Gas shortage in Pakistan leads another chilly winter

Pakistan is caught between depleting reserves and increasing demand for natural gas, which contributes some 48 percent to the country’s energy mix. The federal government on Wednesday said the shortfall would almost double next year unless infrastructure constraints were phased out.

gas shortage

Amid an ongoing controversy over gas shortages, the federal government on Wednesday said the shortfall would almost double next year unless infrastructure constraints were phased out through cooperation of the stakeholders concerned, particularly Sindh.

At a meeting of the Cabinet Committee on Energy (CCoE) presided over by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh, the ministry of energy reported that gas shortfall was increasing due to about 7 per cent decline in domestic gas production and 5pc growth in consumption when compared with last year, effectively creating a 12pc gap between the demand and supply.

This was despite the ongoing subdued economic growth rate. “Due to lack of gas exploration during the last 10 years, production of gas had declined by 7pc while demand had risen by 5pc annually which had resulted in a heavy gas shortfall which stood at nearly 270mmcfd (million cubic feet per day) in December 2019,” an official statement said. This shortfall was estimated to reach 477mmcfd in 2020-21.

Pakistan is caught between depleting reserves and increasing demand for natural gas, which contributes some 48 percent to the country’s energy mix. The demand grows significantly between December and February, when temperatures drop close to zero, and is propelled by an increase in population.

Read more: Reports on Oil & Gas discovery in Pakistan untrue!

In December 2018, gas consumption reached 4.216 billion cubic feet per day (bcfd), compared with 3.942 bcfd a year earlier.

According to the Oil and Gas Regulatory Authority (OGRA), which regulates the oil and gas sector in Pakistan, the demand-supply gap during the 2017-18 fiscal year was 1.45 bcfd. It is expected to rise to 3.7 bcfd in 2019-20.

Without gas imports, the demand is forecast to reach 4.6 bcfd in the 2022-23 fiscal year and 6.7 bcfd in 2027-28.

To address the shortfall, the government has decided to build additional terminals and five new private terminals had been awarded in November 2019

The prime minister’s special assistant on petroleum, Nadeem Babar, said in November that domestic gas production is declining by 5-7 percent a year.

“The government would continue to import LNG [liquefied natural gas] to cater to local demand. Shale gas exploration activities would also commence by next month,” Babar told participants of the Annual Technical Symposium and Exhibition organized in Islamabad by the Society of Petroleum Engineers.

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To address the shortfall, the government has decided to build additional terminals and five new private terminals had been awarded in November 2019, while the process for a dedicated pipeline of more than 1,200mmcfd required to carry imported liquefied natural gas (LNG) from these terminals to the northern parts of the country would also begin soon.

The meeting was explained that average electricity and gas price currently stood at about 60:40 and greater number of consumers was relying on gas for heating and cooking in winters when compared to electricity. Even in gas, about 36pc gas consumers were being provided gas at Rs121 per unit against an average price of Rs780 per unit for domestic gas and almost Rs1,600 per unit for imported LNG.

The committee was given a detailed briefing on the current situation of demand and supply of gas/Re-gasified LNG, natural gas allocation and management, average gas supplies, winter load management, indigenous gas production, supplies and consumption in different regions and LNG requirement by the Sui Northern Gas Pipelines Ltd (SNGPL)/ Sui Southern Gas Company (SSGC).

The meeting was also informed that residential consumers of Karachi were anticipated to suffer the most next year due to gas shortage as the consumption had increased by almost 20pc this year.

Injecting more natural Gas in the system operating at high pressure is like pouring water in a profusely leaking bucket

Besides a shortfall in production, the country also faces issues in distribution which aggravates the issue. According to Former Managing Director of Sui Southern Gas Company (SSGC) Dr Faizullah Abbasi, the natural gas shortages have become endemic and will never be mitigated unless we understand the underlying reasons that further aggravate the situation in the winter and bring about leakage remedial measure in the natural gas distribution network.

The academic believes that the two utility companies- SSGC and Sui Northern Gas Pipelines Limited (SNGPL) – blame theft for the gas loss. He highlighted that despite spending a huge amount on curbing gas theft, the issue still remains.

Dr Abbasi blamed the flawed strategy of increasing gas pressure in winters behind high gas losses.

“Injecting more natural Gas in the system operating at high pressure is like pouring water in a profusely leaking bucket,” wrote the former SSGC MD.

He suggests rehabilitation of the leaking distributions networks and a switch from natural gas to LPG in the domestic and commercial sectors.

Read more: Pakistan Energy Mix: Overview of Gas Sector (Upstream)

In attempts to mitigate the looming gas crisis, the government has floated a tender for imports of four LNG cargoes in December, five in January and one in February.

The committee noted that there was a need to work on contingency plans for 2020-21 to overcome the gas shortage and improve its supplies by using energy produced through gas and electricity as a whole.

The meeting also asked the ministry of energy to brief it in the next meeting on the current situation in the power sector so that the issues and problems in both the gas and power sectors could be properly analysed.


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