DEPLETING GAS RESOURCES

KANWAL SALEEM
(feedback@pgeconomist.com)
July 25 - 31, 20
11

As per the official figures, Pakistan's own balance of recoverable natural gas reserves stood at 28.33 trillion cubic feet per day (mmcfd) by January 1, 2010. The average daily gas production in the country was 4.5 billion cubic feet and consumption 6.5 billion cubic feet by June 30, 2011.

The country would continue to face gas load-shedding till 2025 due to unjust utilization and excessive use of precious gas resources of the country, as the gap between demand and supply has gradually been increasing and there is no chance to get rid of gas load-shedding till 2025.

The country's domestic energy resources are expected to reach the peak of 54 million Tones Oil Equivalent (TOE) in 2013. However, it would decline to 43 million TOE by fiscal year 2025, primarily because of decline in natural gas production.

Fossils fuels including gas, oil and coal in energy mix could be projected to be at the same level of 88 per cent while the share of domestic resource in fossil fuel supplies is being to fall from present 64 to 18 per cent in FY 2025 in the Business As Usual (BAU) scenario.

Sources told PAGE that oil import bill may go up to $60 billion in FY 2025, 400 per cent higher than the amount of $12 billion, which was spent on oil imports during FY11, i.e. 63 per cent of country's export earning.

The country's energy supply mix for FY2009-10 was recorded up to 66.5 million TOE out of which Hydro-Nuclear Electricity stood at 11.8 per cent, Coal energy 7.4 per cent, Liquefied Petroleum Gas 0.4 per cent, natural gas 51 per cent and furnace oil 29.4 per cent.

During FY 2010-11 major part of the petroleum products particularly crude and furnace oil up to 43 per cent was used to generate electricity power, 0.5 per cent in domestic sector, 47 per cent for transport segment, 7 per cent of total oil consumption in industrial and lowest share of oil consumption was recorded in agriculture sector.

Official estimates show total 3,982 MMCFD gas was produced with highest share from Sindh 2,805 MMCFD equal 70 per cent of the total, second largest producer Balochistan 898 MMCFD showing 23 per cent of total production, 186 MMCFD in Punjab showing 5 per cent of total production during FY 2009-10. However, a decline in consumption than production was observed during the same fiscal year. The highest consumption was in Punjab province up to 1,616 MMCFD i.e. 46 per cent of total consumption, 1,498 MMCFD in Sindh (43 per cent), Balochistan 243 MMCFD (7 per cent) and 122 MMCFD gas was consumed in Khyber Pakhtunkhwa province showing only four per cent consumption of the total 3,480 MMCFD gas.

Sector wise gas consumption pattern during FY 2009-10 showed that highest level of gas consumption was recorded in power sector up to 1.165 MMCFD where gas was used to generate electricity by Independent Power Producers (IPPs), 594 MMCFD gas was consumed by industrial sector, 559 MMCFD by domestic consumer, 197 MMCFD by Condensed Natural Gas (CNG) sector, 438 MMCFD in fertilizer sector, 35 MMCFD in Cement industry, 92 MMCFD gas was consumed in commercial sector, while 290 MMCFD gas was utilised for captive power.

Experts are of the firm view that Pakistan direly needs to explore all avenues for getting gas to meet future requirements. They said efforts need to be made to get gas from Iran and CAS. According to the Federal Minister for Petroleum and Natural Resources Dr. Asim Hussain, construction work on Pakistan-Iran gas pipeline would begin within six months.

Survey work on Pakistan-Iran Gas Pipeline project is going on since May this year and the project would be completed by 2014.

It may be recalled that Pakistan has invited expressions of interest (EOI) from national and foreign banks for the construction of a proposed $1.2 billion pipeline to pump Iranian natural gas to the energy-starved country.

The Inter State Gas System (ISGS), a company set up by the government to act as project manager, has set a deadline of August 20 for the submission of expression of interest (EOI) from the banks for financial advisory services.

Under the deal finalized in March last year, Iran will pump 750 million cubic feet of gas to Pakistan each day by 2014.

"ISGS is inviting EOI from reputable/international banks ... to act as financial adviser to assist ISGS in arranging capital (debt and equity) for the project," the company said in a document. "The prospective consortia, if any, may include multiple banks along with other non-banking enterprises, but each consortium shall identify one bank as the lead adviser." The lead adviser would manage the entire transaction up to the financial close, it said.

Sources claimed that a route survey was already underway for laying the 750-km pipeline, which is estimated to cost $1.2 billion. Iran is said to have almost completed construction of its portion of the pipeline. The Pakistani section of the planned pipeline will cross the province of Balochistan, where separatist militants have been targeting power and gas installations for years in a decades-long low-scale insurgency.

Despite security fears over the pipeline, analysts say the southern part of the province, through which it will pass, is less vulnerable and the plans are likely to go ahead.