Thursday, July 11, 2013

Energy-Rich Pakistan Can End IMF Bailouts and Power Blackouts

Frequent IMF bailouts and power blackouts in energy-rich Pakistan are closely tied. One of the key reasons for recurring balance-of-payment crises is the country's rapidly rising oil import bill. The lack of sufficient fuel exacerbates load shedding, negatively impacts economy, reduces tax revenue growth and worsens current account and budget deficits. This requires repeated injections of IMF loans in US dollars to meet import requirements and deal with budget shortfalls.

Pakistan Energy Infrastructure (Source: PPEPCA)


Pakistan's Untapped Energy Riches:

1. Shale Oil:

A recent US EIA report released in June 2013 estimates Pakistan's total shale oil  reserves at 227 billion barrels of which 9.1 billion barrels are technically recoverable with today's technology. In fact, US EIA (Energy Information Administration) puts Pakistan among the top ten countries by recoverable shale oil reserves. These include Russia (75 billion barrels), United States (58 billion barrels), China (32 billion barrels), Argentina (27 billion barrels), Libya (26 billion barrels), Venezuela (13 billion barrels), Mexico (13 billion barrels), Pakistan (9.1 billion barrels), Canada (8.8 billion barrels) and Indonesia (7.9 billion barrels).

2. Shale Gas:

The latest US EIA report has raised estimates of Pakistan's recoverable shale gas reserves from 51 trillion cubic feet to 105 trillion cubic feet. It says Pakistan has 586 trillion cubic feet of shale gas of which 105 trillion cubic feet (up from 51 trillion cubic feet reported in 2011) is technically recoverable with current technology.

3. Tight Gas:

Rough estimates indicate the presence of at least 33 trillion cubic feet of unconventional gas reserves trapped in tight sands, according to an ENI Pakistan report. Another report by Shahab Alam, technical director of Pakistan Petroleum Concessions, puts the estimate at 40 trillion cubic feet of tight gas reserves in the country. These unconventional gas reserves are in addition to the remaining conventional proven gas reserves of over 30 trillion cubic feet.

4. Conventional Gas:

In addition to unconventional oil and gas resources, Pakistan also has about 30 trillion cubic feet of remaining conventional natural gas.

5. Thar Coal:

Pakistan's coal reserves in the Thar desert are estimated at 175 billion tons, according to  Geological Survey of Pakistan. It's low BTU content coal.  The carbon content of Thar lignite is around 60-80%; the rest is composed of water, air, hydrogen, and sulfur. It's hard to transport it but it can used to generate electricity in an integrated mining-generation facility.

6. Hydro:

Pakistan's hydroelectric potential is over 100,000 MW of electricity of which 59,000 MW can come from currently identified sites by the nation's Water and Power Development Authority (WAPDA).

7. Wind:

According to data published by Miriam Katz of Environmental Peace Review, Pakistan is fortunate to have something many other countries do not, which are high wind speeds near major centers. Near Islamabad, the wind speed is anywhere from 6.2 to 7.4 meters per second (between 13.8 and 16.5 miles per hour). Near Karachi, the range is between 6.2 and 6.9 (between 13.8 and 15.4 miles per hour). In only the Balochistan and Sindh provinces, sufficient wind exists to power every coastal village in the country. There also exists a corridor between Gharo and Keti Bandar that alone could produce between 40,000 and 50,000 megawatts of electricity, says Ms. Katz who has studied and written about alternative energy potential in South Asia.

8. Solar:

Pakistan is an exceptionally sunny country. If 0.25% of Balochistan was covered with solar panels with an efficiency of 20%, enough electricity would be generated to cover all of Pakistani demand. Solar energy makes much sense for Pakistan for several reasons: firstly, very large population lives in 50,000 villages that are very far away from the national grid, according to a report by the Solar Energy Research Center (SERC). Connecting these villages to the national grid would be very costly, thus giving each house a solar panel would be cost efficient and would empower people both economically and socially.

