The energy sector plays a vital role in internal growth of any country. Pakistan is lucky in the sense that adequate indigenous energy reserves were identified and discovered over last decade.
Pakistan's Gross Domestic Product growth rate is around 7% which is expected to remain some what the same in the next few years. Presently, Pakistan's indigenous gas production suffice the gas requirements during summer but run short of the demand during peak season of winter particularly in the northern parts.
The anticipated industrial growth rate, however points toward a serious energy short fall in year 2010 as a result of gap in Country's gas demand and supply. Pakistan is not self sufficient in oil production and produces only 20% of 350 thousand barrels of daily oil requirements.
Currently, indigenous natural gas supplies contribute 50% of Pakistan's energy needs whereas the rest is met by Oil, Hydro, Coal and Nuclear energy. Pakistan ranks third in the world for use of natural gas as a motor fuel, behind Brazil and Argentina.
Natural gas Consumption and production is around 2.5 4.0 Bcf a day. The consumption levels are however expected to grow over the next few years in view of the aforementioned GDP/ Industrial growth rate. Pakistan is pursuing hard and considering various options to meet the requirements.
Natural Gas is becoming more attractive and valuable with the sharp rising trends in oil prices. The world-wide shifting trend towards Natural Gas as a preferable source of energy is most prominent in Pakistan. Here, Natural Gas is being utilised by Power, Fertiliser, Industrial, Commercial and Domestic sectors.
Statistic shows that the difference in the consumption of Natural Gas and Oil as a source of energy has grown up to 2.5 times in the last 20 years. Natural gas is environmental friendly cleaner fuel and Pakistan's current policy is aiming to make it the Fuel of Choice" for the future electric power generation projects. Government is paying special attention for the encouragement of exploration and development activities by the local as well as foreign companies in the region to exploit each and every potential prospect.
Furthermore, Pakistan's government is working on plans to build a pipeline that target Iran's massive reserves to be linked to Pakistan Gas Network and onward to Indian territory. This IPI project shall also enable Pakistan to meet its NG. It is important to point out here that Pakistan's geographic location verywell suits the import of Natural Gas either in the gaseous state or in the liquid phase.
In Gaseous state it can be transmitted from Iran or Turkmenistan / Russia. Russia's Gas reserves are 39.06% of World's total Proven Natural Gas reserves ie 6044 Tcf, followed by Iran's 15.6%.
Natural gas can also be imported from the Natural Gas Exporter countries in the form of LNG (Liquefied Natural Gas). LNG is basically the same natural gas condensed into liquid at atmospheric pressure by cooling it to approximately -163 Degree Celsius and is shipped in specially constructed seagoing vessels. Volume of NG in Liquefied state is reduced to 1/600th of its original volume at STE LNG can be purchased from the open market or from the nearby countries such as Qatar (third largest Producer of NG) and UAE.
LNG importer require LNG import terminal with Re-Gasification plant. Presently there are 28 LNG export and 50 LNG import terminals in the world. Out of these 50 LNG import terminals 24 are in Japan with 50% of World's LNG import. Government of Pakistan has taken a very positive initiative by granting a 10-year complete tax and duty holiday for all activities and projects related to the import and distribution of LNG.
The policy envisaged zero customs duty on Imported LNG and zero custom duty and sales tax on plant, equipment, materials and machinery However, it is pertinent to mention that the economics of LNG chain equalises with the pipeline project if the distance for construction of pipeline is to the tune of 1600 Km for off-shore and 3200 Km On-shore. In this case the preferred and viable option for Pakistan is to go for IPI project due to high gas intake but for purposes of developing alternate source and for insuring energy security the LNG chain could be relied upon.
It is worth mentioning here that similar to the incentives package granted for the construction of LNG import terminals, Government should also ensure the provision of special benefits to the E&P sector for the up-lift of exploration and development activities in the region. These forward steps would encourage the companies to work even in the remote and far flung areas of Pakistan.
Comments
Comments are closed.