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Pakistan's Blue Economy: Vast Offshore Resources in Exclusive Economic Zone

Pakistan has a 1,000 kilometers long coastline on the Arabian Sea with maritime sovereignty over 200 nautical miles deep Exclusive Economic Zone (EEZ) and 150 nautical miles of Continental Shelf. This adds 290,000 square kilometers of sea or about 36% of the country's land area open for tapping vast resources in it.

Pakistan's "Blue Economy" in this extended economic zone includes seafood and energy resources as well as international trade connectivity with the rest of the world. It offers opportunities for water sports, recreation and tourism in the coastal areas of Pakistan. One sign of the recognition of Pakistan's blue economy is the ongoing three-day International Maritime Conference organized on the theme of ‘Global Geopolitics in Transition: Rethinking Maritime Dynamics in the Indian Ocean Region’ under the auspices of National Institute of Maritime Affairs.

Offshore Energy Resources:

A Pakistan Basin Study conducted in 2009 found that the country has six onshore and two offshore basins; offshore basins being the Indus basin and the Makran basin in the Arabian Sea.

Top 3 Offshore Drilling Sites in Asia-Pacific. Source: Bloomberg

The Indus offshore basin is a rift basin that geologists say developed after the separation of the Indian Plate from Africa in the late Jurassic period. It is believed to be the second largest submarine fan system in the world after the Bay of Bengal with high probability of hydrocarbon discoveries.

The Makran Offshore basin is separated from the Indus Offshore basin by Murray ridge, according to Syed Mustafa Amjad's report in Dawn. It is an oceanic and continental crust subduction zone with deepwater trenches and volcanic activity. The basin consists of oceanic crust and periodic emergence of temporary mud islands along the coast suggesting strong evidence of large hydrocarbon deposits.

American energy giant Exxon-Mobil has joined the offshore oil and gas exploration efforts started by Oil and Gas Development Corporation (OGDC), Pakistan Petroleum Limited (PPL) and Italian energy giant ENI, according to media reports.

Each company has 25% stake in the joint venture under an agreement signed at the Prime Minister’s Secretariat in May 2018 among ExxonMobil, Government Holdings Private Limited (GHPL), PPL, ENI and OGDC.

Exxon-Mobile's entry in Pakistan brings deep offshore drilling technology, its long experience and financial resources to the country. It is expected to accelerate exploration and more discoveries.

CPEC and Trade:

Pakistan has built Gwadar as its third major deep sea port after Karachi and Port Qasim. Gwadar port's planned capacity when it is completed will be 300 to 400 million tons of cargo annually.  It is comparable to the capacity of all of India's ports combined annual capacity of 500 million tons of cargo today.   It is far larger than the 10-12 million tons cargo handling capacity planned for Chabahar.

"We believe Gwadar is following in the footsteps of Shenzhen which represented a historic population rise, from a population of 30,000 in 1980 to 11 million people in 2017. Gwadar is poised to see massive population growth due to incoming industries, and we expect this to be one of the most strategic cities in South Asia." Hao-Yeh Chang,  China Pak Investments Corporation

To put Gwadar's scale in perspective, let's compare it with the largest US port of Long Beach which handles 80 million tons of cargo, about a quarter of what Gwadar will handle upon completion of the project. Gawadar port will be capable of handling the world's largest container ships and massive oil tankers.

Gawadar port is being built in Pakistan by the Chinese as part of the ambitious $46 billion China-Pakistan Economic Corridor (CPEC) that will eventually serve as Hong Kong West for  growing Chinese trade with the Middle East and Europe.  CPEC will also enable Pakistan to bypass Afghanistan to trade with Central Asia through China across China's borders with Tajikistan, Kyrgyzstan and Kazakhstan.

The volume of Gwadar property searches surged 14-fold on Pakistan’s largest real estate database, Zameen.com, between 2014 and 2016, up from a prior rate of a few hundred a month. “It’s like a gold rush,” said Chief Executive Zeeshan Ali Khan to an Express Tribune newspaper reporter. “Anyone who is interested in real estate, be it an investor or a developer, is eyeing Gwadar.”

