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October 10, 2020

Govt invites US to explore investment opportunities in energy sector

Business

October 10, 2020

ISLAMABAD: Pakistan on Friday invited the American companies to explore investment opportunities in the energy sector, particularly refining which is in need of overhaul with growing demand, terming the US as an important business partner.

Minister for Energy Omar Ayub Khan said there is a strong footprint of US companies in the energy sector in Pakistan and they are familiar with the market. He underscored the government policy initiatives of increasing the renewables share of energy in the total energy mix and invited investment in the sector.

“The government is going into a competitive market for power distribution and has developed an integrated generation capacity expansion plan to align the country’s demand and supply parameters and investment decisions accordingly,” Khan said, addressing a virtual event of the US-Pakistan Business Council.

The minister said the specific policy for small hydropower has been developed to ensure that benefits of renewable and cheap electricity are available to consumers.” While increasing the capacity to ensure sustainable supply of electricity, an effort to move towards cleaner fuel is being made.”

Special Assistant to the Prime Minister on Petroleum Nadeem Babar spoke on the business climate in Pakistan in the oil and gas sector and shared an overview of the pro-business policies being pursued by the government.

“Refining sector in Pakistan is in need of overhaul and with a large middle income population with growing energy needs,” said Babar. “The current capacity of refineries is extinct.” He gave an overview of the specific incentives provided by the government for brownfield and greenfield oil refinery investments.

The PM aide said Pakistan is equal to the challenge of globally exploring investment for its upstream sector and had last week advertised 10 blocks for grant of petroleum exploration rights (exploration licence). He invited US companies to bid for this.

“The petroleum division, ministry of energy will soon offer blocks for offshore exploration as well,” he said. “Physical works on a new trunk pipeline over 1,100 km capable of 1.6bcfd (billion cubic feet per day) transmission from the north to south of the country will begin in the 1Q of CY 2021. Underground gas storage facilities, onshore gas terminals are being actively pursued by all stakeholders and that US companies should seek these opportunities.”

Pakistan’s current local crude oil production is 90,000 barrels a day. Natural gas production is around 4 billion cubic feet/day and is estimated to reduce 2.2 bcfd and demand to rise to 8 bcfd by 2021.