Summary:

Pakistan's frequent bailouts and blackouts are clearly related. The key to solving these interlinked crises is to put high priority on developing the country's vast but untapped domestic energy resources identified above. These include shale oil, shale gas, tight gas, Thar coal, hydro and renewables like solar and wind. Reducing Pakistan's dependence on energy imports is also the key to making the nation less vulnerable to recurring external shocks from energy prices which vary wildly with international political and economic events and crises.

Related Links:

Haq's Musings

US EIA Estimates Pakistan's Shale Oil Reserves at 9.1 Billion Barrels

Pakistan's Vast Shale Gas Reserves

Pakistan's Energy History

Cheap Coal Electricity

Potential Renewable Energy Resources in Pakistan

Hydroelectricity Potential in Pakistan

US EIA Shale Oil and Gas Report 2013


12 comments:

Riaz Haq said...

Here are a couple of news items on Pakistani imports in 2012-13:

Dawn:

Statistics showed the oil import bill reached $13.937 billion in July-May this year as against $10.467 billion over the last year, indicating an increase of 33.15 per cent.

http://beta.dawn.com/news/728216/import-bill-increases

Daily Times:

The country has suffered $20.432 billion trade deficit during last fiscal year 2012-13, according to the official figures released by Pakistan Bureau of Statistics on Friday.

July to June: The exports from Pakistan during last 12 months of the last fiscal year 2012-13 were recorded at $24.518 billion as compared with exports of $23.624 billion in the same period of previous fiscal year 2011-12, projecting an increase of 3.76 percent.


http://www.dailytimes.com.pk/default.asp?page=2013%5C07%5C13%5Cstory_13-7-2013_pg5_1

Riaz Haq said...

Here's a Dawn story on US help for Pakistan's energy sector:

ISLAMABAD: Pakistan and United States on Tuesday agreed to enhance cooperation in energy sector with special focus on development of bio-gas and wind energy to help Pakistan overcome power crisis.

Pakistan needs investment, particularly in the most needed energy sector, said Finance Minister Ishaq Dar while addressing a joint press conference along with President Overseas Private Investment Corporation (OPIC), Elizabeth L. Littlefield, who was heading the US delegation in talks with Pakistan.

Earlier, US delegation held detailed discussions with Pakistan’s economic and energy managers led by the finance minister and discussed various issues related to investment in various sectors of economy, particularly in energy sector.

Dar told media representatives that talks with the Opic were the part of government's efforts to bring foreign investment into the country and help enhance economic growth.

He said that both the countries agreed in principle to continue dialogue on Civil Nuclear Technology cooperation. However, he added that no timeline could be given for any future agreement on the issue.

The finance minister said that Independent Power Producers (IPPs) have capability to generate more electricity and the government has paid circular debt to enhance generation capacity.

He said both the sides also agreed to continue dialogue on the pending issues of Bilateral Investment Treaty (BIT) to tap the investment potential.

Terming the terrorism as one of the challenges the country was facing, Ishaq Dar said the government was committed to come up with a comprehensive strategy by taking onboard all political parties to overcome this menace.

He said that ensuring transparency and good governance were among the top priorities of the government.

Earlier, the minister informed the US delegation about the successful passage of federal budget 2013-14.

He said the government, this year, has enhanced the allocations for Public Sector Development Programme to Rs1.155 trillion besides enhancing the allocations of Income Support Programme from Rs40 billion to Rs70 billion.

Dar urged the Opic to bring into investment of private companies in Pakistan's energy sector. He assured the US delegation that Pakistan was a safe as well as lucrative country for investment and provides a conducive atmosphere for foreign investors.

Addressing the press conference, Elizabeth Littlefield said the investment through Opic into Pakistan has increased from $80 million to $300 million, witnessing manifold increase during past couple of years.

She said that Pakistan was facing some challenges. She, however, expressed the optimism that the new government would overcome all these challenges and lead the country towards better future.

