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Pakistan: Depleting reserves; all eyes on imported gas to meet energy requirements

Pakistan: Depleting reserves; all eyes on imported gas to meet energy requirements thumbnail

Despite extensive drilling by oil and gas exploration and production companies that resulted in over 90 new discoveries in just three years, the much-talked about IP, TAPI and LNG projects are considered the thirst-quenching streams for the energy starved nation.

Now with the concerted efforts of the present government, the decades old projects – Iran-Pakistan (IP), Turkmenistan-Afghanistan- Pakistan-India (TAPI) gas pipelines and import of Liquefied Natural Gas (LNG) – are almost in practical phase. Last year has already seen LNG’s import, while work on TAPI began in December, 2015. Similarly, the IP project will hopefully commence this year after amendment in the gas sale-purchase agreement with Iran.

Critics believe it or not, there is light at the end of the tunnel as setting sun of 2017 will see end to this crippling legacy of the previous years when energy shortages started to hit the country slowly and steadily.

In Pakistan, the gas supply-demand gap has reached 4 billion cubic feet per day (BCFD) as total gas demand of the country is 8bcfd against total supply of 4bcfd. Needless to say, in winters, the demand rapidly increases.

“The country has no option other than to import gas whether it is LNG or through IP and TAPI pipeline projects as its existing reserves are depleting and there is no major find since long,”the Ministry of Petroleum and Natural Resources secretary said while addressing a seminar titled ‘Transparency in public sector: An appraisal’.

The present government, he said, was eyeing on imported gas besides accelerating local oil and gas exploration and production activities to meet the ever-growing energy needs in the country.

Commenting on IP project, official sources in the Ministry revealed that the government was in the process of negotiating amendments in the Gas Sale Purchase Agreement (GSPA) with Iran for early implementation of the much-delayed project, which was conceived in mid-1950s.

“A draft amendment has been shared with Iran, and it has agreed to negotiate on it along with some other amendments in the GSPA, following which construction work on the pipeline is expected to commence soon in collaboration with China,” the sources aware of the project updates said.

Sharing details of the project, the sources said Inter-Governmental Framework Declaration was signed between the two countries on May 24, 2009, while GSPA had been agreed on June 2009. Subsequently, Pakistan issued sovereign guarantee on May28, 2010. The project consultant was appointed on April 11, 2011,while the design, feasibility, route survey and other formalities ofthe project were completed on September 8, 2012.

The 56-inch diameter pipeline will start from South Pars gas field in Iran and end at Nawabshah, covering a distance of around 1,931 km with 1,150 km portion in Iran and 781 km in Pakistan. The 750mmcfd gas flow in the IP pipeline is projected to help generate around 4,000MW electricity along with creating job opportunities in backward areas of Balochistan and Sindh.

Commenting on TAPI project, the sources said Prime Minister Nawaz Sharif along with other regional leaders performed the groundbreaking of the (TAPI) gas pipeline project in Turkmenistan in December last. The groundbreaking ceremony took place near the city of Mary in the southeastern part of the central Asian country, close to the giant Galkynysh gas field which is meant to provide gas for  the 1,814-kilometre (1,127-mile) link.

The $10 billion pipeline, from Turkmenistan via Herat, Kandhar, Chaman, Quetta and DeraGazi Khan to Multan and onwards to India, is expected to be operational by 2019. A state-owned company of Turkmenistan is the consortium for the TAPI and overseeing coordination in the construction, financing, ownership and operation of the project.

As per the agreement, it was prerequisite for Pakistan, India and Afghanistan to have five per cent shares each in the project. Turkmengaz, leader of the consortium, would have 51 percent shares, with the rest marked for partner countries

It is pertinent to mention that Pakistan is already working on laying a 42-inch diameter 700-kilometer gas pipeline from Gwadar to Nawabshah, and a 1,122-kilometer north-south (Karchi- Lahore) gas pipeline that can be used for supply the both regassified LNG and imported gas under IP and TAPI.

On LNG import, the official sources said this year Pakistan signed a 15-year agreement with Qatar to import up to 3.75 million tonnes of LNG a year, which was being highly appreciated by the business community as the previous governments had been reluctant to take any practical step in this regard.

Daily Times

3 Comments on "Pakistan: Depleting reserves; all eyes on imported gas to meet energy requirements"

  1. Kenz300 on Mon, 2nd Jan 2017 10:36 am 

    Wind and solar are safer, cleaner and cheaper than expensive imports and provide energy security because it can be produced domestically.

    Wind And Solar Now Cheapest Unsubsidized Electricity Sources In The U.S. – First Solar, Inc. (NASDAQ:FSLR) | Seeking Alpha

  2. penury on Mon, 2nd Jan 2017 11:35 am 

    Whistling by the graveyard.The money does not exist to accomplish these projects. As the world economy tanks in the next ten years people need to re-learn the lessons of the past and forget about growing the economy and concentrating on survival, Humans have exceeded their upper boundries and are about to retract.

  3. rockman on Tue, 3rd Jan 2017 9:56 am 

    p – Exactly. Pakistan is trying to move into the imported energy trap the US and other countries have achieved. That’s a positive when those imports boost economic growth. But as many have learned when such economies stagnate those import requirements become more of a threat then a positive.

    So in that regards Kenz is correct. Unfortunately the bulk of the capex to be spent supplying energy to Pakistan isn’t being contributed by them but from the fossil fuel sellers. Sellers who see no benefit for Pakistan to develope sustainable energy resources.

    If the energy consumers won’t spend the capex for alt energy who will?

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