According to knowledgeable sources within the Ministry of Planning, Development, and Special Initiatives, Pakistan will extend an invitation to Chinese businesses to collaborate with Pakistani businesses in proposed Joint Ventures (JVs) for the construction and operation of Strategic Underground Gas Storages (SUGS).
This proposal will be included in the draught minutes of the upcoming, soon-to-be-held 11th Joint Cooperation Committee (JCC) meeting on the China-Pakistan Economic Corridor.
The SUGS project will be developed following Pakistan’s evolving energy needs, ongoing gas import initiatives, and technological and commercial factors.
To suggest prospective locations for the construction of the gas storage facilities, Asian Development Bank (ADB) authorized consultants are conducting a feasibility study. The Pakistani side suggested that Chinese businesses take part in joint ventures (JVs) for the development and operation of projects with Pakistani businesses.
According to the preliminary minutes, JCC observed that the energy cooperation projects under CPEC have been proceeding without any issues thanks to the combined efforts of both parties. Twelve projects with a combined installed capacity of 6,370 MW as well as a 4000-MW HVDC transmission line have so far been put into service (Matiari-Lahore Transmission Line).
The secure and steady functioning of the CPEC power plants, which provided one-third of Pakistan’s total power supply throughout the COVID-19 period, was made possible via the combined efforts of the two sides. This support was crucial at this time. Even during the COVID period, the ongoing energy cooperation initiatives kept making steady progress. The development of the CPEC energy cooperation projects met the satisfaction of both parties.
The Kohala and Azad Pattan projects’ withholding tax (WHT) issues have already been resolved, according to JCC, which will aid in the projects’ efficient completion. In a similar vein, the Pakistani government has also canceled the 17% sales tax on imported machinery and equipment for ongoing energy projects. The Pakistani side is dedicated to establishing a more uniform and helpful electricity market in Pakistan as well as maintaining stable tax and pricing rules. The Chinese side is eager to help the Pakistani side in pertinent areas and to share its development expertise.
JCC stated that the 700.7MW Azad Pattan HPP, 1124MW Kohala Hydel Project, and 1320MW Thar Block-1 Power Plant will considerably support Pakistan’s economic and social growth by optimizing the country’s energy mix. The remaining 600MW Zonergy Projects at Quaid-e-Azam Solar Park would be implemented following Pakistan’s generation strategy using methods that are agreeable to both parties, both parties emphasized.
Both parties agreed that it was necessary to reconsider the 300 MW Gwadar Power Plant in light of the rising global coal costs, which were leading to unusually high energy rates and liquidity concerns for the power industry. It was determined to weigh the pros and drawbacks of installing/designing it for local (Thar) coal, replacing the project with a renewable energy project.
According to JCC, both parties should improve their communication and cooperation in terms of energy planning, skill development, etc. after their extensive cooperation in CPEC energy projects to advance the optimization of the energy mix and advance the capacity building of Pakistan’s energy governance.
To fulfill Pakistan’s energy demands and to turn coal into other products for both internal and international markets, the two parties decided to conduct a collaborative study on the future development of the Thar coal blocks.
Regarding the development of industries and special economic zones, the Pakistani side noted that the projects for the provision of gas and electricity at the starting point of the following CPEC SEZs (Rashakai SEZ in Khyber Pakhtunkhwa, AIIC SEZ in Punjab, Dhabeji SEZ in Sindh, and Bostan SEZ in Balochistan) were on track and would be finished by the deadline.
Project for the South-North Gas Pipeline: The Pakistani side has looked through the Feasibility Study. The Chinese side acknowledged the program’s advancement and offered assistance in carrying out relevant tasks within the framework of Pakistan’s growth plan for the oil and gas industry.
Both parties explored using Chinese crews, equipment, and experience for the National Seismic Study of Sedimentary Area. National and international businesses will profit from having accurate subsurface information, especially in frontier areas, which may lead to investment in drilling wells. Seismic data will allow the delineation of subsurface structure, ensuring the establishment and confirm the subsurface understanding of geology and structure. The Chinese side was suggested to participate in this initiative by the Pakistani side.
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