Littlefield said her country will enhance cooperation with Pakistan in power generation through wind and bio-gas, besides enhancing technical cooperation to increase power generation through alternative ways.

She said that the US companies have already been involved in development of energy sector of Pakistan as a 50 megawatt electricity project by an American firm was continuing in Sindh province.

Earlier, while briefing the finance minister and his delegation about the operations of the Opic, she said the corporation mobilises private capital to help solve critical development challenges.

The Opic works with the US private sector and helps businesses gain footholds in emerging markets, catalysing revenues, jobs and growth opportunities both at home and abroad.

The corporation achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds, she added.


http://dawn.com/news/1029436/pakistan-us-to-enhance-cooperation-in-energy-sector

Riaz Haq said...

Here's a PakistanToday report on expected addition of nuclear power plants by 2016:

Completion of the Chashma Nuclear Power Plants CHASNUPP-III and CHASNUPP-IV by 2016, 340 megawatts (MW) respectively, will help meet the target of the Pakistan Atomic Energy Commission (PAEC) for generating 8,800 MW by the year 2030 via nuclear power reactors. The plants reactors and other facilities are being built and operated by the PAEC with Chinese support. In November 2006, the International Atomic Energy Agency (IAEA) approved an agreement with the PAEC for new nuclear power plants to be built in the country with Chinese assistance. The 35-member board of governors of the IAEA unanimously approved the safeguards agreement for any future nuclear power plants that Pakistan would construct. According to official sources, the allocation of budget for the PAEC for the financial year 2013-14.is estimated at around Rs49,512.186 million "An amount of Rs34.6 billion has been set aside for Chashma nuclear power plants C3 and C4. The total cost of these two projects is Rs190 billion which will be partially funded by a Rs136 billion Chinese loan,” an official said. The government has so far spent 62.4 billion on the mega-project having a 660 MW generation capacity. With an additional spending of 34.6 billion, the government has already completed almost half of the work, the official said. The 300 MW Chashma nuclear power plant-I is a pressurized water reactor that began commercial operation in 2000.It is located at Kundian in Punjab while the 300 MW Chashma Nuclear PowerPlant-II is part of the Chashma Nuclear Power Complex in the north-western region of Thal Doab. On April 28, 2009 a general engineering and design contract for CHASNUPP-3 and CHASNUPP-4 was signed with Shanghai Nuclear Engineering Research and Design Institute (SNERDI)...

http://www.pakistantoday.com.pk/2013/07/17/news/profit/680mw-nuclear-plants-to-start-generating-power-by-2016/

Riaz Haq said...

Here's an ET story on pricing of domestic shale gas in Pakistan:


Pakistan Petroleum Limited (PPL) and Italy’s Eni have calculated that the price of shale gas should be $14 per million British thermal units (mmbtu), which has been rejected by the government as too much for the country’s existing tariff regime to absorb, an official told The Express Tribune.
The price was determined on the basis of expenditure required to drill for hard-to-reach shale gas reservoirs following a rise in interest in tapping this potential on the back of reports that Pakistan has massive reserves.
“There has to be a steady transition from conventional gas to tight and then finally to shale gas,” said Moin Raza Khan, Deputy Managing Director of PPL and head of its exploration operation. “This has to be a slow process because of the economics involved in the operations.”

Almost all the 4,000 million cubic feet per day (mmcfd) of gas produced in Pakistan comes from conventional gas fields, which can be reached relatively easily. Tight gas is trapped in impermeable rocks whereas gas trapped in shale formation is called shale gas.
Average consumer gas price is around $4 per mmbtu, undermining the prospects for shale gas to be brought into the system at this stage, Khan said.
“One reason why the US produces shale gas in abundance is because of the economies of scale. We would have to do that to make it feasible and this can’t happen overnight,” he said.

