United States Ambassador to Pakistan, Richard Olson on Wednesday said that major American companies had shown a keen interest in the project to import Liquefied Natural Gas (LNG) and participate in the privatisation process of energy sector companies.
In an exclusive interview with Business Recorder, Ambassador Olson said that US had provided on average about $3 billion per annum to Pakistan since 2009 which included economic assistance, security assistance and Coalition Support Fund (CSF). He said there was great enthusiasm and interest in the LNG import project as the GoP had set a very aggressive timeline for building the terminal in Karachi that would make provision of LNG possible.
"I think there are many well known US companies, which are serious to participate in LNG import. Exploration of oil and gas is also another field generating interest in the US. These are early days and will take sometime to develop but certainly there are interests in offshore development," he added.
Ambassador Olson said that energy was one of the five pillars within economic assistance area and a number of projects had been started mostly refurbishing hydro electric power including Terbela Dam, Satpara Dam, Gomal Zam Dam as well as Kurram Tungi Dam. Olson said, "The result of these projects so far is that the US added 1000 MW to the national system and about 200 MW more is anticipated to be added by the end of the year." He said that energy was the primary focus of the US economic assistance to Pakistan.
In reply to a question about the recent visit of Pakistani delegation led by Minister for Water and Power Khawaja Asif and Minister for Petroleum Shahid Khaqan Abbasi, Ambassador Olson revealed that the Pakistani delegation taken by the US to Washington actually made two trips - to reactivate the energy working group and to lead a delegation of about 17 Pakistani companies to Houston. "We have a very high level participation from Pakistan side with Ministers Khawaja Asif, Shahid Khaqan Abbasi as well as Advisor to the Prime Minister on energy Mussadak Malik", he added. The ambassador said the delegation also included a number of representatives from the power sector State Owned Enterprises (SOEs). The US energy side was headed by Carlos Pascual US co-ordinator for International energy affairs.
He said that the Pakistan side laid out a programme to reform the energy sector during strategic dialogue on energy and talked about improving the fuel mix as well as the plan for privatisation. "They (Pakistan delegation) also talked about the ways they could encourage US private sector to participate in the energy sector in Pakistan. The first part led to very logically the second part of the trip to Houston, which actually was genesis in Dubai ''Business Opportunities Conference'' held in June 2013 and attended by Senator Dar and Khawaja Asif," the ambassador said.
Olson said that the two sides agreed on the need to show that Pakistan was open to business in US and to flash out the idea that was developed in Dubai that the relationship was about trade and investment and not just about aid. He said that a very strong delegation of 17 Pakistani companies went to Houston and major emphasis was on encouraging US investment in energy in two areas especially in exploration and development of Pakistan''s oil and gas fields. Olson revealed that there were major American and international oil companies as well as companies associated with the oil and gas business as well as service providers in oil and gas sector and a number of other people and political figures in Houston. The ambassador maintained that it was important for the US embassy to facilitate business to business contacts between the US and Pakistan private sector.
In reply to a question, he said, "This is no open secret that there were ups and downs in Pakistan and US political relationship but it is important to have private sector dimensions. We would like to privatise relationship between Pakistan and US and have private sector interaction as much as possible."
Answering another question, he argued that American companies would show an interest in privatisation process being initiated by the GoP. However, he added it would depend on the specifics of the privatisation programme. He said Pakistani delegation which was in Houston (US) recently laid down a privatisation vision. "It will be hard to gauge the actual level of interest in privatisation until people see specific terms. There should be interest in privatisation from the American side," he further added.
Ambassador Olson acknowledged that security in Pakistan was a challenge for the companies operating in Pakistan. However, he argued that major energy sector companies were operating around the world and even in those parts where security challenges existed. "Companies can invest in Pakistan despite such challenges if incentives and regulatory environment is in place. The government can help on security issues," he stated. He said the US is one of the largest investors in Pakistan and has been for many years despite security challenges. "I think if there is economic and business opportunities, business will come," Olson continued.
When asked if the optimism of Pakistani authorities was justified that the US would withdraw its opposition to the Iran-Pakistan gas pipeline as and when a deal is struck between US and Iran, Olson said that the US position on the issue was very well known. "It''s important to let negotiations go forward between P-5 plus one on Iran''s issue. There are many challenging issues to be addressed. The international community as a whole has concerns on the potential development of nuclear weapons by Iran. I think let these negotiations proceed and see what happens. First round of talks held by the Secretary of State John Kerry and second is due on Thursday (today) in Geneva. It''s premature to judge the outcome of ongoing negotiations or make any assumptions about changes in the US or in the global policy until negotiations are concluded."
Asked whether Pakistani delegation discussed the issue of IP with the US authorities during the recent visit, he said this issue came under discussion in general terms and added that the question of Pakistan''s energy supply came up in different ways but not the pipeline. Replying to a question regarding provision of civil nuclear technology to Pakistan, Ambassador Olson said that primary areas of discussions were hydropower, thermal, solar and wind. He maintained that provision of civil nuclear technology was a very complicated topic and had been discussed at different fora, adding that US focus was on hydroelectric, gas sector etc. He added that the US had extended funding for refurbishment of Jamshoro Thermal Power Station in Sindh and $95 million for solar energy.
In reply to another question, Ambassador Olson said World Bank was supporting Dasu hydropower project whereas the US was supporting Diamar Bhasha. "The US has extended financial support for feasibility study of Diamar Bhasha dam. This project may need $10 or $14 billion which means support of IFC is not enough but private sector participation is necessary," he concluded.
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