Chinese private investment company China Pak Investment Corporation has recently announced it is acquiring 3.6 million square foot International Port City project in Gwadar. It plans to develop a $150 million gated community to handle the influx of 500,000 Chinese professionals expected in Gwadar by 2022.

Seafood Industry:

Pakistan’s fishing industry is very small relative to its vast potential. Pakistani fishermen own small fishing boats and their catch is very limited. The industry contributes only 0.4% of the country's $315 billion GDP.   However, the nation's seafood exports are growing, In fiscal year 2017-18, seafood exports increased 27.94% to 198,420 tons, earning $451.026 million.

Pakistani finishing industry is in  need of major modernization to make it more productive. China’s infrastructure investments in Pakistan are opening up the local fisheries sector on the Arabian Sea, with a major Chinese power station builder completing a fishing port as a “gift” to local people, according to a report in SeafoodSource. State-owned China State Power Investment Corp., which is building several power plants in Pakistan, said a new fishing port in Lasbela region on the Arabian Sea would aid the economy and increase the efficiency of the local fishing community in Baluchistan Province (of which Lasbela is part), says the report.

Summary:

Pakistan is beginning to focus on tapping vast resources in its 290,000 square kilometers of sea or about 36% of the country's land area.  Fishing industry is being modernized with Chinese help and Exxon has begun exploring offshore oil and gas reserves. Gwadar has been built as the third deep sea port and a major new metropolis is being built t hat could one day rival Chinese city of Shenzhen.

Related Links:

Haq's Musings

South Asia Investor Review

US EIA Estimates of Oil and Gas in Pakistan

Gwadar to Rival Shenzhen

Exxon Exploring Offshore Oil and Gas in Pakistan

Why Blackouts and Bailouts in Energy-Rich Pakistan?

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Comment by Riaz Haq on February 13, 2019 at 8:06am

#Aman19: #Pakistan #Navy’s expanding influence. The 46-nation naval exercise further cemented PN’s role as a leading and professional naval force not only in the #ArabiaSea region but also in the larger area of the #IndianOcean.
https://tribune.com.pk/story/1908895/1-aman-19-pakistan-navys-expan...

KARACHI: PNS Aslat and Saif fire a volley from their main guns towards a target buoy 4,500 yards away as helicopters buzz overhead and warships maneuver in the Arabian Sea during the culminating phase of Aman-19, the largest multinational exercise ever hosted by the Pakistan Navy (PN).

With participation from 46 navies, the exercise further cemented PN’s role as a leading and professional naval force not only in the Arabia Sea region but also in the larger area of the Indian Ocean.
With geopolitics undergoing a major realignment phase, the navy has become a major tool to project force, create goodwill throughout the region and increase Pakistan’s influence in the region.

“Now, we match India in terms of presence. If the Indian Navy has been to an area in the Indian Ocean, the Pakistan Navy is present there too,” said a senior PN officer.

The focus on further bolstering the combat capability of the PN is evident with the recent agreement to purchase eight submarines and four 054AP class warships from China.

On the final day of Aman-19, warships of the PN and foreign participating navies, including the Royal Navy, US Navy and the Peoples Liberation Army Navy (PLAN), came together to showcase the level of coordination achieved over days of drills at sea.

The drills kicked off by PN ships launching rocket depth charges at a simulated submarine target.

Pakistan-made PNS Moawin – the largest ship in the fleet – took centre stage during the second drill as it refueled ships while underway. PNS Aslat and PNS Saif took a position on either side of the fleet tanker the drill started. Underway refueling and replenishment is considered to be one of the most dangerous activities carried out at sea and extreme care was taken by PN personnel during the drill.

Gunnery demonstrations were also carried out by PN, Turkish Navy and (Chinese) PLAN (Navy) warships, and round after round from their main guns were thrown downrange towards target buoys with precision and speed.

As the drills ended, all participating ships presented a fleet review to the chief guest. Flying Pakistani colours – as a sign of respect – and their national flags, foreign and PN ships sailed past the chief guest during the phase.