So for the time being exploration firms including PPL are focusing on tight gas, for which the government has increased the price by 40% through a separate petroleum policy.
First tight gas flows entered the transmission and distribution system in June this year as production of 15 mmcfd started from Kirthar block, which is a joint venture between a Polish firm and PPL.
Sui dilemma
For more than 57 years, Sui gas field fuelled the economy, so much that natural gas became synonymous with Sui gas. And now it has depleted.
“If you ask me I think the gas pressure will sustain for another 10 to 12 years,” Khan said. “The pressure used to be 1,300 psi (pounds per square inch), which has come down to only 300 psi.”
To tackle that problem, the company regularly installs compressor plants on the wells to maintain the pressure. “We are considering installing equipment for 100 psi and even 50 psi.”
Offshore expedition
PPL along with its local and foreign partners plans to drill a well in offshore Block-G in the Indus, the world’s second largest delta after the Bay of Bengal.
“Having a discovery offshore is very important,” he said, referring to the successive past failures. “So far, 13 wells have been drilled in Indus. Gas was found only in one and that wasn’t commercially feasible to take out.”
Pakistan has a coastline spread over 1,990 km and sub-divided into Indus and Makran deltas. Indus delta alone is spread over 1.1 million square kilometres. Pakistan’s area covers over 240,000 sq km of this....


http://tribune.com.pk/story/577736/too-hot-to-handle-govt-rejects-shale-gas-price-terming-it-too-much-to-absorb/

Riaz Haq said...

Here's a Polish report indicating the price of first tight gas produced in Pakistan is set $6 per mmBTU:

PGNiG and Sui Southern Gas Company Limited (SSGC) on Tuesday singed Gas Sales Purchase Agreement (GSPA), adding 30 Million Cubic Feet (MMCFD) of ''tight gas'' from Kirthar block in Sindh in SSGC''s system. After the signing ceremony, Dr Asim Hussain, the Prime Minister''s adviser on Petroleum and Natural Resources, told reporters that this is the first-ever ''tight gas'' GSPA in Pakistan.

The agreement was signed by Pakistan Petroleum Limited (PPL), Sui Southern Gas Company Limited (SSGCL) and Polskie Gornictwo Naftowe i Gazownictwo (PGNIG). The agreement signing ceremony was witnessed by Dr Asim Hussain, Dr Waqar Masood, the Secretary Ministry of Petroleum and Natural Resources and other officials. The Kirthar block is jointly owned by the Polish firm and Pakistan Petroleum Limited (PPL) and production from the field would start in May next year. Officials said that the price of ''tight gas'' would be $6 per mmbtu, which would be much higher than the current gas price. Hussain said that ''tight gas'' production would start in May 2013 and SSGC would lay a 52-kilometre-long pipeline at an estimated cost of Rs 325 million, carrying gas from the Suleman Range to the Nooriabad industrial estate.

He said that production from two wells that would produce 15 million cubic feet gas per day (mmcfd) each. He said that the Polish firm and PPL would further provide gas to the Sui Southern Gas Company limited and supply it to industries in the Nooriabad industrial estate in Sindh.

Hussain said that polish firm had invested $40 million to explore tight gas from Kirthar block in Dadu district while $20 million would be further invested. "The Polish firm has explored ''tight gas'' from two wells. It will also dig other wells to explore more gas," Hussain said

He rejected reports that Pakistan was facing any external pressure against the Iran-Pakistan gas project, adding that the nation would soon hear "good news" about this project. Hussain reiterated that the agreement was a significant step in the implementation of Pakistan''s Tight Gas Policy announced in 2011 for providing economically viable sources of energy. He stressed that the government had introduced incentives and investor-friendly policies for boosting investment in the Oil and Gas sector for substantially bridging the demand and supply gap of natural gas. Waldemar Woiciech Bak, Managing Director of PGNiG Pakistan thanked MD PPL for the support PPL has extended as a joint venture partner throughout this period to bring the project to its current status.

