Wednesday February 21, 2024

Pakistan seeks energy partnership with Central Asia

June 22, 2023

ISLAMABAD: Pakistan is actively seeking to establish a partnership with Central Asia, particularly Turkmenistan, in the energy sector and facilitate the supply of Turkmen gas to the port of Gwadar, transforming it into an international energy hub.

Pakistan’s objective is to attract investments from China, Europe, and other regions to establish liquefied natural gas (LNG) plants in Gwadar, with the intention of exporting LNG to their respective countries and other areas with high demand, Musadik Malik, the State Minister for Petroleum, expressed these views on Wednesday here.

The Pakistan government has extended an invitation to Turkmenistan to explore the possibility of gas connectivity from the Chaman border to Gwadar. Additionally, there are plans to construct LNG terminals in Gwadar, which would expand gas supplies to Europe and the global LNG markets.

“We want to be the trading partner of Central Asia, as it is the world energy capital. We have given a proposal to bring gas through a pipeline to Pakistan. There are huge gas reserves in Turkmenistan, almost equivalent to that of Qatar,” Malik said, adding, “We offer to the world to come and establish their LNG plants at Gwadar, especially China and Europe to invest in this sector and export it to other countries.”

Pakistan is the most viable route for the supply of gas from Turkmenistan to other parts of the world, he said.

While addressing concerns circulating on social media, the minister refuted claims suggesting that Russian crude oil originated from India. He acknowledged the need for short-term and long-term LNG supply agreements over the next two to three years, anticipating a potential surplus due to the expected increase in pipeline supplies of LNG, provided the situation in Ukraine stabilizes.

In the coming years, Qatar plans to bring one-third of its total production online by 2026-27. North America’s Henry Hub deliveries have already commenced to Europe, and there is also an increasing inflow to Asia. The UAE is also making efforts to enhance its LNG production capacity in response to the growing global demand for gas. ADNOC, the UAE’s energy group, has announced plans to double its LNG production capacity, aiming to meet the rising gas demand worldwide.

Furthermore, ADNOC Gas has signed a new three-year LNG supply agreement with TotalEnergies, with an undisclosed value estimated to be worth around US$1-1.2 billion. Starting in 2023, the agreement will facilitate LNG deliveries to TotalEnergies’ global markets, focusing primarily on Asian markets.

Regarding Pakistan’s petroleum imports, the minister stated that half of the imports consist of crude oil, while the other half comprises refined oil. Pakistan intends to import one-third of its crude oil from Russia, with the remaining two-thirds sourced from Arabian Light.

It is worth noting that the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas Project is already in progress.

The project aims to transport natural gas from the Galkynysh gas field in Turkmenistan to Pakistan via Afghanistan. Once completed, it is expected to reduce Pakistan’s supply-demand gap by up to 1.3 billion cubic feet per day (bcfd).

Since, Pakistan is not getting finances from the multilateral donors for TAPI project, if Europe and China come into the LNG sector in Pakistan, it will help the arrangement of financing from the World Bank/Asian Development Bank and others.