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Russia eyes $ 600 million trade with Pakistan KARACHI
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STAFF REPORT
uSSIA plans to increase the volume of bilateral trade with Pakistan to the 2008 level of $ 600 million, Consul General of Russia Andrey V. Demidov has said. “Still we plan to reach the level of uS $ 600 million by the end of 2012,” Demidov told a gathering organized by the Asian union Forum (AuF) here. Present among others were Patronin-Chief Justice Said-uz-Zaman Siddiqui, Chairman Waseem Yasin, Secretary General Tariq Shadab and members of the AuF’s executive committee. “We were and are prepared to cooperate with Pakistan in different spheres and primarily in commerce and in economy,” he said. In the last two decades of the 20th century the cooperation between the two countries remained on a very low level, he recalled. “The bilateral trade volume in 1980 was uS $ 95 million only and in 1990 – 138 mln. These figures were negligible,” said the consul general. He said the record high volume of bilateral trade, about $ 600 million, was reached in 2008. “But later we experienced the effects of the World financial crises and the volume of trade dropped to the level of uS $ 300 mln in 2009,” he said. Demidov said he had already mentioned a very good example of mutually beneficial cooperation that was the Pakistani Steel Mills. The project was inaugurated more than 30 years ago. And it was still operational. The machinery built in the Soviet union, although old, was still working without any serious technical problem. Nevertheless, the Pakistani Steel Mills needed to be upgraded, he said. The new machinery was to be supplied
and fit in. The production level was to be brought up. “And we are prepared to come and to modernize the project. About four years ago we presented the management of the Steel Mills with a detailed plan of upgrading the production to the level of 3 million tons. This plan is still under consideration by our partners,” the consul general said. In this respect, Demidov stressed his conviction that the follow-up of bilateral cooperation around the Pakistani Steel Mills could move forward the whole complex of our bilateral ties. “We know that Pakistan is experiencing energy deficit. But Russia is the world’s biggest energy supplier. Our assistance in the field of energy can be rendered in the form of oil and gas supplies. Our experts assisted the Iranians in bringing the gas pipeline to the Iran-Pakistan border,” said the Russian consul general. It had been announced that Russia had a plan to allocate $ 500 million for the upgrading of the Pakistani Steel Mills, he said. Special agreements, he said, were underway on construction of a South
Asian Electricity Trade and Development Project CASA-1000 and gas pipeline TAPI. Demidov said good prospects for fruitful bilateral cooperation could be found in the fields of railroads and highway construction, energy, coal mining and others. A very important and a very fruitful sphere of bilateral cooperation was Russian possible participation in building irrigation projects in Pakistan. “Russia has a very serious experience of using modern machinery in this field. In the past we built a lot of irrigation systems in Central Asia,” said he. Both the parties can cooperate in the field of transport, building roads, railroads, bridges etc, including air transport. On May 5 this year, he recalled, a Russian-made passenger airplane of latest brand “Sukhoi Superjet” performed demonstration flights in the Jinnah International Airport, Karachi, in the presence of officials from the Civil Aviation Authority of Pakistan. “In our view the biggest prospects for the future development of mankind lie in outer space. Space is an inex-
PSM to iMPort iron ore froM iran ISLAMABAD: Chief executive officer of Pakistan Steel Mills is on a visit to Iran to discuss and secure supplies of iron ore from a less expensive and quick source of raw material to boost PS production. The spokesperson of the PS said that the main purpose of the visit is to explore possibilities of securing a continuous supply for the Steel Mills, IRNA News Agency Reported. The mill is experiencing difficulties in importing iron ore from Australia, Canada and Brazil as shipments take 50 to 60 days with a high freight compared to a 10-12-day cost-effective shipment from the neighbouring country. The spokesperson said the PS delegation would meet representatives of five Iranian companies and would also discuss possibility of barter trade, under which PS would supply metallurgical coke in exchange for Iranian ore. APP
haustible source of energy, raw materials. And of course it is an important source of human knowledge. Russia now is an undoubtedly world leader in space exploration, in manned spaceflights,” Demidov said. The two countries, he said, had already started cooperation in the space. In December 2001, a Russian missile launched into orbit a Pakistani satellite “BADAR-2”. In September 2012, the two sides witnessed the second session of Inter-ministerial Russian-Pakistani Commission on trade, economic, scientific and technical cooperation held in Islamabad. “We can cooperate in the field of education that is in training of Pakistani students in Russian universities,” he said. Also, according to Demidov, the two countries had an intense political dialogue including regular contacts at the sidelines of the Shanghai Cooperation Organization and the so called “Dushanbe Four”. “Both sides have regular consultations between foreign ministers,” he said. The consul general said Russia and Pakistan had close approaches to main international issues. “This cooperation should be continued,” he said. “Of course the moving forward closer with Russia is not and should not be the only option for Pakistan. We think that Pakistan should continue its long-time cooperation with the united States. And, undoubtedly we will only support Pakistan in its aspiration to maintain its time-tested all-weather friendship with China. What we want is to complement the existing cooperation with these nations. We wish to add what the listed nations could not and possibly do not want to give to Pakistan,” he said. Russian businesspeople, Demidov said, were listed among quite fortunate ones. “But they are to be encouraged to come and to invest in Pakistan. They are to be invited to invest in Pakistan. In what way invited? Invited to business and investment exhibitions and fairs. Invited to take part in business forums, in talks and negotiations on specific projects,” he said. He said his side was awaiting with keen interest the visit to Pakistan of Russian President Vladimir V. Putin. “I would like to stress that the visit was not cancelled, it was postponed.
