1 - 7, 2010

Natural gas (methane) is a mixture of hydrocarbon gases with some impurities that are the result of decomposed organic matter. Due to the variety of its constituents, it finds wide application either as an energy source or as feedstock to chemical and petrochemical industries. Methane is the major constituent of natural gas (95 to 98 %). As a feedstock it is first of all converted to synthesis gas (CO + H2) and then used to manufacture a gamut of intermediate chemicals and finished products such as ammonia, oxo-alcohols, chloromethane, methanol, fertilizers, etc. However, ethane is the most desirable feedstock for ethylene production when minimum amount of byproduct is desired.

Nigeria is endowed with abundant natural gas resources. The country's reserves of natural gas are estimated at 32 trillion cubic feet (TCF). Abundant natural resources are required for economic development. The feasible gas based industries enhance utilization of natural gas as raw material for the industrial development of the country. This also encourages the government to set up industries that could produce intermediate and finished products rather than importing liquefied natural gas (LNG) from the developed nations.


In the recent years, Pakistan has witnessed a sharp increase in the demand of natural gas. The consumption of natural gas during 2004 was about 1,050 billion cubic feet, close to the level of production but still not enough to meet the total demand, mainly that of industrial and power sectors.

The country produces natural gas to the level of 1,343 billion cubic feet annually, or 3,680 mmcfd (million cubic feet per day), which translates into 28.20 million metric tons of oil equivalent (TOE). The projected demand-supply position of natural gas indicates a deficit of 25 percent of total gas requirement by 2010, as additional gas from indigenous production in coming years will increase by 10 percent. Gas import pipeline projects are planned. Nonetheless, their implementation will take a much longer period, given the present conditions.

Power sector is major consumer of natural gas with over 40 percent share in total national consumption. A number of new independent power producer (IPP) projects have been sanctioned recently, based on natural gas as primary fuel, with cumulative capacity of about 1,600 megawatt. In total, about 600 mmcfd gas has been earmarked for these projects, initially until 2010-11.

Gas is not committed for these power projects on year-round basis and it is not made available during 2-3 months of winter season. The power plants use alternate or backup fuel for this period, depending on the technology applied for power generation. Generally, these are distillate (light) fuel oils, such as high-speed diesel (HSD), and residual (heavy) fuel oils, including low sulfur furnace oil (LSFO) and high sulfur furnace oil (HSFO).

In view of increasing cost of petroleum products globally and also Pakistan's persistent high import bill of oil, it is advisable to consider economical options. Petroleum naphtha, commonly known as naphtha, has the potential to be considered suitable in replacing the above liquid oil fuels, due to naphtha being indigenous and comparatively of lower price. A few of the IPPs are reported to be exploring the possibility of using naphtha as an alternate/backup oil fuel.

Naphtha is primarily used as feedstock in refineries and chemical/ petrochemical industries. The least expensive of oil fuels, it is used the world over for power generation, either as primary fuel or alternate fuel to natural gas. Leading manufacturers of gas turbines and diesel/gas engines have installed a number of simple cycle and combined cycle units using naphtha in many countries, including China and India.

With a total power generation capacity of 115,545 megawatt, India has the world's largest utilization of naphtha on gas turbines.

Current naphtha production in Pakistan, as a byproduct from the petroleum refineries, is around 833,000 tons per annum. The current production is enough to run at least six combined-cycle power plants of 100-mw capacity each roughly for a period of approximately two months when supply of natural gas would not be ensured.

Only at one refinery the naphtha production is converted into high-octane gasoline, whereas all other refineries export the low-valued commodity, earning annually an amount of $160 million at optimum market price.


Unfortunately, Pakistan's hydro-cracker/naphtha cracker project, originally approved in 1982, could not be set up. In 1990s a UAE- based company had joined hands with Pakistan to establish joint venture, but itlacked professionalism and required financial credibility. Hence the plan was shelved.

Naphtha, a colorless, volatile and inflammable liquid hydrocarbon mixture, is composed of different grades.

Petroleum naphtha, which is the unprocessed component in the production of petrol/motor gasoline, is intermediate distillate between the lighter gasoline and heavier benzene. It has a specific gravity of 0.76.

Transfer, transportation and storage of naphtha may pose problems. Its very low viscosity results in poor lubrication to metal surfaces, and therefore lubricity improvement additives are used for naphtha-fuelled power generation facilities. Naphtha requires special safety considerations for use in gas turbines and diesel/gas engines. Its high volatility can cause fire explosions, as in case of other liquid fuels.


A petrochemical is any chemical compound obtained from petroleum or natural gas or derived from petroleum or natural gas hydrocarbons and utilized in chemical markets. The definition has been broadened to include the whole range of aliphatic, aromatic, and naphthenic organic chemicals as well as carbon black and such inorganic materials as sulphur and ammonia. In many instances, a specific chemical included in the petrochemicals may also be obtained from other sources such as coal, coke, or vegetable products.

Petrochemical products include such items as plastics, soaps, and detergents, solvents, drugs, fertilizers, pesticides, explosives, synthetic fibers and rubbers, paints, epoxy resins, and flooring and insulating materials. Petrochemicals are found in products as diverse as aspirin, luggage, boats, automobiles, aircraft, polyester clothes, and recording discs and tapes.

Natural gas and crude oil are referred collectively as petroleum. Crude oil is merely the heavier constituent that naturally occurs in liquid form while natural gas refers to the lighter constituents of petroleum that naturally occur in gaseous form on its own as free gas, or in association with crude oil.