Turkish frigate TCG Gokceada, PLAN’s Kunlun Shan and Luoma Hu, United Kingdom’s HMS Dragon, Royal Australia Navy’s Ballarat, American Arleigh Burke-class destroyer USS Decatur, Sri Lanka’s off-shore patrol vessel SLNS Sayurala, Royal Malaysian Navy’s support ship KD Mahawangsa and KD Kasturi, Italian Navy’s Carlo Margottini, Royal Navy of Oman’s Al Rahmani PNS Aslat, Saif, Shamsheer, Khyber, Azmat, Alamgir and Pakistan Maritime Security (PMSA) ships Kashmir, Zhob, Himmat and Basol were part of the fleet review.

Comment by Riaz Haq on February 14, 2019 at 4:36pm

#Pakistan, #China build friendship ties at multinational naval exercise #Aman19 which also centered on #maritime #security to protect strategic economic projects such as the #CPEC as well as sea lanes from the Persian Gulf. https://sc.mp/vbm4x8 via @SCMPNews

Chinese naval commander says war games strengthened mutual understanding and trust

Drills included protection of strategic projects such as China-Pakistan economic corridor

The Pakistan Navy has hosted the Aman – which means “peace” – exercises every two years since 2007 to promote regional cooperation and stability. India has never been invited, in a sign of the long history of strained ties between the neighbours.

China, Japan and the United States were among the countries taking part in Aman-19, from February 8 to 12, which included maritime conferences, seminars and cross-ship visits, as well as 23 sea operations with main-gun firing, formation movement and replenishment-at-sea.

Shao Shuguang, commander of the People’s Liberation Army Navy’s 998 Fleet, was quoted on a Chinese military social media account as saying the exercise had strengthened mutual understanding and trust between the participating navies.

-----------

China sent one of its biggest warships, the Kunlun Shan amphibious landing vessel, to the exercise, signalling its close relationship with Pakistan and the key role both nations hold in the Indian Ocean, according to analysts.


“The Pakistan-China relationship is very strong, and this is one more illustration of the strength of the Pakistan-China relationship,” said Madhav Das Nalapat, honorary director of the department of geopolitics and international relations at Manipal University in India.

“China is also now becoming an important maritime power, especially in the Indo-Pacific. By aligning with China, Pakistan hopes to get the synergy of that.

“India by itself cannot have any primacy in the Indian Ocean. But along with the United States, the two countries together can have primacy in the Indian Ocean. India is positioning itself to be allied with the US, but has not yet reached there.”

Tridivesh Singh Maini, assistant professor with the Jindal School of International Affairs in India, said the exercises should be a cause for alarm for India. “They will keep an eye on what’s going on, but they don’t need to be too concerned,” he said.

The military exercise also centred on maritime security to protect strategic economic projects such as the China-Pakistan Economic Corridor, as well as sea lanes from the Persian Gulf.

The US$62 billion China-Pakistan Economic Corridor (CPEC) is designed to connect China’s far west region of Xinjiang with Gwadar Port in Pakistan via a network of motorways, railways, oil pipelines and trading hubs.

The project is expected to be finished by 2030, and will provide China with an important trading route to the Middle East and Africa.

“India has very strenuously objected to the name CPEC being given to the part that goes through Pakistan-occupied Kashmir, but so far nothing has been done,” Nalapat said.

Kashmir has long been a hotbed for competing territorial claims between India and Pakistan. The two countries have fought three wars against each other since their independence from Britain in 1947, and two of those conflicts have centred on the Kashmir territorial dispute.

Comment by Riaz Haq on February 17, 2019 at 10:51am

Construction on Gwadar Airport in Pakistan to start in April


https://www.airport-technology.com/news/pakistans-gwadar-internatio...



Construction of the proposed Gwadar International Airport in Pakistan is scheduled to start in April this year following the completion of planning work.

The $246m airport is located in the volatile Balochistan region and is said to be the largest in Pakistan.

Soil testing started in January last year and has now been completed, with 300 boreholes created in several locations.

Sources told the EurAsian Times: “Currently, the Joint Coordination Committee (JCC) comprising the Pakistani and the Chinese officials look forward to initiate work on the Gwadar Airport in March as the feasibility study of the project has been completed, reviewed and approved by the competent authorities.”

