GAS SHORTAGE: A SOBERING ISSUE
Feb 6 - 12, 2012
An acute shortage of natural gas across the country owing to depleting gas reserves is one of the main issues in Pakistan. It is causing interrupted supply of gas to the domestic and industrial consumers and refueling stations.
The gap between supply and demand of gas has already touched 1,100 MMCFD (million cubic feet of gas per day) as winter is at its peak.
The shortfall is estimated to go up to 1.9 BCFD in the coming days on account of rising domestic demand because of falling temperature, compelling the Sui Northern Gas Pipeline Limited (SNGPL) to cut supplies to the general industry, fertilizers and textile industry.
The supplies to independent power producers (IPPs) have to be curtailed by 151 MMCFD to 305 MMCFD and CNG sector by 60 MMCFD to meet domestic demand of 1000MMCFD and commercial requirement of 80MMCFD. The government has added to the miseries of common persons by increasing gas tariff massively for all categories of consumers.
There are very staggering fallouts of this suspension and sporadic supply of gas to all walks of consumers.
1- The government has raised the national gas price by 14 per cent amid yawning energy shortfalls that have sparked recent protests nationwide. Sky rocketing price of electricity and gas would lead to massive inflation in the country.
Rapid increase in power and gas tariffs has multiplied the cost of doing business manifold and a number of small and medium sized units are at the verge of closure. These units include hosiery, textile, weaving, and engineering.
2- Textile sector is accusing the federal government for discrimination in gas distribution and they are raising their voice against suspension of gas supply to textile mills. They argue that the CNG stations are consuming 300 MMCFD and being provided gas without disruption with a scheduled load shedding. As a matter of fact, this uncontrolled suspension of gas supply to textile units in addition to the routine stoppage for 150 days every year would render several units unviable, risking them to suffer closure. These units had been hit hard by high interest rates and prolonged power outages across the country.
3- On the other hand, CNG associations are at loggerheads with SSGC for scheduled gas holidays for gas stations. They claim that they are consuming only seven per cent of the total gas supplied by the gas fields. Therefore, they cannot be held responsible for the collapse of the system.
They say that SNGPL has artificially created shortage of the gas by maintaining low pressure in its system and blamed the CNG sector for the shortage. At the time CNG vehicles were introduced in the local market, it was argued that it is an environment friendly and cheap fuel. But, the energy crunch is now forcing the government to discourage the use of CNG by making its price equivalent to petrol.
4- Gas load shedding and irregular supply has multiplied the miseries of housewives too who are unable to cook food and keep their houses warm. There have always been prolonged electricity outages, severe water scarcity but there has never been 16-18-hour-long gas load shedding daily.
Low pressure and unscheduled outages have disturbed everyday life badly. People are using compressors and transformers to pull gas with pressure from the pipelines.
1- No serious efforts have been made to revive the dormant gas fields or import energy to fill the supply gap. There is an urgent need to address the supply-side issues to remove growing gas shortages. The supply side issue has not been focused during the last four years and no fresh gas discovery made because Pakistan offered $2.54 return on exploration of fields against international rate of $14. Pakistan's import needs are less than the total internationally traded volume of gas in the form of LNG.
2- In addition to the riots over short-term gas shortages, the long-term availability of gas from Iran remains a distant possibility. Pakistan entered into an agreement with Iran to purchase gas on May 24, 2009. As per the deal, both sides agreed to lay pipelines up to their respective borders by 2014. It was learnt that Iran nearly completed its pipeline and by December 2014 could make gas available at Pakistan's border.
Pakistan, on the other hand, has not even started work on the approximately 700km long pipeline that is required to be constructed up to the Iranian border. Further, the UN Security Council imposed sanctions on Iran by passing Resolution 1929 on June 9, 2010. The UN resolution is being interpreted as prohibiting Pakistan from having financial or commercial transactions, including the gas pipeline, with Iran.
3- Pakistan's third largest gas producing field in Qadirpur has experienced unjustified delay in installation of 16 compression plants. If this plant shuts down, the country will have to shed about 690 MMCFD or over 20 per cent of current production. Therefore, it is unlikely that gas could be injected into the system due to back pressure of SNGPL pipeline as the reservoir pressure would have declined to 1000 psi - a stage when low pressure hampers gas production.
4- There exists a sheer incompetence and lack of efficiency at the gas utilities compounded by the government's lack of planning to augment supplies. People would have to switch over to alternative energy sources like liquefied natural gas (LNG).
Sui Northern and Sui Southern were also preparing a plan to provide thier consumers solar geysers and solar heaters.
According to the ADB, Pakistan's natural gas production is estimated to level off by 2011 and by 2030 more than 70 per cent of domestic demand for natural gas will have to be met through imports. As per a report on the energy outlook 2030, the Asian Development Bank (ADB) said to import natural gas several options are under consideration including import of liquefied natural gas (LNG) from Qatar and Australia. But, they are seriously delayed.
5- There are unexplored gas reserves at Kunar Peshaki near Hyderabad and at Kohlu spread over an area of 2500 square kilometers. But, Kohlu block (block 2968-3) is located in Kohlu and Dera Bugti districts. There are geopolitical and security concerns for proceeding with the exploration work.
The obvious solution lies in stepping up investment in gas exploration to enhance overall supply. But, each sector also needs to play its due role in addressing the overall problem by adopting measures to ensure sustainable supplies of gas countrywide. The situation has become very grim forcing all the stakeholders to develop new ways and employ renewable energy resources.