Feb 6 - 12, 20

In the absence of proper natural resources management, Pakistan is facing worst energy crisis. Even after 64 years of independence, infrastructure and production facilities have not been improved.

Pakistan's two main gas supplying companies Sui Northern Gas Private Limited (SNGPL) and Southern Sui Gas Limited (SSGL) are struggling to meet its financial demands. The reason for this consistent financial disarray is considered to be gas theft from the pipelines and inability to find the loopholes in their governing systems.

Pakistan is already looking to add to its current electricity sources by importing more gas from Iran.

The government has ordered the OGRA (Oil and Gas Regulatory Authority) to import gas from Iran to meet the challenges of demanding winter season. The general public and manufacturing industries are suffering from either high electricity prices or continuous load shedding.

According to the Federal Petroleum and Natural Resources Minister, Dr Asim Hussain, gas shortfall in the country will subside by the end of 2013.

A total of 2.6 billion cubic feet of gas will be pumped up into the system; the promised increase will include 1,058 million cubic feet per day of gas produced locally and over 1.5 bcf of imported gas from projects, which are yet to be materialized.

He said the government would give a plan of action for five and ten years for energy production. According to him, current projects under development in Sindh and Balochistan will contribute over 1,058 mmcfd in the next two years. He expects another one bcf from Iran over the next year besides LNG import of 500 mmcfd.

Analysts believe that Pakistan will experience its worst gas crisis in 2016 when shortfall is expected to hit 3.021 Bcf/d with no big discoveries in sight, and the country will become increasingly dependent on imports to meet its energy demand.

According to them, the supply-demand position of the natural gas has deteriorated significantly and shortages of the commodity with reference to indigenous supply are projected to increase to 3.021 Bcf/d by the year ending on June 30, 2016.

Supply rationing of natural gas is inevitable in the near future and meaningful steps must be taken to curtail residential consumption, while prioritising supply to the fertiliser and power sectors, they said.

The net demand in fiscal 2011/12 (July-June) would be around 5.497 Bcf/d and will expand to around 6.354 Bcf/d by 2015/16, with gas shortfall estimated to expand from 2.458 Bcf/d in 2011/12 to 3.021 Bcf/d in 2015/16.

"Nearly half of this deficit may be bridged by imports, if arrangements presently under consideration are implemented as scheduled," they said, adding that if the ongoing projects to import natural gas gets delayed, the shortages will considerably worsen.

Pakistan recently issued licenses to construct three LNG terminals near Port Qasim by the third quarter of 2012 to bring in LNG equivalent to around 1.5 Bcf/d of gas.

Meanwhile, the country has also signed an agreement with Iran for the import of 700,000 Mcf/d of piped gas, but this depends on the construction of the Iran-Pakistan-India pipeline.

Imports from Iran could be a setback if the pipeline construction within Pakistan's border does not proceed as scheduled, due either to a deteriorating security situation in Balochistan, neighboring Iranian borders, or delays in securing financing, they said.

At the end of fiscal 2010/11, Pakistan was producing natural gas from 98 fields, of which nine fields accounted for 80 percent of the total daily supply.

The reserve base has not witnessed significant expansion and by 2010/11, 49 percent of the original recoverable reserves of 54Tcf had been exhausted, the report said.

Pakistan Textile Exporters Association (PTEA) Chairman Rana Arif Tauseef has demanded of the government to pace up its efforts to overcome gas crisis and ensure uninterrupted gas supply to the industrial sector.

He said that textile industry was on the course of a total collapse due to gas and electricity load shedding in Punjab. He said that the industry in Punjab had remained totally closed for the last 35 days as the SNGPL authorities had resorted to load shedding for indefinite period.

This outage has resulted in decline of textile exports by 159.5 million dollars in October and 193.9 million dollars in November and 225 million dollars in December last year.

Expressing disappointment over declining trend in textile exports, Rana Arif said that textile sector was the backbone of national economy as it had direct contribution to domestic production and foreign exchange earnings.

Gas shortages together with electricity load shedding have created immense problems for the industries, and cast negative impacts on the production process as well and export of value added textiles, he added.

The PTEA Chairman urged the government to accelerate its efforts to overcome gas crisis.