MD PPL Asim Murtaza Khan hoped that the timely completion of Rehman project will increase the gas supply significantly. He assured POL''s full support in this endeavour. MD SSGCL Zuhair Siddiqui appreciated JV partners for leading the industry in unconventional gas production and hoped that they will be bringing in more gas to the system in near future. An agreement between the Polish firm and SSGCL for laying the 52-kilometre-long pipeline from PGNIG''s Rehman Field to Naing Value Assembly of SSGCL in Dadu, was also signed on the occasion. SSGCL was awarded the contract for laying the pipeline. The project is likely to be completed by April next year.


http://islamabad.mfa.gov.pl/en/news/success_of_pgnig_

Riaz Haq said...

Here's a report on rising remittances to Pakistan from overseas Pakistanis:

ISLAMABAD, July 14 (KUNA) -- An increase of USD 733.64 million in the remittance of overseas Pakistani was observed by the State Bank of Pakistan (SBP) in the last fiscal year (July 2012-June 2013).
Overseas Pakistanis remitted an amount of USD13,920.26 million during the last fiscal year showing a growth of 5.56 per cent or USD733.64 million compared with USD13,186.62 million received during the same period of the last fiscal year (July- June 2012), State Bank of Pakistan said.
The inflow of remittances during July-June 2013 from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to USD4,104.73 million, USD2,750.17 million, USD2,186.21 million, USD1,946.01 million, USD1,607.88 million and USD357.37 million respectively. These amounts could be compared to the inflow of USD3,687.00 million, USD2,848.86 million, USD2,334.47 million, USD1,521.10 million, USD1, 495.00 million and USD364.79 million respectively in July-June 2012.
According to State Bank, remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the last fiscal year (July-June 2013) amounted to USD967.79 million as against USD935.36 million received in the last fiscal year (July- June 2012). The monthly average remittances for July-June 2013 period comes out to USD1,160.02 million compared to USD1,098.89 million during the corresponding period of the last fiscal year, said the SBP.


http://www.kuna.net.kw/ArticleDetails.aspx?id=2322337&language=en

Riaz Haq said...

Here's a CNBC report on Prince Walid Bin Talal's concern about growing shale oil and gas hurting Saudi economy:

Saudi billionaire Prince Alwaleed bin Talal warned that the Gulf Arab kingdom needed to reduce its reliance on crude oil and diversify its revenues, as rising U.S. shale energy supplies cut global demand for its oil.

In an open letter to Oil Minister Ali al-Naimi and other ministers, published on Sunday via his Twitter account, Prince Alwaleed said demand for oil from OPEC member states was "in continuous decline".

He said Saudi Arabia's heavy dependence on oil was "a truth that has really become a source of worry for many", and that the world's biggest crude oil exporter should implement "swift measures" to diversify its economy.

(Read more: Oil prices jump as US crude takes bigger role on world oil stage)

Prince Alwaleed, owner of international investment firm Kingdom Holding, is unusually outspoken for a top Saudi businessman.

But his warning reflects growing concern in private among many Saudis about the long-term impact of shale technology, which is allowing the United States and Canada to tap unconventional oil deposits which they could not reach just a few years ago. Some analysts think this may push demand for Saudi oil, as well as global oil prices, down sharply over the next decade.

Over the past couple of years the Saudi government has taken some initial steps to develop the economy beyond oil - for example, liberalising the aviation sector and providing finance to small, entrepreneurial firms in the services and technology sectors.

Nowhere Is Immune from Unrest: Saudi Prince
Saudi Prince Alwaleed Bin Talal, talks to CNBC about turmoil in the Middle-East and the price of oil.
Naimi said publicly in Vienna in May that he was not concerned about rising U.S. shale oil supplies. Prince Alwaleed told Naimi in his open letter, which was dated May 13 this year, that he disagreed with him.
"Our country is facing a threat with the continuation of its near-complete reliance on oil, especially as 92 percent of the budget for this year depends on oil," Prince Alwaleed said.

(Read more: Don't mess with West Texas: US oil to keep outpacing Brent)

"It is necessary to diversify sources of revenue, establish a clear vision for that and start implementing it immediately," he said, adding that the country should move ahead with plans for nuclear and solar energy production to cut local consumption of oil.

