  and  fuel  prices  which,  in  turn,  raised  the  input  and  transportation costs.

SBP’s reserves fall to five-year low at $4.8 billion
Foreign exchange reserves  of  the  State Bank of Pakistan  (SBP) went  below $5 billion – their lowest level in five years - for the week ended August 30, the  SBP’s  data said on  Thursday. Reserves held by  the State  Bank declined to $4.822 billion from $5.203 billion, while country’s total liquid foreign reserves fell to $9.998 billion from  $10.390 billion during the  previous week. Economists  said  the  major  reason  for  the  decline  is  the  country’s  need  to fulfill  its  external  debt  servicing  obligations.  Pakistan  paid  the  19th  installment  of  $393  million  to  the  International  Monetary  (IMF)  as  part  of  loan repayment on  August 26th. The  central  bank’s forex holdings are  now one of  the  lowest  since  2008.  This  was  the  year  (November,  2008)  when  Pakistan signed $7.6 billion worth of stand-by arrangement loan program agreement with the IMF to overcome its severe balance of payments difficulties. The Fund said at that time that the loan was given with a view to strengthen Pakistan’s sharply diminishing foreign exchange reserves.

Tullow Oil winding up Pakistan operations
Ireland based oil/gas Exploration and Production (E&P) company Tullow Oil Plc  is to wind up its Pakistan operations. In March 2012 the company took the  decision  to  commence  a  process  to  sell  its  Asian assets  to  focus  on  its core African and Atlantic margin strategy. British Petroleum (BP) and Malaysian-based firm Petronas have already wrapped up their operations in Pakistan.  Tullow  Oil  is  the  third  foreign  firm  seeking  to  liquidate  its  assets  and leave  the  country. Pakistan Petroleum  Limited (PPL) had  shown  interest  in acquiring the  assets of  Tullow in Pakistan  and  Bangladesh  but  later  it  gave up  on  its  plan  as  Tullow  sold  its  Bangladesh  assets  to  a  Singapore-based company,  Kris  Energy. A  PPL  official  said  the  state-owned  company  is  no more  interested  in  Tullow  Oil's  remaining  assets.  In  December  2012,  after receiving formal approval from the federal government, PPL appointed consultants to evaluate Tullow Oil's assets in Pakistan and Bangladesh to determine hydrocarbon potential and the possible advantage of each block. Tullow has been active in Pakistan since 1991 and has exploration, development and production interests across seven licenses  covering 13,171 sq kms. Early in 2010, Tullow successfully  completed  the Shekhan-1 exploration well encountering 45 meters of net gas pay.

Plan prepared to import LNG under $490 million projects

The government has prepared a plan to import LNG under $490 million short, medium and long-term projects. LNG import projects are expected to be implemented within the next two to three years with the objective of enabling the country to import 1.7mmcfd LNG to alleviate the gas crisis in the country. The government intends to import 200mmcfd gas through a fast track Engro terminal Project in the next six to eight months at a cost of $30 million to $40 million. The Engro Vopak Terminal Limited (EVTL) would provide the project cost. The project activities include retrofitting of existing Engro LPG terminal, provision of Floating Storage and Re-gasification Unit (FSRU), dredging and laying of 8 kilometres pipeline from terminal to SSGC receiving point. The EVTL will be the terminal operator under a tolling arrangement. A fixed per mmbtu tolling fee and annual  throughput  guarantee  will  be  negotiated.  The  timeline  for  completion  of  the  project  is  six  to  eight  months  from award of  contract. The supply will be  intermittent and twice  a  month for 5-6 days  each  of 200  mmcfd LNG each  day.  The ship movement and night navigation issues would be resolved with Port Qasim Authority. The plan also envisages import of 500mmcfd LNG through SSGC LPG Retrofit Project within the next 18 to 22 months. The financing cost of the project $175 million to $200 million would be provided by the successful bidder.

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