By By Saad Hasan
Petroleum Policy 2008 will help expedite the exploration of oil and gas reserves after last year’s policy failed to generate any activity at a time when the country faced severe energy crisis.
The existing gas shortfall of more than 500 million cubic feet per day (mmcfd), which was previously projected to surface in 2010, has already pushed the government to talk of a strict gas-load management programme in the coming winter season.
The indigenously produced natural gas meets more than 50 per cent of the country’s energy needs and is a basic fuel used in the industrial sector, which will now have to run without normal supply for the next three months.
“There will be a complete blackout,” said Shafqat Elahi, former chairman of All Pakistan Textile Mills Association (APTMA) about the effects of proposed gas load-shedding. “Last year, I had to close my company for 45 days because of this.”
Gas load management had become a regular feature in the last few years during which, increase in its consumption outstripped production. From November to January, additional gas has to be made available for domestic consumers in Punjab and NWFP where it is needed for running water-geysers and room heaters. Industries in relatively warmer Sindh and Balochistan provinces have so far been spared from gas load-shedding.
As a precaution, companies often use liquefied petroleum gas (LPG) as an alternative. But the cost of installing tanks and LPG price make it unfeasible for many business concerns, especially those belonging to the struggling industry of textiles.
Rana Tauseef, another textile manufacturer in Punjab, says the price of LPG is too high compared to piped gas. “I have already made commitments to supply textile products. If I use it now, my cost will go up.” He said the government must start focusing on important economic issues like increasing exploration of gas reserves in the country.
Referring to the evaluation of the situation by APTMA, Elahi said that the import of liquefied natural gas (LNG) is the easiest solution to the problem as it could be channeled into integrated transmission and distribution system of gas utilities - SSGC and SNGPL.
Unfortunately, finalisation of the Mashal LNG import project is being continuously delayed on one pretext or another, people close to it said. While it seems inevitable that the gas shortfall will increase in the short to medium term, industry people are stressing on liberal petroleum policy to increase production and ensuring self reliance in future.
An official of Pakistan Petroleum Exploration and Production Companies Association (PPEPCA) which has propagated the need for a new petroleum policy said a better well-head price of gas could help increase its production.
“Around 1.3 BCF (billion cubic feet) was added to the system under the 1994 policy,” he said, naming Zamzama, Bhit and Sawan as some of the major discoveries. “This was because the price was not capped.”
Citing the case of Nigeria, he said international firms will ignore the security concerns prevailing here if they get a fair return. Exploration activity has been hampered by militant-led insurgency in the prospective areas of Balochistan and NWFP, which remain largely unexplored. It is not clear if the government will also address this issue in the new policy.