The petroleum sector is gradually reducing its
reliance on imports, especially the fuel oil and diesel which are the
two major contributors to enhance the POL products to a level of around
$3.5 billion a year.
The policy of replacing these two costly components
of our total POL products by natural gas and cheaper fuels like coal
etc, has however started producing results which is reflected in
reducing the fuel oil imports almost to the nil during last three
months, it is reliably learnt.
In fact the thermal power generation is the major
consumer of fuel oil all and the country has to pay at least $one
billion per year on imports of fuel oil. Currently, the country has not
imported any amount of fuel oil for the last three months and if this
trend prevails, Pakistan would be saving the huge amount it has to spend
on import of fuel oil every year.
The emphasis of shifting the power generation area on
natural gas has started paying off as the KESC has managed to shift its
70 percent electricity generation towards gas-fired system. WAPDA on the
other hand produces about 65 percent of electricity through oil fired
system has also coming out of the oil consumption with more emphasis on
gas fired system.
On the refinery side, our refineries are gradually
increasing their capacity utilization and have touching new height. The
capacity utilization of refineries started increasing from 81.2 percent
in 2002, 83.3 in 2003, and 97.7 percent in the first quarter of the
financial 2003-04 which gives a picture about things in the refining
sector in the country.
A substantial increase has also been registered in
electricity generation which is mainly attributed to the induction of
new capacity in the Ghazi Brotha Hydel power project. This project has a
total planned generation capacity of 1450Megawatt (MW) of electricity
per annum. The first of five planned 290 MW turbo-generators began
commercial operations in August 2003, while another initiated trial
production at the same time. Electricity generation is expected to
witness further boosts as additional units become operational.
However, growth in production of indigenous crude oil
and coal has witnessed a decline in the early part of the current
financial year but it has started improving in the second half and there
are strong possibilities that more emphasis on hydro power and
development of Thal coal project, would greatly help in reducing
reliance on imports of POL products significantly in a couple of years.
Currently, the industrial use of coal as fuel is
rising in the country, yet most of the requirements are still being met
through imports due to inferior quality of domestic coal and absence of
coal processing technology. Recently, a team of over 225 Chinese
engineers and coal experts had arrived which is busy on the location of
Thar coal field to establishing two coal-based power plants of 300 MW
each. Under an agreement with Chinese, Chinese Corporation has agreed to
provide technical assistance for a coal processing plant which will be
using coal of inferior quality for gasification to use it as a fuel for
The increase in use of natural gas to reduce reliance
on oil imports has, however, raised a question to enhance the gas supply
and the development of available gas resources to ensure uninterrupted
supply to the gas consuming sectors. Although the increase in demand for
gas is not alarming, however, to meet the increasing demands in future,
the gas sector would have to work at an accelerated pace for the
development of the newly discovered gas reservoirs.
Pakistan has 21.6 trillion cubic feet (Tcf) of proven
gas reserves, and currently produces 0.7 Tcf of natural gas per year,
all of which is consumed domestically. Natural gas producers include
Pakistani state-owned companies Pakistan Petroleum Ltd. (PPL) and Oil
and Gas Development Corporation (OGDC), as well as Atlantic Richfield,
Lasmo Oil, OMV, and BHP. The largest currently productive fields are Sui,
with 650 million cubic feet per day (Mmcfd), Adhi and Kandkhot (120
Mmcfd), Mari, and Kandanwari. Pakistan's demand for natural gas is
expected to rise substantially in the next few years, with an increase
of roughly 50% by 2006, according to Pakistan's oil and gas ministry.
Pakistan also plans to make gas the "fuel of choice" for
future electric power generation projects. This will necessitate a sharp
rise in production of natural gas, and also has generated interest in
Pakistan in pipelines to facilitate imports from neighboring countries.
In this respect, a proposal to develop an energy ring
from Iran to Bhutan via Pakistan, India and Nepal was of special
interest of the participants of the recently concluded SAARC Summit.
It is reliably learnt that business quarters of
India, dealing in energy sector, are quite active to convince their
government to participant in the pipeline project from Iran. The
petroleum minister of Pakistan has, however, made it categorically clear
that weather India or any other countries join in the project or not,
Pakistan has a firm determination to go for the project.