POWERGLOBE (Qatar) targets for large-scale LNG temrinal in Pakistan (Gwadar port)

POWERGLOBE LLC, Water-Power Development Authority (WAPDA) and Karachi Electric (K-Electric) sign agreement for energy development projects across the China-Pakistan Economic Corridor (CPEC). POWERGLOBE – a company licensed by the Qatar Financial Centre Authority and it powers under Article 11 (1) of the Qatar Financial Centre Law (Law No7) of 2005 of the State of Qatar- will provides services in NG/LNG to Power development project management; NG supply-contract valuation; energy mix and portfolio management; NG and power (electricity) projects management; renewable energy development projects across CPEC multibillion project. China-Pakistan Economic Corridor is a framework of regional connectivity. China, Pakistan, Qatar, Iran and Turkey are expected to heavily benefited from CPEC project. POWERGLOBE’s Energy-Services Team has recently visited Pakistan and had several meetings with CPEC Co., Gwadar Port Authority, WAPDA and K-Electric.

Aerial veiw for the FSRU facility in Pakistan (Gwadar Port)

CPEC will not only benefit China and Pakistan but will have positive impact on Iran, Afghanistan, India, Central Asian Republic, and the region. The enhancement of geographical linkages having improved road, rail and air transportation system with frequent and free exchanges of growth and people to people contact, enhancing understanding through academic, cultural and regional knowledge and culture, activity of higher volume of flow of trade and businesses, producing and moving energy to have more optimal businesses and enhancement of co-operation by win-win model will result in well connected, integrated region of shared destiny, harmony and development. China Pakistan Economic Corridor is journey towards economic regionalization in the globalized world. It founded peace, development, and win-win model for all of them. China Pakistan Economic Corridor is hope of better region of the future with peace, development and growth of economy.

QATAR – IRAN – PAKISTAN – CHINA: The CPEC multibillion project – China-Pakistan Economic Corridor (QGN photo)

Basically the CPEC is a collection of infrastructure projects that are currently under construction throughout Pakistan. Originally valued at $46 billion, the value of CPEC projects is now worth $ 62 billion. CPEC is intended to rapidly modernize Pakistani infrastructure and strengthen its economy by the construction of: modern transportation networks, numerous energy projects, and special economic zone. On 13 November 2016, CPEC became partly operational when Chinese cargo was transported overland to Gwadar Port for onward maritime shipment to Africa and West Asia. 

A vast network of highways and railways are to be built under the aegis of CPEC that will span the length and breadth of Pakistan. Inefficiencies stemming from Pakistan’s mostly dilapidated transportation network are estimated by the government to cause a loss of 3.5% of the country’s annual gross domestic product. Modern transportation networks built under CPEC will link seaports in Gwadar and Karachi with northern Pakistan, as well as points further north in western China and Central Asia.  A 1,100 kilometre long motorway  will be built between the cities of Karachi and Lahore as part of CPEC, while the Karakoram Highway between Rawalpindi and the Chinese border will be completely reconstructed and overhauled. The Karachi – Peshawar main railway line will also be upgraded to allow for train travel at up to 160 km per hour by December 2019. Pakistan’s railway network will also be extended to eventually connect to China’s Southern Xinjiang Railway in Kashgar. The estimated $11 billion required to modernise transportation networks will be financed by subsidized concessionary loans.

Over $33 billion worth of energy infrastructure are to be constructed by private consortia to help alleviate Pakistan’s chronic energy shortages, which regularly amount to over 4,500MW, and have shed an estimated 2–2.5% off Pakistan’s annual gross domestic product. Over 10,400MW of energy generating capacity is to be brought online by the end of 2018, with the majority developed as part of CPEC’s fast-tracked ”Early Harvest”  projects. A network of pipelines to transport liquefied natural gas and oil will also be laid as part of the project, including a $2.5 billion pipeline between Gwadar and Nawabshah to eventually transport gas from Iran. Electricity from these projects will primarily be generated from fossil fuels, though hydroelectric and wind-power projects are also included, as is the construction of one of the world’s largest solar faarms.

CPEC’s potential impact on Pakistan has been likened to that of the Marshall Plan undertaken by the US in post-war Europe. Pakistani officials predict that CPEC will result in the creation of upwards of 2.3 million jobs between 2015–2030, and add 2 to 2.5 percentage points to the country’s annual economic growth. Were all the planned projects to be implemented, the value of those projects would be roughly equivalent to all foreign direct investment in Pakistan since 1970, and would be equal to 17% of Pakistan’s 2015 gross domestic product.

Gwadar Port Complex

Initial infrastructure works at Gwadar Port  commenced in 2002 and were completed in 2007, however plans to upgrade and expand Gwadar’s port stalled. Under CPEC agreement, Gwadar Port will initially be expanded and upgraded to allow for docking of larger ships with deadweight tonnage of up to 70,000. Improvement plans also include construction of a $130 million breakwater around the port as well as the construction of a floating LNG facility that will have a capacity of 500 million cubic feet of liquefied natural gas per day and will be connected to the Gwadar-Nawabshah segment of the Iran-Pakistan gas pipeline.

The expanded port is located near a 2,282-acre free trade area in Gwadar which is being modelled on the lines of the Special Economic Zones of China. The swathe of land was handed to the China Overseas Port Holding Company in November 2015 as part of a 43-year lease. The site will include manufacturing zones, logistics hubs, warehouses, and display centres. Businesses located in the zone would be exempt from customs authorities as well as many provincial and federal taxes. Business established in the special economic zone will be exempt from Pakistani income, sales, and federal excise taxes for 23 years. Contractors and subcontractors associated with China Overseas Port Holding Company will be exempted from such taxes for 20 years, while a 40-year tax holiday will be granted for imports of equipment, materials, plant/machinery, appliances and accessories that are to be for construction of Gwadar Port and special economic zone.

The special economic zone will be completed in three phases. By 2025, it is envisaged that manufacturing and processing industries will be developed, while further expansion of the zone is intended to be complete by 2030. On 10 April 2016, Zhang Baozhong, chairman of China Overseas Port Holding Company said in a conversation with The WP that his company planned to spend $4.5 billion on roads, power, hotels and other infrastructure for the industrial zone as well as other projects in Gwadar city. China Pakistan Economic Corridor is hope of better region of the future with peace, development and growth of economy.