The shale oil threat means Saudi Arabia will not be able to raise its production capacity to 15 million barrels of oil per day, Prince Alwaleed argued. Current capacity is about 12.5 million bpd; a few years ago the country planned to increase capacity to 15 million bpd, but then put the plan on hold after the global financial crisis.

While most Saudi officials have in public insisted they are not worried by the shale threat, the Organization of the Petroleum Exporting Countries (OPEC) has recognised that it needs to address the issue.

(Read more: OPEC ministers: falling demand is our top concern)

In a report this month, OPEC forecast demand for its oil in 2014 would average 29.61 million bpd, down 250,000 bpd from 2013. It cited rising non-OPEC supply, especially from the United States.

At its last meeting in Vienna in May, OPEC oil ministers spent time discussing shale technology and set up a committee to study it.


http://www.cnbc.com/id/100920411

Riaz Haq said...

Net FDI in Pakistan up 76% from 2011-12 to 2012-13:

Net foreign direct investment into Pakistan rose 76 percent in the fiscal year 2012-13, which ended in June, reaching $1.447 billion compared to previous year, according to data from the State Bank of Pakistan.
Between July and June, there was an inflow of $2.653 billion and outflow of $1.205 billion, according to the central bank. In the same period the year earlier, there was an inflow of $2.099 billion and outflow of $1.278 billion.
During June this year, net foreign direct investment rose to $128 million compared to $56 million a year earlier.


http://www.dailytimes.com.pk/default.asp?page=2013\07\17\story_17-7-2013_pg5_3

Riaz Haq said...

The cash starved government spent huge amount of $7.697 billion on oil imports in just six months (July-December) of the current financial year (2012-2013) as petroleum products’ demand increased owing to loadshedding of CNG throughout the country.
Analysts said that severe energy crisis in the country and lower capacity operations of refineries pushed the oil import bill upwards. They said that rise in imports of finished products was due to high demand for energy generation. They further said that oil import bill might further increase in December and January. According to the figures of Pakistan Bureau of Statistics (PBS), the country’s petroleum products import has shown an increase of 1.15 per cent in one year, as it imported oil worth of $7.697 billion in July-December of the ongoing financial year against $7.610 billion of July-December of the last year 2011-2012.
Analysts said that the country should ensure energy supply through own resources; otherwise the oil import bill would affect the country’s fiscal position. “As gas supply situation in the country is not expected to improve in the near future, the oil import bill will continue to mount pressure both on value and volumetric basis,” an analyst said.
The break-up of $7.697 billion oil import bill revealed that country spent $4.920 billion on petroleum products and $2.777 billion on import on petroleum crude during the first six months of ongoing financial year.
The PBS figures revealed that country imported food stuff worth of $2.157 billion during July-December of the year 2012-13. The break-up of $2.157 billion revealed that import bill of milk products was up by 3.20 per cent, dry fruits and nuts 1.02pc, import of tea increased by 6.46 per cent, import of spices decreased by 30.06 per cent, soyabean oil’s imports went up by 26.47 per cent, palm oil import decreased by 18.92 per cent, sugar import declined by 78 per cent, import of pulses went down by 12.76 per cent and import of all other food items decreased by 24.80 per cent during the period under review.
Meanwhile, according to PBS figures, the country imported machinery worth of $2.907 billion. Transport group imports stood at $951 million, textile group $1.115 billion, agricultural and other chemicals $3.136 billion, metal group $1.529 billion, miscellaneous group imports were recorded at $402 million and all other items imports remained $ 2.026 billion during July-December period of 2012-13 against July-December period of 2011-12.
It is worth mentioning here that Pakistan’s overall imports were recorded to $21.922 billion in July-December period of ongoing financial year as compared to $22.678 billion of the corresponding period last year.

http://nation.com.pk/business/23-Jan-2013/oil-import-bill-surges-to-7-697b-in-6-months

Riaz Haq said...

