1- FEDERAL BUDGET 2003-2004




Next 2-3 years are highly significant


July 14 - 20 , 2003 




The government would soon award contacts for undertaking study of remaining three geological zones of Thar coal deposits.

A Chinese mining and power generation company is currently carrying out detailed studies on one geological zone for setting up 1000 mw coal-fired power plant at mine site in Thar.

In order to develop Thar coal field having huge coal deposits, the government has also established Thar Coal Authority to accelerate the work on the feasibility study of 1.75 billion tons coal reserves to determine economic viability of related projects.

In this connection, the government seems determined to go ahead with an aggressive policy for focusing on coal mining and encourage modern use of this alternative cheaper fuel for power, cement and other processing industries.

The industries in developed countries, including the USA, China and Australia, depend upon coal-based energy from 50 to 70 per cent.


Exploration of the oil and gas sector is another area attracting foreign investment in Pakistan. During past 6 months, the government granted 10 Concession licenses to exploration companies which attracted $46 million investment in the petroleum sector during the period.

In order to speed up exploration activity in this sector, the government is considering more incentives including congenial atmosphere so that the investors could concentrate for rapid development in these projects. Hopefully, these steps would help increasing exploration and production in the oil and gas sector.


Another significant step, which is under active consideration of the government, is to privatize the public sector organizations dealing with the oil and gas business. In this connection, the privatization process of government units is going ahead according to the program and has received tremendous response from the international investors. The sale of PSO, the largest oil marketing company of the country, is almost ready and the change of hands in the management is expected to take place at the earliest.




Under the well thoughtout plan to replace oil with the natural gas consumption, accelerated efforts are being made for development of the new gas discoveries to augment the gas supply for industrial and power generation consumption.

In this regard, an additional 1000 million cubic feet gas per day would be made available after development of new wells by the end of this year. The focus of this additional supply of natural gas will be the power sector. It is expected that this additional supply will help converting power plants being run on oil into gas which would also help saving $1.5 billion per annum on account of import of furnace oil.

Another major development in the natural gas sector is the preparation of the feasibility report of the cross border gas pipeline project worth $2.5 billion. This feasibility report is expected to be ready by September this year.

Steering Committee of this cross border gas pipeline project, comprised of the three countries i.e. Pakistan, Afghanistan and Turkmenistan, recently met in Manila and agreed upon the methodology and time-table presenting by the consulting company which is carrying out the techno-economic feasibility study for the project. The ground breaking of this project is likely to take place early next year and take about 2.5 year's time to get ready for supply of gas from Turkmenistan to Pakistan. This project is going to be an international event in the energy sector and sure to open doors for a number of down stream projects related to natural gas. This project is going to have its economic impact in the entire region.

Although, India which is one of the potential buyers of this huge quantity of gas has expressed its willingness to participate in this project, yet there is no problem of the buyers or consumers of the natural gas otherwise. Hence, participation of India in this project does not matter to a great extent and the project would go ahead according to plan, sources said.

This cross border gas pipeline originating from Ashgabat to Pakistan would transport up to 30 billion cubic meters of natural gas per annum.

Once this pipeline project starts operation, experts in the energy sector feel that it would open a number of other international projects and enhance regional economic activity. They cited the example of another pipeline project that is to take its route from Iran to India through Pakistan. As soon as the work on Turkmenistan-Pakistan gas pipeline proceeds ahead, it would naturally pave the way for Iran pipeline project.

Another feasibility report to bring natural gas from Qatar to Pakistan has already been completed and is likely to attract international investors. This pipeline is likely to terminate at the newly developing port city of Gwadar. Since massive industrial and power generation in that new port city is in the store, gas would be the best option as an alternative fuel for power generation and other industrial purposes.

This international activity in the energy sector indicates that the next 2-3 years are highly significant in the overall economic growth of the country through development of the energy sector in this region.