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Rich Pakistan of natural gas and energy mix

It is a general belief that there are four elements of life i.e. Earth, Air, Fire and Water. Fire, which is synonymous to energy has always been more important and still considered the most significant. Keeping in view the importance of the energy in the everyday life people since ancient times, have always strived to find out the efficient energy resources. In this quest, they have evolved from wood and coal to gas, wind, solar, nuclear energy and the list goes on. In this article, we will discuss the history and importance of natural gas as a source of energy.

The natural gas that is extracted out of the ground is millions and millions of years old. However, it is not far ago that the techniques to trace and extract the gas available under the ground has been developed and employed commercially. Natural gas was first discovered in America in 1626; however, it was in 1859 that Colonel Edwin Drake dug first well and discovered oil and natural gas 69 feet below the surface of the earth. Historians consider this well as the first-ever-commercial gas-well in the history of the world.

In Pakistan the natural gas was discovered near Sui located in Baluchistan in 1952 and commercial exploitation of the field started in 1955. Current gas reserves of Pakistan are about 20.79 trillion cubic feet. Gas is almost 50% of our primary energy mix. Current consumption of the natural gas is around 40.74 B cu ft. Sindh produces 63%, Baluchistan 17 %, KPK 7%, Punjab 3% and 7-10% is the LNG imports. The industrial sector uses natural gas as a fuel for process heating, in combined heat and power systems, and as a raw material to produce chemicals, fertilizer, and hydrogen.

Keeping in view the limited gas reserves, we can say Pakistan is an energy-starved country. Local energy appetite is expected to grow at Compound Annual Growth rate of 4.5 to 6.0 in the coming decade further aggravating this scarcity. According to the Oil and Gas Regulatory Authority (Ogra), the supply-demand gap would reach around 8.5 bcfd in 2028-29. Pakistan like other energy-starved countries will have to work on various alternative energy resources to overcome this emerging energy shortage.

The Government of Pakistan may employ two-pronged strategy one for improving existing setup and the other for exploring potential resources and opportunities. Government should take corrective actions to improve and safeguard the existing gas-supply infrastructure to overcome line-losses, gas theft etc to reduce Unaccounted for Gas (UFG) loses. Such UFG losses are a burden on the government exchequer and cause wastage of a precious energy resource. This warrants measures to ensure zero pilferage/losses (UFG losses).

One of the important project to bring natural gas to Pakistan is the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project. It will bring natural gas from the Gylkynish and adjacent gas fields in Turkmenistan to Afghanistan, Pakistan and India. Asian Development Bank is facilitating and coordinating this TAPI project. It would be a 56-inch diameter 1,680 KM pipeline with design capacity of 3.2 billion cubic feet of natural gas per annum from Turkmenistan through Afghanistan and Pakistan up to Pak-India border. This project is expected to be operational by end 2020. The share of Pakistan would be 1,325 Million Cubic feet per day (MMcfd).

Pak-Iran Gas Pipeline is also an important project and would be quite significant to meet the energy demand of Pakistan. However, the progress on this project is intermittent and an element of uncertainty is associated with this project due to US economic sanctions on Iran.

 

Pakistan is also working on import of Liquefied Natural Gas (LNG) to broaden its energy mix and to mitigate the energy crises. To facilitate the import and distribution of the LNG, there are two R-LNG terminals processing 600 MMCFD each, operating at Port Qasim, Karachi. Pakistan State Oil (PSO) having a 15 years agreement with Qatar Gas for 500 MMCFD and a 5 years agreement with Genvor for 100 MMCFD owns one of these terminals. Pakistan LNG Ltd (PLL) owns the second terminal having 15 years agreement with ENI for 100 MMCFD and five years agreement with Genvor for 100 MMCFD. Mitsubishi Corporation is also setting up a 750 Million Cubic Feet (MMCFD) per day of LNG import and re-gasification.

This LNG import and distribution has its own complications like distribution set up and a parallel tariff system. Nevertheless,it is must to have such LNG import arrangement to overcome the energy crises.

Pakistan is rich in natural resources. As such, large oil and gas reserves are present beneath its earth. The government is encouraging various exploration projects especially the offshore exploration. The Government of Pakistan has announced tax exemptions for the companies and the joint ventures that are party to any production sharing agreement with the government for offshore petroleum exploration and production activities. The world’s largest oil and gas company ExxonMobil has ventured in Pakistan and have commenced drilling 230 Km inside the sea. This is the first time that any company is drilling inside the see in Pakistan to explore oil and gas expecting enchanting results.

To overcome the problem of scarcity of natural resources, the world is resorting to alternative energy sources like solar, wind, nuclear etc. etc. As such, renewable energy and nuclear energy are the fastest growing energy resources around the world. They are growing at a rate of 3% per annum. Pakistan is also exploring the chances of developing and utilizing these resources to broaden its energy mix. Quaid-e-Azam Solar Park in Bahawalpur and Wind power projects in Jhimper and Gharo in Sindh are the steps forward in this direction.

There is a surge in demand for energy due to industrialization and population growth. No one can deny the fact that the natural resources are limited and are fast depleting. Scientists and technologists are trying to develop alternative energy sources especially the renewable energy. Pakistan may have an advantage due to its geographic proximity to oil and gas rich Central Asian Republics (CARs) and Iran, but we cannot afford ignoring such technological developments in energy sector. Pakistan should also stay abreast of all these developments and should take lead in adopting to such alternative energy resources.

(The writer is a sales and business specialist based in Islamabad. He can be reached at nadeem_naj@hotmail.com)

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