#Hungary's MOL makes it an even dozen #oil & #gas discoveries in #Pakistan http://upi.com/6332948t via @crudeoilprices

Hungarian energy company MOL said Friday it made a new discovery of oil and gas in Pakistan, bringing the total there so far to an even dozen.

Operating through a national subsidiary in Pakistan, the company said its discovery in the so-called TAL block in Pakistan is No. 8 so far in that basin and No. 12 in its history in the country. MOL has worked in Pakistan for the last 17 years.

"We are very proud of our 8th discovery in the MOL-operated TAL block," Berislav Gaso, MOL's chief officer for exploration and production, said in a statement. "This new discovery will help to improve the energy security of the country."

Pakistan consumes most of the natural gas it produces and the country has faced power issues because of aging infrastructure. According to the Asian Development Bank, addressing chronic energy issues is one of the ways in which Pakistan can ensure its economic growth remains on course.

Pakistan's economy is expected to expand from a 4.2 percent growth rate in 2015 to 4.8 percent by next year. A net importer of energy resources, the ADB said lower oil prices and soft inflationary pressures were pushing Pakistan's economy forward.

MOL said it was producing around 80,000 barrels of oil equivalent per day from the TAL block so far. Reserves flowed from the latest confirmed discovery at a test rate of around 2,000 barrels of oil per day and 900 barrels of oil equivalent in natural gas per day.

Riaz Haq said...

#Pakistan’s discoveries add 50 million cubic ft per day (mmcfd) of #gas, 2,359 barrels per day (bpd) of #oil levels.

http://tribune.com.pk/story/1132448/pakistans-oil-gas-discoveries-touch-record/

Pakistan has made the highest number of oil and gas discoveries in the current month as exploration companies found fresh hydrocarbon deposits in six wells that will add 50.1 million cubic feet per day (mmcfd) of gas and 2,359 barrels per day (bpd) of oil to the existing production levels.

Of these, major discoveries have been made in Sindh that already has a big share in total gas output in the country.

Gas utilities: World Bank recommends single transmission firm

Petroleum and Natural Resources Minister Shahid Khaqan Abbasi, while speaking during a meeting of the National Assembly Standing Committee on Petroleum and Natural Resources chaired by Bilal Ahmed Virk on Tuesday, said four discoveries were made in Sindh and the remaining two in Khyber-Pakhtunkhwa.

Of these, Oil and Gas Development Company made two finds, MOL Pakistan two and Petroleum Exploration Limited and United Energy Pakistan one each. The discoveries have shown presence of 31.6 mmcfd of gas and 339 bpd of crude oil in Sindh and 18.5 mmcfd of gas and 2,020 bpd of oil in K-P.

Sui Northern Gas Pipelines Limited (SNGPL) Managing Director Amjad Latif warned that the country’s gas reserves were depleting and no gas was available for the domestic consumers in Punjab. He pointed out that the purchasing cost of gas for domestic consumers stood at Rs510 per million British thermal units (mmbtu) but the consumers coming under the first slab were receiving it at Rs110 per mmbtu.

Eighty-five per cent of domestic consumers were paying less than 50% of the cost of gas and the industrial and commercial consumers were cross-subsiding the domestic consumers, he said.

However, now industrial and commercial consumers were being provided imported liquefied natural gas (LNG), so the burden of cross-subsidy had been shifted to SNGPL that was feeling the strain on its finances.

Though the gas production was declining, Latif told the committee that the company would lay pipelines over 8,000 km in the current year. At present, 1.5 million applications for new gas connections are awaiting approval of the company.

The country was facing gas shortages as politicians were using it as a tool to win elections.

During the meeting, National Assembly member Mian Tariq Mehmood, who belonged to the ruling PML-N, alleged that SNGPL had provided 100 gas meters in his constituency to please his political rival Imtiaz Safdar Warraich, though his requests for new meters were turned down repeatedly.

He insisted that the provision of gas meters to his opponent had damaged his political image. NA Standing Committee Chairman Bilal Ahmed Virk accused Director General Petroleum Concession Saeedullah Shah of not responding to the committee for the last two years.