Natural gas has been used commercially as a fuel for 180 years in the America and for centuries in China. The production, processing, and distribution of natural gas have become an important segment of any economy and a major factor in the world markets.


The country's dependence on imported energy products has risen by 5% in the last four fiscal years because of growing demand of fuels by power plants and transport sector. The Pakistan Energy Year Book FY08, released by Hydrocarbon Development Institute of Pakistan, showed that the share of imported energy had increased to 35% in FY08 against 30% in FY04. This is mainly due to higher import of refinery petroleum products, crude oil, and liquefied petroleum gas (LPG) for meeting the local demands of various sectors.

During last four fiscal years (FY04-08), the energy consumption grew 8% compound annual growth rate, whereas energy supplies have increased 5% with significant shift in energy supply mix from gas to oil. According to the report, the energy consumption of the country stood at 39.4 million tones with the distribution in percentage: gas 40.3%, oil 29.3%, electricity 15.2%, coal 13.7%, and LPG 1.5%.

The oil contribution doubled during the last four years with consumption reaching 44.7 percent. In FY04, the gas share in thermal power generation was 77.5 percent, whereas oil had a share of 21.9 percent. Owing to the rising gas shortage, gas supply to power plants declined annually by 3 percent during the said period. Besides these factors, phenomenal increase in CNG consumption (43 percent CAGR) during this period also reduced gas supplies to power sector. In term of fuel mix, gas remains the primary contributor to thermal power generation with consumption of 8.5 million tones (54.9% share).

The report said the country's primary energy supplies posted 23.8 percent growth in FY08 and stood at 62.9 million tones verses 50.8 million tones in FY04. In FY04 FY08, the average growth of supplies stood at 5 percent with 3.8 percent growth posted in FY07, 9.31 percent in FY05, and 8.06 percent in FY04.


. FY 08 FY07


Oil 19.2 30.50% 18.1 29.90%
Gas 29.9 47.50% 29.3 48.40%
LPG 0.4 0.70% 0.5 0.80%
Coal 5.8 9.20% 4.4 7.30%
Hydro Power 6.9 10.90% 7.7 12.60%
Nuclear Power 0.7 1.20% 0.5 0.90%
Total 62.9 100.00% 60.6 100.00%

Industrial sector maintained and will maintain its dominant position throughout the historical and projected period with a share of 47% followed by transport 26%, residential and commercial 24%, agriculture 2% and government 1%.


2007-08 63.67 44.60 19.07
2008-09 66.43 47.74 18.69
2009-10 69.06 49.14 19.92
2010-11 71.88 51.71 20.17
2011-12 75.12 50.86 24.26
2012-13 79.12 54.19 24.93
2013-14 82.43 52.57 29.86
2014-15 86.37 50.26 36.11
2015-16 90.05 47.70 42.35
2016-17 93.56 45.50 48.06
2017-18 97.52 45.46 52.06
2018-19 101.62 44.05 57.57
2019-20 106.22 43.28 62.94
2020-21 110.82 41.67 69.15
2021-22 115.95 43.83 72.12

Developed countries consume natural gas for only petrochemical industries. Gulf Cooperation Council (GCC) countries also consume it for petrochemical industries.

Natural gas/coal/biomass along with steam in the gasification unit further split into Fischer Tropsch produces diesel and from methanol to gasoline.


The impurities in natural gas also include water and heavier hydrocarbons. When raw natural gas is withdrawn from the underground reservoirs to supply energy demands, these impurities are considered objectionable and are usually removed by various processing schemes. The hydrocarbon gases normally found in natural gas are methane, ethane, propane, butanes, pentanes, and small amounts of hexanes, heptanes, octane, and the heavier gases.

Usually the propane and heavier fractions are removed for additional processing because of their high market value as gasoline-blending stock and chemical plant raw feedstock. What usually reaches the transmission line for sale as natural gas is mostly mixture of methane and ethane with some small percentage of propane.

All the fossil fuels (coal, petroleum, and natural gas) release pollutants into the atmosphere when burned to provide energy. However, NG is the most environmentally friendly fossil fuel. It is cleaner burning than coal or petroleum since it contains less carbon than its fossil fuel cousins. NG has less sulphur (S) and nitrogen (N2) compounds and, when it's burned, it emits less ash particulates into the air than coal or petroleum fuels.

NG is much lower in emitting carbon relative to other fossil fuels. NG is an extremely important energy for reducing pollution and maintaining a clean and healthy environment, in addition to being an abundant and secure energy source.

Combustion coal and oil release elevates levels of harmful emissions, including a higher carbon emission ratio, nitrogen oxides (NOx) and sulphur dioxide (SO2). Coal and fuel oil also release ash particles into the environment. These substances do not burn, are carried into the atmosphere and contribute to pollution. NG combustion releases smaller amounts of SO2 and NOx, virtually no ash or particulate matter, and lower levels of CO, CO2 and other reactive hydrocarbons.

Global reserves of petroleum products will remain for 90 years. Therefore, we have to switch to alternative fuels.

Natural gas consumption has steadily increased during the last three decades. Until now, natural gas could only be used where the corresponding industrial infrastructure is available or where the distance to the consumer could be bridged by means of pipelines. In the meantime, gas transportation over the great distances from the source of supply to the most important consumption areas can be overcome by liquefaction of natural gas (LNG) and the transportation in specially built ship as is done for example in Japan, which imports LNG in bulk. In the future, natural gas could possibly be transported by first converting it into methanol - via synthesis gas - necessitating of course additional expenditure. From natural gas synthesis we can produce various petrochemical and other related chemicals including diesel and gasoline.