Gas crisis to deepen next year, says official

ISLAMABAD: Pakistan’s energy crisis is feared to worsen next year with the gas shortfall likely to almost double to more than two billion cubic feet a day (BCFD), despite liquefied natural gas (LNG) imports planned over the next few months.
 
Petroleum Secretary Mahmood Salim Mahmood told the National Assembly’s standing committee on petroleum and natural resources that the gap between gas demand and supply stood at around one BCFD this year and the plan to import gas from Iran through a proposed pipeline would, at best, materialise in four to five years. In the meantime, he said, a project to import about 0.5 BCFD of LNG was being pursued.

Official figures suggested that the shortage, which stood at about one BCFD this winter, would go up to 2.1 BCFD by next year. The demand and supply estimates presented by the Interstate Gas Company — a subsidiary of the petroleum ministry — suggested that the gas shortfalls would increase by more than 300 per cent to 6.5 BCFD by 2020.

The projections imply that while the gas demand would maintain a steady increase over the next 10 years — from 4.8 BCFD now to 8.6 BCFD in 2020 — the supplies would register a further decline, from four BCFD this year to 2.11 BCFD by 2020. Over the next two years, however, the supplies would slightly increase by 0.5 BCFD because of LNG imports.


The documents suggest that the shortfalls would increase despite a projected gas import through the IPI pipeline in 2014 and LNG imports next year because of the decrease in domestic production. These estimates prepared by PriceWaterHouse Coopers suggest that shortfalls would be even higher if taken at the historic 6.5 per cent growth rate rather than 4.5 per cent assumed by the Interstate Gas Company.

According to official estimates, domestic gas demand would increase to 6.8 BCFD in 2011, about 7.1 BCFD in 2012 and to 7.6 BCFD in 2015. The demand would further rise to 8 BCFD in 2017 and 8.6 BCFD in 2020. On the other hand, supplies would start declining from 4.7 BCFD in 2012 and reach 3.7 BCFD in 2015. The supplies would drop to 2.6 BCFD in 2018 and further come down to 2.1 BCFD in 2020. As result, the shortfall would increase from 2.1 BCFD next year to 3.2 BCFD in 2014 and 5.12 BCFD by 2017. The estimated shortfall in 2020 would be 6.5 BCFD.

Sources said the demand, supply and shortfall estimates were still conservative given the fact that these had been prepared keeping in mind the current downturn in economic activities.

They said that even import plans were uncertain to materialise because of political and regional problems. That would mean even higher reliance on imported fuels like diesel and furnace oil to meet electricity demand. The oil import bill last year stood at about $9.5 billion and is forecast to be around $11.6 billion. However, if the gas import pipelines were not completed, the oil import bill could reach $15 billion in only two years, the sources said.

Over the past few years, the government had planned five major initiatives to meet energy requirements, including three gas import pipelines, Gwadar port as an energy hub and LNG import. However, four of the measures, including three import pipeline projects, show no signs of progress while concentration on energy facilities at Gwadar would chiefly depend on the security situation. The LNG project that was originally planned to be completed by June 2009, too, is not likely to deliver gas supplies before March 2010, the sources said.