The proposed airport will span over an area of 4,300 acres and will be able to accommodate narrow-body aircraft, including ATR 72 and Boeing B-737, as well as wide-body aircraft such as Boeing B-747.

“The projects in Gwadar are conducted under a framework agreement with NDRC and a MoU with MOFCOM and the Exim Bank. Unlike many of the other CPEC projects in Gwadar, the New Gwadar International Airport is not financed by a loan from China but through a Chinese grant,” the sources told the publication.

The sources also told the news agency that the Pakistani government is likely to announce the initiation of formal work on the Gwadar International Airport in the next two weeks.

They added: “The provision of funds for this project would be ensured in line with the mutual agreement made between the Pakistani and the Chinese governments.”

The Government of Balochistan has already added the Gwadar Airport to its master plan for Gwadar, which also involves projects to transform the region into a financial hub.

Comment by Riaz Haq on March 14, 2019 at 11:34am

#Pakistan Aims To Become A Natural Gas Hotspot. It has estimated conventional #gas reserves of 20 trillion cu ft and #shale gas reserves exceed 100 trillion cu ft, making it attractive to foreign #energy investors. #FDI OilPrice.com https://oilprice.com/Energy/Natural-Gas/Pakistan-Aims-To-Become-A-N... #oilprice

Pakistan is eager to open up its gas deposits to foreign energy companies in a bid to boost domestic production amid soaring demand, two government officials told media this week. The country has trillions of cubic feet in natural gas reserves, and although some of these have been exploited, the last decade has seen an outflow of foreign energy investors because of Islamist violence. Is the worst over?

Pakistan, a country with a fast-rising population, has recently been plagued with power outages largely resulting from a shortage of fuel necessary to keep its power stations going. Imports of gas and LNG are on the rise, but Imran Khan’s government seems to be aware that domestic production is almost invariably cheaper.

As a result, Pakistan is now preparing to start tendering gas blocks to all parties interested in exploration.

“I expect in the second half of this year we will be auctioning at least 10, if not 20 blocks for exploration,” the head of the government’s task force for an energy reform, Nadeem Babar, told Reuters earlier this week. He added that the government was in the process of making changes to its natural gas exploration and production regulations and drafting the country’s first ever shale resource policy.

“Pakistan provides a level playing field for all the E&P companies and even state-owned companies also have to participate in bidding rounds and compete with other companies,” said the country’s Minister for Petroleum and Natural Resources as quoted by The News International.

Pakistan imports nearly 80 percent of energy requirements from the international market. The country’s demand for energy has been increasing by 8 percent a year,” Ghulam Sarwar Khan also said, adding the government was doing its best to make Pakistan a more investor-friendly country as part of efforts to change the status quo in energy supply and demand.

Pakistan has estimated conventional gas reserves of 20 trillion cu ft and shale gas reserves exceed 100 trillion cu ft, which certainly makes the country an attractive destination for gas drillers as long as the security situation remains stable.

So far, the authorities have delineated more than 30 gas blocks, all onshore, Babar also told Reuters. If these attract sufficient interest, they could go a considerable way towards reducing the gas shortage plaguing the country, where demand for gas for 2017/18 was calculated at 6.9 billion cu ft daily, exceeding production by almost 3 billion cu ft.

With such demand levels—and rising, too—Pakistan is naturally an attractive destination for gas exploiters. Russia, Iran, and Qatar are all large suppliers. Earlier this week, Pakistani media reported government officials were negotiating an increase in Qatari LNG imports from 500 billion cu ft daily to 700 billion cu ft daily. Last month, the government inked an import deal with Gazprom for 500 million to 1 billion cu ft daily.

The country also recently completed two LNG import terminals but the super-cooled fuel is more expensive than Islamabad would like, especially given its level of import dependency.

According to Nadeem Babar, Aramco, Gazprom, and Exxon have already expressed interest in some of the blocks to be auctioned later this year. Italy’s Eni is already active in Pakistan and may join the bidders along with others attracted by the underexplored resources in the country where one of three wells yields commercial gas.

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