Global Scene

Abu Dhabi to build $ 5b refinery in Pakistan

Abu Dhabi signed an implementation agreement on Tuesday to build a $5 billion refinery that will double Pakistan's refining capacity.

Under the deal between Abu Dhabi's International Petroleum Investment Company (IPIC) and Pak-Arab Refinery, the project will be built at Khalifa Point in the Hub district of Baluchistan province, about 15 km (9 miles) west of the port city of Karachi.

The Khalifa Coastal Refinery Project will have a refining capacity of between 200,000 to 300,000 barrels per day of middle distillate products.

"It will be a large refinery to meet domestic needs and cater to the export market," said Prime Minister Shaukat Aziz, who witnessed the agreement signing with United Arab Emirates' Energy Minister, Mohammed bin Dhaen al-Hamli in Islamabad.

Abu Dhabi, one of the seven members of the UAE, has a 40 percent stake in the Pak-Arab Refinery at Mehmood Kot in the central province of Punjab.

IPIC, possibly with other UAE government institutions or companies, will hold an initial 74 stake in the Khalifa project, with Pak-Arab Refinery holding the remaining 26 percent stake. Pakistan, almost totally dependent on oil imports, has an installed refining capacity of 12.82 million tonnes a year (just over 250,000 bpd) from its five refineries.

Pakistan consumes about 15 million tonnes of oil products annually.

Aziz said Pakistan's economy, which has been averaging 7 percent growth annually for the past four years, needed energy and fuel to sustain its growth momentum.

Pakistan's annual energy requirements are expected to surge to 177 million tonnes of oil equivalent by the year 2020 from current needs of about 58 million tonnes.

The Khalifa refinery is expected to be commissioned by December 2012. The Pakistan government has announced various concessions for the project that includes 20 years tax-free status and up to 1,000 acres free of cost land.

Reuters

Thai energy giant to invest billion dollars in Myanmar gas project

Thailand's lar- gest oil exploration firm, PTT Exploration and Production, said Tuesday it would invest at least one billion dollars over the next five years to develop its offshore gas project in Myanmar.

PTTEP this year began exploration of the M-9 block in the southwestern Gulf of Martaban by working with Myanmar's top state-run oil enterprise, Myanmar Oil and Gas Enterprise.

The company plans to drill a more exploration wells this year and start installing production equipment in 2008, said PTTEP spokesman Sitthichai Jayant.

"Our activities in the M-9 project so far have confirmed that the gas reserve of this block is promising," Sitthichai told AFP.

"PTTEP has already laid down a development plan for M-9 which calls for an investment of at least one billion dollars starting next year onward. It usually takes five years for developing a gas project until it starts production."

The M-9 project is not included in PTTEP's five-year investment plans for 2007-2011, which require 281 billion baht (8.3 billion dollars), Sitthichai said.

The block has been the focus of PTTEP's ongoing offshore gas projects in Myanmar's Martaban Gulf. Hungry for energy, Thailand imports about 20 percent of its gas from military-ruled Myanmar, which is under US and European sanctions, and is vying for a bigger share of its impoverished neighbour's vast natural resources.

State media in Myanmar previously estimated the M-9 block contained 8.0 trillion cubic feet of gas.

Sitthichai said the company aimed to start initial production by 2011 for both local use and export.

PTTEP wholly owns the M-9 block but Sitthichai said it was looking for potential investment partners.

"We have been in talks with a state-owned oil company from Oman which are interested to co-invest in the project. We are likely to give them a minority stake of less than 10 percent," Sitthichai said.

Myanmar, one of the world's poorest nations, is under a series of US and European economic sanctions imposed over the junta's human rights abuses and its recent crackdown on pro-democracy protests.

But the impact of the sanctions has been weakened as energy-hungry neighbours such as China, India and Thailand spend billions of dollars for a share of Myanmar's vast energy resources to solve power problems at home.

According to 2006 official figures, 13 foreign oil companies are working on 33 projects in Myanmar.

BANGKOK, Tuesday, AFP