Energy experts have recommended to the government to deregulate Liquefied Natural Gas (LNG) market and inland freight margin of petroleum companies and introduce Ron 92 fuels in accordance with the international standards. These views were expressed at a seminar tilted "Pakistan Oil and Gas Conference" Organised by Petroleum Institute of Pakistan (PIP) here on Wednesday.
The participants of the conference expressed dissatisfaction over the current pace of oil/gas discoveries saying that the Exploration and Production (E&P) companies have to explore the frontier regions to increase local gas production.
The participants of the conference adopted the following recommendations: Integrated Energy Plan for Pakistan, Regulatory Reforms, CPEC Security to be extended to the oil & gas industry, Fuels Specs RON 87 to 92 & Euro II standard, Deregulate LNG imports, Deregulate Petroleum Margins and IFEM, Gas Companies- Smaller Distribution setups and Fast-Tracking Additional LNG Projects.
Speaking at the conference Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi made it clear that to deal with the energy crisis import of Liquefied Natural Gas (LNG) was the only solution in short term. He said that during past one decade no major gas discovery has been made in Pakistan, while utilisation of gas was enhanced 100 percent as a result of which the country plunged into energy crisis.
During past 10 years, major gas reservoirs started depleting while no significant discovery was made despite the fact hundreds of small discoveries were made, but these discoveries were not sufficient to meet local demand as a result overall gap between supply/demand reached 4 Billion Cubic Feet per Day, Abbasi said.
The Minister said that some so called energy expert will be talking about the energy solution by cow dung or nuclear energy. "I must tell you that neither the Cow Dung nor the Nuclear is the solution to Pakistan's energy crises," the minister maintained. He said that about 50 percent of Pakistan energy is based on gas, then comes the oil, hydel and nuclear. Hydel and nuclear is time and money consuming while LNG based power plants are easy to develop. "By December 2017 we will wipe out most of the energy related issues," he claimed.
Besides he said that the RLNG based power plants are more efficient as compared to the Oil based power plants. The generation capacity of Oil based power plants is 22, 35 and 40 percent while the RLNG power plants generation capacity will be 62 percent. "In the presence of RLNG, which is much cheaper and efficient using oil based power plants tantamount to a crime", he said and added that, after China, Pakistan is the 2nd largest importer of Furnace Oil.
The minister said that it is only due to LNG that Textile, Fertiliser and the dying CNG sector have become operational. "Today the Fertiliser industry is thinking of exporting fertilisers, it is the real economics as on one hand we are importing LNG and on the other we are exporting our value added products," the minister said. "There is a huge demand of LNG and people are asking for it, today give me 2.6 BCFD of gas and we have demand for it", he said.
Earlier the Federal Minister for planning Development and Reforms, Ahsan Iqbal while addressing the conference said that under China Pakistan Economic Corridor (CPEC), besides the road network the country will have an energy corridor which will cater for the energy requirements of the country. He said that Petrol Chemical plants would be installed at Gwadar which will cater for the requirement of the entire region.
Talking about Pakistan oil storage CEO Oil Companies Advisory Council (OCAC), Ilyas Fazil said that strategic reserve vary as per government policy EU member states are required to hold stocks at the higher of 90 days of average net daily imports 61 days of average daily intend consumption in order to mitigate a supply crises. Germany maintains 90 days through a federally body with refineries, OMCs and government as members. In every case, the responsibility and ownership for maintaining strategic stocks resides with governments, with the industry co-operating in the implementation of policy, he said.
He said that few years back study was conducted which has proposed 45 days strategic stock across the country but the recommendation was not implemented. The fact remains that there is still no policy on strategic storage for Pakistan, Ilyas Fazil added. We propose that a working group be constituted by MNPR at earliest to evaluate detailed options for strategic storage for Pakistan. PPL CEO said that as compared to developing countries Pakistan must plan for a demand of 16BCFD.
Pakistan population doubles every 23 years, if trend continues we will reach to 800 million in next 40 years. By 2040 Pakistan needs to plan for a demand of 30 to 40 BCFD. He said that the biggest threat is not from outside the borders but it is from within the country. Currently we are working on only 10 percent acreage of Pakistan total area while the production is coming from only two percent of the total acreage, it means we have a lot of potential, "he said.
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