GAS SHORTAGE HITS HARD INDUSTRY
Jan 11 - 17, 2010
The country is facing severe gas shortage at present which is hitting hard to the industry particularly textile sector that has a share of about 60 percent in the country's total exports.
The country is currently producing 64,000 barrel of oil per day, while the production of gas stands at 3.9 MMcfd. Not only industrial sector but household and CNG-fitted vehicles are also facing difficulties due to non-availability of gas.
Pakistan has huge oil and gas resources, but unfortunately these are not yet tapped. Special emphasis needs to be laid on to explore the resources.
Pakistan has the worldís highest number of CNG vehicles. According to International Association of Natural Gas Vehicles as of December 2008 Pakistan has the worldís highest number of vehicles running on compressed natural gas (CNG). The number is over 2 million.
Pakistan also has the Worldís highest number of CNG re-fuelling stations i.e. 2941 as of July 29, 2009. This number is phenomenal noting that CNG as a fuel was made available in Pakistan only in 1992.
The main reason is because gasoline (petrol) prices in Pakistan are one of the highest in the region. The use of CNG in vehicles brings an added blessing that it is much less polluting than regular gasoline. In Pakistan, car companies are now offering factory-fitted CNG vehicles.
These vehicles are sold against a premium of minimal Rs30,000 (US$ 375). With Pakistan going rapidly ahead with making CNG as the primary fuel source for transport, one concern is that Pakistan's natural gas reserves are depleting faster than ever before.
Industrialists and industrial workers have come to streets against gas shortage. Due to shortage of gas, the industry is suffering a lot. The gas load shedding forced the industrialists and industrial workers of Lahore's Township Industrial area to come to streets to protest against massive gas and electricity outages.
Chairman Lahore Township Industrial Association, Zaheer Bhutta said that gas and electricity outages were not only hitting the overall economy but also putting jobs of thousands of industrial workers at stake.
He lamented that industrial units of Lahore Township industrial area were on the verge of closure but government did not bother to take a single step to improve the situation. He said industrialists and industrial workers want to play their vital role to strengthen the economy but it was government which forced them to stage protest.
According to him, non-availability of electricity and gas has destroyed the industrial base but the government is playing the role of silent spectator. The industrial area, which was the hub of production, was presenting a deserted look as a large number of industrial units had stopped production.
He said that country was already facing multiple crises and economic crisis would further deepen in coming days as industry had failed to fulfill existing export orders, what to talk of any fresh orders.
Policy on gas supply to industry is to be announced soon. Prime Minister's Advisor on Textile Mirza Ikhtiar Baig had to face difficult situation during his visit to the Lahore Chamber when businessmen expressed serious reservations over non-availability of gas to the industrial sector. Baig told the businessmen that trade associations and business community should exert pressure on the concerned departments for the implementation of power and gas load-management plans as per approval accorded by the federal cabinet.
The angry businessmen were of the view gas load shedding was resorted to in violation of gas load-management plan. The Prime Minister's Advisor said that threadbare deliberations were on to tackle the issues regarding shortage of gas to the textile sector and a comprehensive policy would be announced soon. He said that the policy would be unbiased and all industrial sectors would get equal benefit of it and all sectors would be politically protected.
He said that the federal cabinet had decided that Sui Southern should give 100 MMcfd gas to Sui Northern but unfortunately the decision was still pending for want of implementation.
Petroleum Policy announced by the government focuses on accelerating the oil and gas exploration and production activities, besides making the country self sufficient in this vital sector within four years. This new, but quite ambitious policy targets tapping the natural resources to ensure energy security and fulfills the future requirement of the country.
Under the new policy, exploration work would be launched on over 250 blocks out of 350 to discover oil and gas, and for this purpose up to 100 new licenses would be issued. Main thrust of the policy is to meet the challenges of the ever increasing energy demands, encouraging foreign direct investments and also promoting local participation in the sector. The policy involves incentives for the local and foreign investors to make the country self sufficient in this sector within next fours years. It also features efforts to utilise the experience of foreign companies to explore more oil and gas by working on maximum explorations.
Under the new policy, the investors would be offered higher prices up to four dollars per barrel as their share in exploration of crude oil to attract more investment in this sector. Stringent criterion for prequalification of the exploration and production companies has been simplified.
Besides, the discount during extended well test phase has also been reduced from 15 % to 10 % to encourage the companies for early production. The government would encourage the local investment in to the energy sector and the investors would be required to enter into agreements with the foreign companies or engage a high caliber technical and management team capable to exploit hydrocarbon resources to its full potential.
Under the policy, the country would also invest in other countries in oil and gas sector. Pakistan Petroleum Limited has entered into a joint venture with a Yemeni company for undertaking work in Yemen at an estimated cost of US $ 17.5 million. The government would encourage the setting up of second-hand refineries in the coastal areas of Balochistan with tax holiday of seven and half years.
Many foreign investors are keen to invest in oil and gas sector while a leading Australian firm SMEC International has joined hands with Clough Engineering and Integrated Solutions (CEIS) to enhance its activities in the exploration of oil and gas in Pakistan.
CEIS as subsidiary of Clough has been providing engineering services successfully to clients like British Petroleum, BHP Billiton, OMV, Petronas, Pakistan Petroleum, China Petroleum, Tethyan Copper Company and many other reputed companies.
Clough delivered multimillion dollar engineering, procurement & construction contractor (EPCC) projects like Dhodak LPG Extraction Plant, Uch Gas Transport Pipeline for OGDCL, Sawan Gas Field Development Project for OMV and for the last few years providing state-of-the-art engineering and design services to its clients primarily dealing in production of oil & gas.