There are strong hopes that the current visit of
President Pervez Musharraf to China this week will open a new chapter in
the energy sector of Pakistan. An agreement is to be signed for
development one of the world's largest coalfields so far neglected in
District Thar in the Province of Sindh.
An estimate reveals that Thar coalfields have a
proved reserve of over 20 billion tons of coal which can bring a
revolution by cutting down the cost of power generation if all the
available resources are used productively.
At present the national economy is confronted with
two formidable challenges which include the huge import bill on account
of POL products which costs over $3 billion per annum and on top of all
is the exorbitant price of electricity which is proving a serious
irritant in halting the industrial growth in Pakistan. Besides stagnant
growth in the manufacturing the unbearable cost of electricity also
causing unbearable sufferings to the consumers throughout the country.
For bringing down the cost of electricity, the plans are underway to
shift the entire power generation sector both in the public as well as
the private sector (IPPs) to cheaper fuel i.e. either natural gas or
coalfired system. Although it's a long-term policy but there is no
option but to go for that. It is unfortunate that the previous
governments without considering the adverse impact of the policy under
which the then government entered into power purchase agreements with
the Independent Power Producers (IPPs). Although the arrival of the IPPs
helped in overcoming the problem of load shedding due to power
generation support by the private sector, however the cost played havoc
both on social and economic fronts. The present government has taken
some corrective measures in this respect; however, the costly POL and
electricity which are considered as the pivot of the economy are beyond
the reach of the common man.
However, the plans for shifting from oil to gas and
coal have started producing results as the fuel oil consumption fell by
16 per cent in two months up to August 31 as producers switched over to
coal or natural gas because of rising fuel oil prices.
The companies consumed 2.32 million tons of petroleum
products in July and August, from 2,77 million tons in the same period a
Gas availability has increased to new discoveries in
the last fiscal year, thus attracting more power producers to use gas as
cheaper mode of fuel. About 78 percent of Pakistan's fuel oil is used to
generate electricity and to run cement factories.
The furnace oil consumption fell 21 percent to
898,000 tons down from 1.14 million tons.
The oil bill fell by 4 per cent to $679 in the three
months up to September 30, from $708 million.
Sui Southern Gas Company Pakistan second largest
natural gas distributors raised its supply capacity by 33 per cent to
1.2 billion cubic feet of gas per day after completing a pipeline
Pakistan's gas demand is expected to grow to 5.5
billion cubic feet a day by 2012 from 2.6 billion cubic feet now. The
government seeks to have most power plants funning on gas or coal by end
of this year.
Oil bill and consumption will fall further in the
current fiscal year as most of the power producers and cement makers
will also switch to gas. Pakistan's imports of crude oil and oil
products in the year to June 30 rose by 9 per cent to $3.06 billion from
THAR POWER PLANT
Currently, world's developed economies such as China,
US, Germany as well as India are using coal which is obviously much
cheaper fuel for power generation as compared to furnace oil or natural
The agreement on the installation of a 600mw Thar
coal power generation plant at Duddar is most likely to be finalized
when President Musharraf visits China in the first week of November,
The relevant authorities in Pakistan have already
discussed the pros and cons of the agreement with the Chinese
counterparts who had recently visited Pakistan.
In connection with the ground work for enhancing
economic cooperation between the two countries, experts and
professionals including Director General Petroleum Concession have
already proceeded to China prior to the visit of the President Musharraf.
China's leading company Shanhua had already shown
keen interest in developing the coal-fired power generation plants
adjacent to Thar coalfields. The first phase the Chinese company will
start work in about 50-square km of Thar Coal area and install two
coal-fired power generation plants each of 300MW capacity.
The Chinese company Shanhua was also actively busy in
preparing the feasibility study of Thar coal to ascertain the
gasification of the coal and coal bed methane (CBM). China would also
help Pakistan in installation of 3000MW power generation plants after
the completion of work on these two power plants.
The experts are of the view that the development of
Thar coalfields will do a magic to the social development of the remote
area of district Thar where people are deprived of the basic needs such
as drinking water. The energizing of the area is expected to help turn
the deserts of Thar into a Greenland which assures economic glory in the
days to come inshallah!