S.KAMAL HAYDER KAZMI,
Research Analyst, PAGE
July 25 - 31, 2011
Natural gas is one of the principle sources of energy for many of our day-to-day needs and activities.
Natural gas will have a major share in the world's energy basket through 2030. Affordable and abundant, natural gas can help provide the energy needed for economic and social progress and because it burns cleaner than oil and much cleaner than coal, natural gas is a powerful tool for reducing the environmental impact of energy use.
It is not surprising, then, that the natural gas industry generates a great deal of commerce in Pakistan and worldwide. The natural gas is an extremely important segment of the Pakistan's economy. Furthermore, the sectoral consumption of gas in the country indicates that the commercial, cement, fertilizer, power and industrial sectors have experienced decline in consumption of gas during July-March 2010-11 against the same period of preceding year. Only two sectors, household and transport, posted positive growth in gas consumption.
Gas consumption in the transport sector increased 14.3 per cent, mainly due to a shift from imported fuel oil to relatively cheaper source of gas during July-March 2010-11 followed by the household sector with almost negligible growth rate of 0.75 per cent. The cement sector showed major decline of 64.7 per cent mainly because of the fact that the cement sector almost switched over to coal fire system for its production activities.
Gas consumption in industrial, commercial and fertilizer sectors declined 9.2, five and 2.7 per cent, respectively during first nine months of the last fiscal year. The power sector consumption decreased marginally by 0.2 per cent during the period under review.
Pakistan's domestic gas production is expected to fall from the current four billion cubic feet per day (cfd) to two billion cfd by 2020. Demand, on the other hand, is expected to soar to eight billion cfd by that time, creating a six billion cfd shortfall. If all projects to supply gas to Pakistan are completed on time, there would still be a gas shortfall of two billion cfd by 2020.
Under the Iran-Pakistan pipeline agreement, Pakistan will be able to import 750 million cfd from Iran's gas field. The Turkmenistan-Afghanistan-Pakistan (TAP) pipeline, which is subject to extreme political risk due to the war in Afghanistan, is expected to yield another 1.3 billion cfd.
The government is encouraging LNG import by the private sector. Accordingly, Pakistan Mashal LNG Project (PMLP) was conceived to cater for the energy need of the country as envisioned in the 25 year National Energy Security Plan. PMLP is to be set up on integrated basis whereby a private sector project developer will manage the entire supply chain including procurement and shipping of 3.5 million tons per annum LNG, construction and operation of an onshore LNG receiving terminal, and delivery of 500 mmcfd regasified LNG to the SSGC's system in Karachi.
The off-shore LNG terminal marks an end to the controversial onshore LNG gas import project, known as 'Mashal LNG', a project that was awarded to a company called 4Gas, but was struck down by the Supreme Court.
The government is expected to begin the search for an appropriate site for the off-shore platform within a 22 nautical mile radius off the coast. The offshore LNG import project is the quickest and the cheapest option compared to onshore and floating LNG imports projects.
The government by enhancing the use of Liquefied Petroleum Gas (LPG) is to stop deforestation in the areas where the supply of natural gas is technically not viable. As a result of the government's policies, LPG supplies have been increasing over the past few years, and contribute about 0.6 per cent of the country's total primary energy supply mix. The LPG marketing companies imported around 55826.4 MT of LPG during July- March 2010-11 against 406975 MT of LPG during July-March 2009-10.
In an effort to reduce reliance on expensive imported fuels as well as to improve the environment, the use of Compressed Natural Gas (CNG) in vehicles has been encouraged. Currently, Pakistan is the largest CNG using country. Due to existing price differential between CNG and petrol, consumers prefer to convert their petrol vehicles to CNG. Presently, there are 3,329 CNG stations operating throughout the country. By March 2011, about 2.5 million vehicles have been converted to CNG.
In addition, the governments' policy of de-dieselization is being actively pursued by the provincial governments, as this policy is being implemented by them to achieve import substitution. For instance, the diesel operated intra-city urban public transport is being phased out in Karachi, Hyderabad, Lahore Faisalabad, Peshawar, Quetta and Islamabad/ Rawalpindi.
Pakistan discovered its largest and the world's 7th largest treasure of natural gas field at Sui, Balochistan areas. Presently, two and three days shutdown of CNG stations in a week is a befitting example of failure of the policymakers of this country. The energy crisis has affected our transport so badly and dozens of factories have been shut down which is resulting in ever growing unemployment rate. The policymakers should take initiatives to overcome the gas shortages and manage the gas resources of the country properly.
FINAL ENERGY CONSUMPTION BY SOURCE (%)