The huge potential of energy resources undiscovered

Feb 07 - 13, 2005

A geological survey suggests that Balochistan province has a rich energy potential as Arab peninsula and North Sea. This potential nevertheless remained untapped for unexplained reasons. Being strategically located, this province offered second attraction as a pass for regional gas pipelines but a series of violent attacks on the energy infrastructure in Pakistan's strategic southwest could have a major backlash on various multi-billion-gas pipeline projects.

Pakistan sent more than 1,000 troops to the country's largest gasfield in poverty-stricken Balochistan province and closed the main plant there after a series of clashes with tribesmen left eight people dead. Violence erupted at the state-run Sui gas facility, which the tribesmen who have long campaigned for more royalties and jobs from the plant said followed the alleged gang rape of a woman doctor. "This is something of concern to everybody," Asian Development Bank (ADB) country chief Marshuk Ali Shah said, as the tribe's chieftain predicted a major military assault.

The resource-rich province is a potential staging point for a number of gas pipeline projects, which have been proposed to satisfy the demands of energy-hungry South Asia.

One would carry gas from Iran to India while another parallel proposal would go from Turkmenistan via Afghanistan to Pakistan and then possibly to India again. But dissatisfaction is ripening among ethnic Baloch tribes, who blame Islamabad of purposely depriving them of the economic benefits from the natural gas and political rights they say they are guaranteed by the constitution.


After discovery of the largest-ever gas reservoir in 1950s, which prompted the authorities to plan and lay one of the largest gas transmission and distribution network in Balochistan province, the home of very gas deposits remained the least beneficiary of all. Hostilities among the tribal, hydrocarbon exploration companies as well as the central government were looming large ever since the realization of deprivation strongly gripped the locals.


A top US diplomat told an energy conference in Quetta that Balochistan province carries unproven gas reservoir of 200 trillion cubic feet of gas. How big these reserves are could be gauged with its simple comparison with Sui reserves, which estimated gas amounts at 8.9 trillion cubic feet and still did not last, despite ruthless consumption for past 40 years.

Tribal chieftains may have their writ in the vast stretches and plateaus of the province. But should not the government have strongest writ in the province, the case has been otherwise. It is on record that the governments in the past had approved payment of ransom to the tribal and at a stage it was planning to institutionalize ransom so that it could be kept on financial books.

Why the difficult gas pipeline projects attracted Pakistani planners instead of taping the local energy potential which would have entailed development squarely. But the procrastination on the part of authorities not only left a huge potential of energy resources undiscovered but making the chances of mega gas pipeline projects blur.

Now low-level uprising has been brewing for years in the region with similar attacks. "These projects are of no good for us, they are only a source of earning money (for Islamabad) by selling gas to India," said influential Sardar Akbar Bugti.

Energy industry representatives say that Pakistan will suffer if it cannot show that it is capable of policing its own power and natural resources infrastructure.

"This is very bad. It is not in the interests of Pakistan and would have very bad impacts on foreign investment," said Pakistan Exploration and Production Companies Association spokesman Jameel Hasan.

Of the association's 22 members, 16 are foreign hydrocarbon companies working in Pakistan's energy sector. The proposed projects are aimed at making up an imminent domestic natural gas shortfall, as well as supplying the future needs of Pakistan's political rival India, which is one of the largest consumers in Asia.

Pakistan's shortfall by 2010 is estimated at 0.2 billion cubic feet per day, going up to 1.4 billion by 2015 and 2.7 billion by 2020. India would face a deficit of 140 billion cubic meters of gas in the year 2020, which accounts for 13 percent of its energy needs, energy sector data shows.

But the tribal rebels claim they can scupper the projects if their demands are not met. "These projects can not be built without our goodwill and approval," Bugti said, expressing anger at the deployment of thousands of troops along with gunship helicopters in his territory.


"This kind of statement would make any investor think twice before coming Pakistan," Jameel Hasan said, adding: "Foreign investors would shy away."

Project sponsors could propose changes in the routes of the pipeline but higher security measures would also be required. "Watertight security is needed for the proposed project to the satisfaction of all stakeholders," the ADB's Shah said.

The ADB has provided one million dollars financing for several studies on the Turkmenistan-Afghanistan-Pakistan gas pipeline project, which may cost up to 2.5 billion dollars.

Shah suggested there could be a political solution. "For the security of the projects, all the stakeholders, including Balochs, should be involved and a political solution be sought," Shah advised. But Pakistani officials said they were confident about the future of the pipeline plans.

"Such incidents will not impede the gas pipeline projects as they will be resolved amicably by the government soon," Ministry of Petroleum and Natural Resources spokesman Shaukat Hayat Durrani said. "Deliberations are ongoing about the different aspects of the projects and multi-pronged progress is being made on all the available options," he said.