Dr Farid A Malik |
At a price of $ 11.34 per MMBTU LNG for most Pakistanis is as unaffordable as buying a Rolls Royce automobile. The only difference being that RLNG (Regasified Liquefied Natural Gas) is readily available while Rolls Royce cars are sold to qualified buyers only. A few years back I had the chance of meeting a heavyweight of the oil and gas sector who had recently stepped down as the Chairman of OGDC (Oil and Gas Development Corporation).
He pointed at the glass of water lying on the table while uttering these words, ‘Can you imagine a situation if one is thirsty but cannot afford to buy this water to quench his thirst’. For downtrodden people of Pakistan LNG has proven to be a teaser. In a world driven by technology, energy has to be taken seriously. While the world was struggling for fuel in the 20th century, natural gas was discovered in 1952 at Sui, Dera Bugti.
Community Cooking Centers will have to be organized instead of individual connections as most utility bills are out of the reach of the masses.
At 12 TCF (Trillion Cubic Feet) it was one of the largest deposits of the world. PPL (Pakistan Petroleum Limited) a joint venture between Government of Pakistan (GOP) and a multinational company was given the task of pumping outgas. Two public sector companies SNGPL (Sui Northern Gas Pipelines Limited) and SSGC (Sui Southern Gas Company) were tasked for the transmission and distribution of this natural resource.
For about fifty years (1952-2002) the nation enjoyed clean natural fuel. Due to mismanagement and misuse, the deposit is down to 2TCF, depleted much before its time. With no new discoveries, today Pakistan faces serious fuel crisis. No nation can rely on imported fuel. LNG is being imported from Qatar. The gas is liquefied and then loaded on special sea vessels that transport it to Port Qasim where it is unloaded and regasified to enter the national gas grid.
Read more: The LNG scam?
A private company has a contract to receive this imported fuel, gasify it and then put it into the system. Capacity charges are guaranteed. If the sea is rough the vessel returns while the nation continues to pay. In the 2003-04 time frame the Planning Commission under Dr. Akram Sheikh formed an Energy Committee under the Chairmanship of Engineer Munawar Baseer Ahmad who was Managing Director (MD) of SSGC at that time.
I was inducted into this team to look at coal as a fuel option. MB as he was called moved fast. While a cost-effective imported LNG project was proposed called ‘Mashal’ together with expeditious mining of Thar Coal. Like the Sui discovery in 1952, this gift of nature at 175 Billion Tons is one of the largest deposits of the world. I visited Karachi in 2004 to meet the Provincial Minister of Mines urging him to form a mining company in the public sector with its head office in Karachi to extract this abundantly available fuel.
The only difference being that RLNG (Regasified Liquefied Natural Gas) is readily available while Rolls Royce cars are sold to qualified buyers only.
There was very little interest in mining, everyone wanted a quick fix to generate power and receive kickbacks in return. Finally, in August 2018 I stood at the open pit in Thar to touch the black gold which has now started to produce 660 MW of power. It was a dream come true. Fuel is the lifeline of the nation which should be taken seriously. For long term sustainability, affordability is important. While local gas sells at $ 5 to 6 per MMBTU, imported LNG at $ 11.34 is out of reach of the common man. In USA Shale Gas is available at $3.0, similar deposits have also been identified in Pakistan which should be exploited.
While coal still continues to be a major source of fuel, environmental considerations demand use of clean sources of energy. Most coal-rich countries are looking at producing SNG (Substitute or Synthetic Natural Gas) using this black gold. In North Dakota, USA SNG is being produced at a cost of $ 6-7 per MMBTU which is about 40% lower than our imported ‘Rolls Royce’ of gases. Rolls Royce has always been a car for the royalty and elite. There are about 15-20 of these luxury cars in the country mainly to own not to use.
Read more: LNG Accord: Are Pak-Qatar ties in danger?
The Nawab of Bahawalpur gifted one of his cars to the Saudi Monarch to introduce him to royal luxury when he visited Pakistan. Now that the State has ceased to exist, I wonder what happened to his fleet of expensive cars. In the nineties, IPPs (Independent Power Producers) were invited to produce power on very favourable terms. It was alleged that massive kickbacks were involved in making the power unaffordable.
WAPDA was forced to buy this expensive power and also pay capacity charges to the producers in case it was unable to utilize it. IPPs brought the public utility down, it was then decided to unbundle it. PEPCO was created for thermal power while NTDC was tasked for transmission. Today the Rolls Royce of gases is threatening three public sector entities (PSO, SNGPL, SSGC) while the private sector is making windfall profits. Serious fuel crisis will kick in if these entities fail. When the three MDs resisted to go along with the government plans, they were all removed. A serious fuel crisis was created in 2017 to bring the nation on its keens.
In the last about 40 years (1977 to 2019) most civilian institutions have been destroyed or dismantled. Instead of facilitation, exploitation has been the norm. Due to lack of planning, deliberate crises are created to create the opportunity for the individuals at the helm. Rolls Royce is good to own and admire but its ride is out of the reach of the common man. Perhaps a shared ride may be the answer, like a “Sawari Taxi”. Community Cooking Centers will have to be organized instead of individual connections as most utility bills are out of the reach of the masses.
Dr. Farid A. Malik is Ex-Chairman, Pakistan Science Foundation. The article was first published in The Nation and has been republished with the author’s permission. The views expressed in this article are the author’s own and do not necessarily reflect Global Village Space’s editorial policy.