There is considerable potential in renewable energy sources like wind and solar power
his winter, there was a major gas shortage in many parts of Pakistan, leaving residents with no choice but to use alternate fuels like LPG, coal and wood to heat their houses. The winter, when the demand for electricity is at its lowest, was made worse by increased load shedding due to the natural gas shortfall.
Due to declining domestic gas supplies, Pakistan has relied primarily on imported liquefied natural gas (LNG). Every winter there is a significant spike in gas demand, particularly in Balochistan’s snow-covered northern regions and in the Punjab and Khyber Pakhtunkhwa. This year, the Russia-Ukraine war made the imports unpredictable.
Pakistan imported $3.078 billion worth of LNG during the first eight months of the current fiscal year (ending on February 28). This marked an increase of $1.499 billion over the same period last year.
Gas supply from Russia to wealthy European nations remained lower this winter. The Europeans therefore turned to Gulf suppliers. This raised the LNG prices globally.
Pakistan has a long-term LNG import contract with Qatar. However, it became harder for Pakistan to purchase LNG for the rest of its needs from its regular Gulf sources.
The rising price of LNG in the global market was a major factor in the failure of several foreign LNG shipping companies to deliver their cargo to Pakistan. Pakistan Petroleum Limited, a government-owned company, issued a request for proposals in August 2022 for the supply of at least 72 LNG cargoes from foreign providers for the years 2023 to 2028. On the final date for submission and opening of these bids in the first week of October 2022, not a single bid had been received.
Eni SpA and Gunvor Group Ltd, two significant conventional LNG suppliers, also had at least two cargoes cancelled. They also anticipate delays involving deliveries in March, April and June.
Gas shortages led to decreased textile exports, which are important to Pakistan’s dollar-based export economy. They also resulted in frequent power outages and load shedding in most parts of the country. This hurt businesses as well as households.
Pakistan has witnessed electricity shortages despite having adequate installed capacity. Almost 45 million people in the country are not connected to the energy grid. Those who are, are subject to load shedding. When it comes to providing its residents with reliable electricity, Pakistan is ranked 110th out of 135 nations.
Pakistan uses coal, nuclear power, hydropower, furnace oil and natural gas to produce electricity. It depends heavily on imported oil and gas, which exposes it to price changes and supply disruptions. Pakistan’s energy demand is estimated at around 25,000 MW against a supply of 22,000 MW, leaving a 3,000 MW gap. The gap widens in summer when electricity demands peak in most areas.
Pakistan depends mostly on natural gas to produce electricity. When LNG is in short supply, it affects domestic power production as well. By 2030, Pakistan’s gas reserves are predicted to be exhausted. New discoveries won’t be enough to meet the country’s needs.
Pakistan has risen to sixth place in the global LNG Build Out due to its extensive use of natural gas in key sectors including the fertiliser, cement and textile industries. Even though further LNG terminals are planned, they are being delayed due to strong opposition from the environmentalists. Pakistan has so far completed two LNG terminals with an annual handling capacity of 10.4 million tonnes.
Environmentalists and climate change activists contend that despite its acceptance as a viable substitute for other fossil fuels like coal and furnace oil, LNG is not eco-friendly. The environmental advantages of LNG over other energy sources, such as lower carbon emissions and consistent support for renewable energy, are frequently emphasised. Some specialists in climate change dispute these claims and point out risks like methane leaks and sulphur oxide.
Zeenia Shaukat, director of The Knowledge Forum, a local think tank advocating against fossil fuels, says methane gas leaks during the transfer of LNG in pipelines at the terminals could affect the overall ecology of the coast, especially mangroves along the coast of Karachi.
She claims that “mangrove forests are rapidly disappearing due to industrial and municipal pollution and the cutting of trees for industrial and commercial activities. Future LNG installations could severely harm the remaining ones.”
It has also been argued that LNG is now too expensive for Pakistanis. Government officials are now focusing on locally available fuels like coal and renewable energy sources, such as solar and wind.
Prime Minister Shahbaz Sharif recently opened a coal-fired power plant in Tharparkar, set up with Chinese investment.
In Block-I of the Thar Desert, Chinese Shanghai Electric is funding two 660 megawatt coal-fired power stations. A 7.8 million tonne per year integrated coal mine and power plant are included in the Chinese-funded project. The Shanghai Electric power plant was connected to the national grid on December 5. It is to produce 2,640 megawatts of electricity using domestic coal.
At the K-3 nuclear power unit’s opening ceremony at the Karachi Nuclear Power Project on February 2, the prime minister declared that Pakistan will build no new power plants dependent on imported coal, LNG or furnace oil.
He said the country needed cheaper alternative energy sources to reduce its $27 billion energy import bill. The prime minister has already approved a project to produce 600 MW of electricity from solar energy to be set up in the Punjab. Bidding for the project will be held next month, Energy Minister Khurram Dastagir Khan has said. He says there is considerable potential in renewable energy sources like wind and solar power to meet Pakistan’s electricity demand.
The minister says Pakistan will increase its coal-fired power capacity by four times in the medium term and no longer wants LNG imports to be a part of its long-term energy plan.
The writer is a senior journalist, working for a news channel in Karachi. He can be reached at shuja98gmail.com