KARACHI – Chinese Premier Wen Jiabao left Islamabad on Sunday after a three-day official visit that included a commitment to invest about US$20 billion in Pakistan within the next three years and further agreement on private-sector trade deals worth about $15 billion.

Wen, who arrived in Islamabad on December 17 on his first visit there in five years, vowed to boost trade, investment and strategic cooperation with Pakistan. The signed agreements are of considerable importance to Pakistan, whose economy was dealt a big blow by catastrophic flooding this year and which suffers from sluggish foreign investment. China donated $229 million to help the country recover from the floods as well as granting Pakistan a soft loan of $400 million.

The scale of agreements, aimed at increasing bilateral trade to $18 billion by 2015 from about $7 billion last year, were larger than the $16 billion worth of deals China signed earlier in the week during Wen’s visit with India, although trade between those two countries is targeted to double to $100 billion a year by 2015.

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KARACHI – British energy giant BP Plc is to sell energy assets in Pakistan to the United Energy Group Ltd (UEG), a Hong Kong-based investment group, for US$775 million, trumping offers from Pakistani energy companies. The deal, agreed on Tuesday and expected to be completed in the first half of next year, is part of BP’s ongoing divestment plan to help pay for the devastating Gulf of Mexico oil disaster earlier this year. UEG, in its first venture in Pakistan, will pay BP a cash deposit of $100 million with the balance due on the sale closure. BP is selling interests in nine producing and exploration blocks in Sindh province and four offshore exploration blocks in the Arabian Sea. Four offshore exploration blocks that BP shares with Pakistan Exploration Ltd and with state-run Oil and Gas Development Co (OGDCL), the country’s biggest listed firm, are not included in the sale.

The proved reserves of the assets sold are 43.1 million barrels of oil equivalent as of the end of 2009, while the net production of the assets is about 35,000 barrels of oil equivalent a day.

UBS analysts estimated in a July research note that BP’s fields in Pakistan were worth $690 million. OGDCL and Pakistan Petroleum Ltd (PPL) lost their joint bid for acquiring BP’s assets, as it was significantly lower than those submitted by other parties. The purchase would have been relatively more important for PPL, as output from its mainstay Sui gas field in Balochistan has been declining over the past few years.
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KARACHI, Pakistan – China and Pakistan, which are already working to improve land communications across their mutual border, have inaugurated the first air cargo service linking Islamabad with Kashgar in China’s northwest Xinjiang province, with Rayyan Air, a Pakistani charter airline, operating the first 90-minute flight.

Opening of the Islamabad-Kashgar air cargo route last week came just before Chinese Premier Wen Jiabao’s visit to Pakistan for the Pakistan-China strategic dialogue to be held in Islamabad on December 17. Ahead of Wen’s visit, Beijing agreed this month to extend cooperation in 36 development projects worth US$13.2 billion to boost economic activity in flood-hit areas of Pakistan.

Kashgar, located near the borders of Pakistan, Uzbekistan, Kyrgyzstan, Afghanistan and India, is well placed to become an important air logistics base. Cargo shipped between China and Pakistan has so far mostly gone by truck across a border closed from the end of December to May each year due to the severe winter climate.
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KARACHI – Proposals to build a US$7.6 billion natural gas pipeline, known as TAPI, running from Turkmenistan through Afghanistan and Pakistan to India, have been rejuvenated with New Delhi throwing weight behind the scheme.

The four countries at the weekend signed broad agreements to move forward with the complex and high-risk plan to build the pipeline across rugged territory plagued by war and terrorism.

The 1,680 kilometer TAPI gas pipeline, scheduled to be completed by 2013-14, would bring 3.2 billion cubic feet of natural gas per day (bcfd) from Turkmenistan’s gas fields to Multan in Central Pakistan and end in Fazilka, an Indian city near the India-Pakistan border.
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