Sui lease extension: PPL to pay 10% bonus to Balochistan

Describing Shah’s attitude as non-sense, he said he was not cooperating with the committee and sought the record of past meetings to show response of the director general of petroleum concession.

The committee also took up for review the issuance of licences for liquefied petroleum gas (LPG) stations to the defaulters that were previously running CNG stations.

It recommended that rules of Oil and Gas Regulatory Authority (Ogra) should be amended to ensure the clearance of outstanding bills of SNGPL, Water and Power Development Authority and banks before issuing licences for setting up LPG stations.

Riaz Haq said...

Tapping #Pakistan’s wealth of #oil and #gas. #energy #LNG #pipelines #CPEC @GlobalCapNews http://www.globalcapital.com/article/b100v25p7rkjmc/tapping-pakistans-wealth-of-oil-and-gas …

Energy has long been Pakistan’s curse. This is a country whose large and rising population (the
country had 195 million people as of October 2016, according to government data, making it the
world’s sixth most populous country) has long presented its government with a complex challenge:
to tap new sources of hugely valuable energy where little, if any, had historically existed.
There is carbon here in spades. Pakistan boasts 754 billion cubic metres’ worth of gas, placing it
28th in the list of the world’s largest sovereign producers of natural gas. It has rather less oil, at
least in comparison to other countries in the region, placing it 52th on the global list.
Coal, though, is another matter. A recent find in the desert district of Tharparkar, hard by the border
with the Indian province of Rajasthan, may ultimately generate up to 185 billion tonnes of
anthracite and lignite coal. If that find yields anything near its earliest estimates, it would vault
Pakistan overnight from a ‘resource­poor’ nation into the energy­producing major leagues.

Coal would help diversify the
country’s energy mix. Pakistan is
heavily reliant on natural gas and
oil to meet its primary energy
requirements. The country’s gas
deficit currently runs at between 2
billion and 4 billion cubic feet per
day, depending on the season and
the time of day. Total local crude oil
production, meanwhile, has long
lagged: Pakistan currently has to
import around 87% of its oil needs,
mostly from the United Arab
Emirates and Saudi Arabia

------

In September 2016, Shahid Khaqan Abbasi, Minister of Petroleum and Natural Resources, told
Pakistan’s National Assembly that the oil and gas sector had received investments totaling
$15.3bn since the start of 2013, adding that the country had made 82 oil and gas discoveries over
the same period.
Analysts are impressed by what they are seeing. “Lucrative policies on gas pricing, stability
resulting from improving law and order, and vast arrays of unexplored territory, have created
attractive propositions for exploration and production companies, who are well positioned to deploy
the excess cash on their books,” notes Farrukh Sabzwaria, director of regional equities sales at
Credit Suisse in Singapore. “Oil & gas exploration has made up 30%­40% of foreign direct
investment over the past few years — and four multinationals are firmly entrenched, and should
continue to bring in FDI for exploration and development activities.” In other words, Pakistan, once
a minnow in the fields of energy production and exploration, is well on its way to becoming a major
player in the field, thanks to far­sighted government policy

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In September 2016, Finance Minister Ishaq Dar said that three south­north pipelines, stretching
from Gwadar to western China, were under construction, with the first set for completion by the
end of 2016. “The second,” the finance minister added, “would be a parallel north­south pipeline
built [with] Russian investment, while the third pipeline is planned between the towns of Gwadar
and Nawabshah” in the easterly province of Sindh.

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Then there are the country’s untapped reserves of carbon. In November 2015, petroleum ministry
advisor Zahid Muzaffar said Pakistan’s total oil and gas reserves, including unexplored offshore
wells and fields, were greater than all Central Asian states combined. If true — and given that
Central Asia includes one major gas producer, in Turkmenistan, and one major oil produce, in
Kazakhstan — it would place Pakistan’s energy sector and the wider economy in a highly
promising position.