Pakistan and fossil gas
Pakistan is the world's fifth largest country, with a population of 229.5 million people as of 2022[1]. The GDP growth rate was 5.7% in 2021 and is forecasted at 6% in 2022 and 3.5% in 2023.[2]
The country's energy sector has been facing severe crises due to heavy reliance on imported fuel and an ever-widening gap between supply and demand. Between 1998 and 2004, fossil gas demand grew at an average rate of 17.5% per year. Low gas prices and subsidies resulted in growing demand in the power, industrial and residential sectors. Pakistan's generation capacity has been unable to meet demand in the last few decades. In 2004, supply/demand imbalances started and were managed by sector gas allocation and load shedding and LNG imports.[3] In fiscal year 2021-2022, Pakistan paid $4.9 billion for LNG imports.[4]
Fossil Gas in the Fuel Mix
As of 2022, domestic fossil gas makes up 33.1% of primary energy supply mix.[5] Due to rapidly growing consumption and depleting domestic reserves, Pakistan started importing LNG in 2015.[3] In 2021, imported LMG corresponded to around 30% of the total fossil gas consumption in the country.[5] As of February 2022, 75.64% gas was domestically produced, while 24.36% was being imported. [5]
The average fossil gas consumption has declined from 3,723 MMCFD to about 3,565 MMCFD during July-March FY2022.[5] This includes gas (2,702 MMcfd) as well as RLNG (863 MMcfd). The biggest consumers are the power sector (1,115 MMcfd), domestic sector (908 MMcfd), fertilizer industry (735 MMcfd) and general industry (664 MMcfd).[5]
Pakistan's total electricity generation capacity is 41,557 MW, of which 3,536 MW (8.5%) is gas fired and 9,884 MW (23.8%) is RLNG-fired. Over 60% of total RLNG consumption is in the power sector. [5]
In August 2020, Pakistan announced that its new energy plan aims for 30% renewable power generation, mainly wind and solar, by 2030, up from current levels of 4%.[6][7]
In its recent Nationally Determined Contributions (NDC), Pakistan has committed to a cumulative ambitious conditional target of overall 50% reduction of its projected emissions by 2030. This includes a 15% reduction from the country’s own resources and an additional 35% subject to the provision of international grant finance. To achieve this target, Pakistan aims to transition toward 60% renewable energy and 30% electric vehicles by 2030 and plans to completely ban imported coal.[8]
Fossil Gas Production, Imports, and Transportation
Pakistan's gas reserves stand at 21.45 trillion cubic feet (balance recoverable) as of June 2019. The country also has a large untapped shale gas potential. A study in 2015 by Pakistan's Ministry of Energy concluded that Pakistan had 95 trillion cubic feet of risked recoverable reserves.[9] However, geography, environmental constraints, security concerns, and low fossil gas prices in Pakistan are obstacles to the development of these resources.[10] As of 2020, Pakistan's fossil gas reserves are depleting at a rate of 9.5 percent per year. [11]
In 2021, Pakistan had 32.7 BCM of domestic gas production and imported 12.1 BCM of LNG.[12] As of 2021, there are four long-term LNG supply contracts totalling 6 mtpa of LNG.[9] However, the price volatility and other factors have made timely imports difficult. During the period of January 2021 to February 2022, the country faced seven instances where the long-term contract suppliers defaulted.[13]
Pakistan also buys a large amount of LNG on the spot market. In fact, a recent study reported that the country sources 40-50% of its LNG from the international spot market, which further exposes the country to extreme price volatility.[13]
Pakistan has an extensive gas network of over 13,513 km transmission,155,679 km distribution and 41,231KM services gas pipelines.[5]
The country has two LNG import terminals, including the 4.8-mtpa Engro Elengy import terminal, which was commissioned in 2015, and the 5-mtpa Pakistan GasPort Consortium Ltd. (PGCL) import terminal, commissioned in 2018. Both are offshore floating storage and regasification units (FSRUs) and enjoy guaranteed offtake agreements from the government.[5][9]
As of 2022, there are no pipeline imports but several pipeline projects are in development.[3]
Government Agencies and other Key Players in Gas Sector
Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PLL) are the largest exploration and production companies in Pakistan, with a 29.2% and 19.3% share of gas production, respectively.[9]
Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) are the main players in the downstream gas sector, with a share of 48% and 28% respectively. [9]
References
- ↑ "World Population Dashboard-Pakistan". United Nations Population Fund. 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Pakistan: Economy". Asian Development Bank. 2022-09-21. Retrieved 2022-10-07.
{{cite web}}: CS1 maint: url-status (link) - ↑ 3.0 3.1 3.2 "Emerging Asia LNG Demand". Oxford Institute for Energy Studies. Retrieved 2021-01-21.
- ↑ Ariel Cohen. "Pakistan's Deluge Is Deepening Its Longstanding Energy Crisis". Forbes. Retrieved 2022-10-07.
- ↑ 5.0 5.1 5.2 5.3 5.4 5.5 5.6 5.7 "PAKISTAN ECONOMIC SURVEY 2021-22". Government of Pakistan - Finance Division. 2022. Retrieved 2022-10-07.
{{cite web}}: CS1 maint: url-status (link) - ↑ "New Pakistani energy plan aims for 30% renewable generation by 2030". Institute for Energy Economics & Financial Analysis. 2020-08-10. Retrieved 2021-01-22.
- ↑ "Alternative and Renewable Energy 2019" (PDF). AEDB.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Pakistan Nationally Determined Contributions 2021" (PDF). UNFCC.
{{cite web}}: CS1 maint: url-status (link) - ↑ 9.0 9.1 9.2 9.3 9.4 "Development Plan for Pakistan: Oil and Gas Industry 2020" (PDF). Ministry of Energy (Petroleum Industry). Retrieved January 21, 2021.
{{cite web}}: CS1 maint: url-status (link) - ↑ "EIA - Pakistan Overview". Retrieved January 22, 2021.
{{cite web}}: CS1 maint: url-status (link) - ↑ Desk, News. "Construction on 1,100-KM North-South gas pipeline likely in July". Mettis Global News. Retrieved 2021-01-21.
{{cite web}}:|first=has generic name (help) - ↑ "BP Statistical Review of World Energy 2022" (PDF). Retrieved January 22, 2021.
{{cite web}}: CS1 maint: url-status (link) - ↑ 13.0 13.1 "Rising LNG Dependence in Pakistan Is a Recipe for High Costs, Financial Instability, and Energy Insecurity". ieefa.org. Retrieved 2022-10-14.
