Pakistan Agriculture News

KP, Russian group sign Rs35b deal to set up oil refinery

Imran blames Centre for delaying approval of power generation MoUs | Khattak says conducive environment attracting investors

Islamabad –  Khyber Pakhtunkhwa Oil and Gas Company Limited (KPOGCL) and a Russian consortium of investors Wednesday reached an agreement to establish an oil refinery having capacity to purify 200,000 barrels oil per day with an investment of Rs35 billion.

KPOGCL Chief Planning Officer (Energy and Power Department) Zainullah Shah and Yoroslav of Himmash signed the deal at KP House Islamabad.

Speaking on the occasion, Imran said that “During my election campaign I used to say that a time will come when foreigners’ trust on Pakistan will be restored. Today my dream of Naya KP comes true”. Investors are pouring their investment in KP just because of honest and sincere leader ship, he added.

He said around 78 megawatt hydropower electricity was readily available with the Khyber Pakhunkhwa, but the province was not getting required cooperation from the federal government.

The PTI chief said the province was awaiting approval of several Memorandums of Understandings with regard to power generation, which facing delay on part of the central government.

Imran alleged that expensive coal and LNG projects involving kickbacks are being facilitated by the federal government while hurdles are being created in the execution of 4,000MW hydropower generation of the KP government.

“The KP government has signed MoUs for 4,000MW hydropower generation while 74MWs hydropower are ready to be added to the national grid but the federal government is not taking it from us and depriving people of the benefits of cheap electricity,” the PTI chief said.

Imran said that hurdles are being created in the execution of KP’s hydle power while facilitating imported coal and LNG projects. “There is commission and corruption involve in the import of coal and LNG and that is why it is being promoted,” he alleged.

The PTI chief further said that when Pakistan economy grew in the past it was because of cheap electricity but now the imported fuel-based energy has devastated the economy, as the rate is very much high. Besides, billions of dollars are going out of the country and increasing trade deficit is a challenge to the country. The centre is delaying permission to KP Hydropower projects and making the country more indebted.

“The centre is not giving permissions to the KP government for cheap and clean energy while permission is granted to the Punjab government in days for the dirty fuel,” he added. Because of the coal plants, Punjab is facing the worst smog of its history, he claimed.

Imran said that our electricity is costly than Bangladesh and India not only because of high prices of oil and gas but due to heavy taxes. It affects our exports.

On this occasion, Chief Minister KP Pervaiz Khattak said that federal government withheld several of its projects’ approval in electricity and petroleum sectors and if the issue was not resolved it would give a bad signal to the international investors which will affect the country’s economy.

We have already signed establishment of oil refinery in Karak with a refining capacity of 40,000 barrels/day with Frontier Works Organisation (FWO). It means that we are in the process of establishment two refineries with combine capacity of 60,000 barrels/day. Currently, our crude oil production 54,000 barrels/day and in next seven months it will reach up to 70,000 barrels/day,” he said. Under these agreements of refineries, without any investment, the province will get 10 per cent share of their profits.

Khattak said: “We are working on 4,000MWs of projects. We have 74MWs of hydel power in hand which is ready to be added to the national grid but the centre is not buying it from the province.

He said that we have the capacity of the generating clean and run of the river and low price energy but the federal government is interested in imported fuel-based energy generation. “We will fight for it that is why the centre is not buying the low price energy,” he added.

There is another issue of the province that for the last thirty years our hydel-based electricity price was 30 paisas/unit, we then fight for its increase and able to get Rs1.10/unit. Now, after it, we have won another case that is settling of upcoming years’ net-hydel profit (NHP) to the province at Rs4.25/unit under AGN Kazi formula, which is a ‘legal document’ having the consent of the CCI and presidential ordinance has also been issued on it that the arrears should be paid to the province but the centre is dodging us and not taking it to the CCI again, he added.

The CM said that whether anybody can reject the CCI decision, nobody can. However, he said the centre is delaying it and if this delay was removed the province would annually get Rs70 billion extra NHP.

KP Energy Minister Atif Khan said that the federal government was taking the electricity from 18MWs Pehur Hydropower Project at Rs1.40/unit while we are asking for Rs4.5/unit. From the private investors, the federal government is purchasing electricity at Rs13/unit, he added. “We have Rs50 billion investments for 668MWs projects but the centre is not giving us tariff for it,” he said.