Byco opens 25-metre deep oil terminal in Balochistan First oil tanker arrives at ‘Single Point Mooring’ g
KARACHI STAFF REPORT
Byco has achieved yet another historic milestone by bringing the first ever oil tanker to its newly-established deep sea Single Point Mooring (SPM) facility constructed by the Byco Terminal Pakistan Ltd, a Byco group company. Byco’s crude oil tanker, M.T ARIETIS, carrying 70,000 tons of upper zakum crude oil from Abu Dahbi was berthed at first ever SPM Tuesday. This marks the commissioning of 3rd port which will be used for import of crude oil and petroleum related products. With a clear draft of 25 meters this facility can accommodate larger size vessels carrying Crude/ Petroleum products in cargo sizes of over 100,000 tons. The full operation of SPM will cause to create adequate availability of other oil piers leading to reduced waiting time and consequential demurrage. In the initial stages, the SPM shall be used to import Crude Oil for Byco’s newly completed 120,000 bpd and the existing fully operative smaller refinery of 35,000 bpd. The SPM has been set up on the coast of Arabian Sea at a distance of approximately 14km from the Byco’s Mouza Kund Site and is approximately 10 kilometers from the sea shore at 25 meters depth. It is connected to the storage tanks through 28 inch diameter offshore and onshore pipeline. Speaking on the occasion, Imran Farookhi, CEO Byco Terminals Pakistan, the company that owns and operates the SPM, said that the arrival of M.T ARIETIS marked the end of one journey and the beginning of a new one. “With the blessings of the Almighty, we have conquered all obstacles and are ready to meet the needs of Pakistan’s growing oil needs,” he said. Presently the petroleum products are being imported through Karachi and Port Qasim and both these ports had a draft limitation and as such cannot accommodate larger ships. The SPM facility with a draft of 25 meters would allow mooring of the larger crude carriers, which would not only result into lower administrative cost but would also bring in substantial savings on account of difference in freight charges, thus giving SPM facility a strategic advantage. Byco Terminals Pakistan is an infrastructure company setup to facilitate the logistics of petroleum products, Byco Terminals Pakistan (formerly universal Terminal Limited) is a wholly owned subsidiary of Byco Petroleum Pakistan Limited (BPPL).
‘UREA MANUFACTURERS HAVE GIVEN FARMERS RS 365B BOOST’ KARACHI STAFF REPORT
The domestic urea manufacturing plants have provided a benefit of Rs 365 billion to the farmers over the last five years, said the Fertilizer Manufacturers Pakistan Advisory Council (FMPAC) Wednesday. The benefit, the council said, was in the face of keeping the local urea prices significantly below international levels. “That is a huge benefit to the agriculture industry and the economy,” said a FMPAC spokesman in a statement issued here. The spokesman said all the four SNGPL based fertilizer plants had incurred significant losses in the last 2 years due to non-supply of gas and further benefit to the agri-economy was being eroded. He added that there was a misconception that fertilizer manufacturers were enjoying raw material subsidy from the government in the form of reduced feed gas prices. This subsidy was not for the manufacturers, but was in fact passed on to the
farmers via reduced prices and this government policy had historically protected farmers and the agriculture economy from price fluctuations of international urea market, rupee depreciation and foreign exchange requirements. Based on current feed and fuel gas prices, gas subsidy per bag of urea works out to be Rs.228 per bag. In essence if Government subsidy on gas price was taken away, urea prices would only increase by Rs. 228 per bag. On the other hand difference between price of domestic and international urea throughout 2012 has been more than Rs. 1,000 per bag. Therefore, he said, that not only is the fertilizer industry passing on feed gas subsidy to the farmer, it is also passing on a much larger benefit of local urea production in addition to paying taxes to Government. The official further added that out of the total urea price increase since 2010, about 80% has resulted from imposition of GST on urea and CESS on gas, and general inflation while balance 20% is due to factors such as significant less production due to Gas curtailment and other costs which remain constant irrespective
of less production etc. Government did not honor its gas supply contracts with the fertilizer manufacturers despite the fact that industry has recently invested $2.3 billion in the country based on the government approved policy designed to encourage investment in the sector. Domestic urea plants in the country are now faced with a production loss of over 2.8 million tons in 2012 as they could only produce 4.1 million tons of urea against a total production capacity of over 6.9 million tons per annum which has increased foreign outflow instead of spending within the country. The government has also incurred significant losses by importing urea worth over $ 1 billion and providing subsidy of over Rs. 50 billion on imported urea in the last 2 years. urea is the most expensive form of energy that is imported costing around $23/MMBTu, whereas RFO and LNG would be 30-50% on average less expensive than urea on a MMBTu basis. The FMPAC official further clarified that domestically produced urea is always available around the length and breadth of Pakistan eliminating pocket shortages. Whereas imported urea is generally not
available at the right time needed for sowing of crops due to unavoidable delays in imports. He said that there are a host of other reasons including food autarky and food self-sufficiency which warrants sustained and regular production of domestically produced urea. He said that the entire crisis has primarily been due to non-ad-
herence of the Government approved priority for gas supply to the fertilizer industry who had sovereign contracts in place to receive gas unlike other sectors. The continued non supply of gas to the SNGPL plants is already creating financial turmoil for these manufacturers, as well as severely denting the agriculture economy.
Thursday, 27 December, 2012