NATIONAL ENERGY PLAN
Serious imbalance in Pakistan's energy mix
By AMANULLAH BASHAR
May 09 - 15, 2005
There was a serious imbalance in Pakistan's energy mix which highlights a major dependence on gas at over 50% today, compared to 43% five years ago. The current pattern of energy utilization is likely to be the case in the foreseeable future.
Unlike Pakistan, the energy mix in developed markets like the UK, USA and Canada was much more balanced. The government in Pakistan was, however, keen to utilize coal as well as nuclear and other fuel options for balancing the sharp tilt towards natural gas.
This was pointed out by Munawar Baseer Ahmad, Managing Director SSGC at a seminar organized by Pakistan Institute of Petroleum (PIP) to review Pakistan's National Energy Plan that has been developed by a team of oil & gas industry experts, mandated by OCAC (Oil Companies Advisory Committee) & PIP. ENAR Petrotech served as consultants on the project.
Speaking about the way forward for Pakistan in the context of energy planning for economic growth, he also presented a regional energy overview to discern the energy consumption pattern in Pakistan and rest of the countries in the region.
Munawar Baseer pointed out how Pakistan's per capita consumption of energy at 14MBTU fared poorly in comparison with regional markets, and the developed world. Although India and Pakistan were in a similar state, Malaysia consumes more than twice the energy, China five times and the UK more than 12 times. He pointed out that even the energy utilization in Pakistan was much less efficient at 31MBTU, than the world average of 13MBTU.
Dwelling on the world oil & gas reserves versus production, he pointed out that huge reserves of gas were known to exist in the Middle East, in Qatar and Iran, in close proximity to Pakistan. As a country, however, Russia held the largest reserves and produced the most gas.
He discussed the key aspects of Pakistan's integrated energy plan and the importance of human resource development, R&D, environmental conservation and control of emissions to meet the Kyoto protocol, the need to focus on renewable energy, phased increase in nuclear power and social objectives such as rural development and job creation.
Explaining the objectives of SSGC's LNG import project he stated that a strategic alternative import channel for gas was essential for providing energy security at the right prices i.e. lower than HSFO and in volumes that could meet market needs. He said at least 300 mmcfd natural gas was required to meet the growing needs of IPP's, KESC, WAPDA and new industrial projects such as steel mills, textile city, cement and fertilizer plants in Karachi alone.
He emphasized that the proposed regional pipeline projects linked with Qatar, Iran and Turkmenistan were an essential component of Pakistan's long-term energy plan, but LNG was indispensable for meeting the short to medium-term needs of the country. He closed his presentation on the vision that given the right policy support and direction Pakistan could become the regional energy hub for LNG, and invited all OCAC/PIP members to come together to ensure Pakistan's energy security, sovereignty and sustainability.
The seminar was addressed by oil & gas industry experts who covered historical evaluation of Pakistan's supply and demand of energy resources and options for the future within the framework of regional and global developments.
Sajid Pervaiz, GM Corporate & Business Development, ENAR Petrotech explained to the audience, the methodology used in preparing the energy demand and supply forecast over a fifteen-year period, from 2005 to 2020. He explained how demand was calculated at primary and secondary levels and on a sector-wise basis. He also explained the use of econometric models, correlating them with relevant micro and macro-economic variables.
Saleem Piracha, GM Business Strategy for Shell Pakistan Ltd. presented an analysis of forecast of demand in terms of direct energy, energy for power generation and the resultant feedstock and losses status. He also pointed out that power plants were, by far, the largest sector consuming energy today, and the scenario was unlikely to change in the foreseeable future. Piracha went over the expected fuel-wise demand pattern for the key sectors i.e. residential, commercial, industrial, agriculture and transportation. He also reviewed the estimates for total energy demand, based on moderate as well as optimistic growth scenarios.
Shaukat Channah, Commercial Manager, ENI Pakistan Ltd. spoke at length on the development of oil & gas resources in Pakistan. He also identified the gaps between energy supply at 60 MTOE and demand at 93 MTOE forecast for the year 2020. He stressed the need to accelerate development of oil & gas exploration and enhance production, partly through utilization of indigenous energy sources and partly by pursuing other secure and viable options. He dwelled on the key drivers of E&P business, and factors that would encourage investments in the area.
Channa also stated that government ministries and agencies need to expedite the approvals process and also emphasized that a pipeline investment policy was urgently required. He also talked at some length on the importance of accessibility, law and order, sovereign guarantees in case of the post-privatization scenario for gas, incentives and infrastructure requirements for exploration and production of oil & gas.
The new Chairman of PIP, Shahid Hak, MD PARCO closed the session pointing out the need for developing Pakistan's human capital, in specific trades and areas of specialization within oil & gas. He emphasized the need to hold such seminars more often in order to create greater awareness and for using them to provide technical guidelines to policy-makers in the government.