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Thursday March 28, 2024

Gas deficit will widen up to 6.6 bcfd by 2029-30: Ogra report

By Khalid Mustafa
February 12, 2018

ISLAMABAD: In the wake of ever increasing demand of gas, Pakistan is projected to face gas deficit up to 3.9 billion cubic feet per day (bcfd) by financial year 2019-20 and the gap will widen further up to 6.6 bcfd without the imported gas by 2029-30.

This has been revealed in the 15th report titled with State of the Regulated Petroleum Industry presented by Oil and Gas Regulatory Authority (OGRA) for fiscal year 2016-17.

The government of Pakistan, the report mentioned, has initiated various measures to bridge the gap between demand and supply which includes incentivising of local gas production, import of natural gas in the form of liquefied natural gas (LNG) and cross country pipelines from Iran and Turkmenistan.

It says that development of two LNG handling terminals (each having re-gasification capacity of 650 mmcfd at Karachi Port is a major milestone achieved to mitigate gas shortages in the country.

Appreciating the government’s efforts in importing re-gasified liquid natural gas (RLNG), it says that during financial year 2016-17, total supply of natural gas in the country, including imported RLNG, has reached 4,131 mmcfd. It also tells that there is a significant rise in demand and consumption of gas by residential and domestic consumers owing to price differential vis-à-vis other competing fuels such as liquefied petroleum gas (LPG), firewood and coal.

On average, during the last five years, more than 0.3 million consumers were added or connected to the gas network, annually by the gas companies. The positive growth of sectors, such as power, commercial, residential and fertiliser has resulted in natural gas availability constraint. The demand for natural gas will further increase in the coming years.

During the period under review, the report points out, power sector (including captive power) has remained the main consumer of gas, accounting for around 43 percent share followed by residential and fertiliser sectors with a share of 21 percent each.

Province-wise gas consumption shows that Punjab and Sindh have remained the major consumers with shares of around 47 percent and 43 percent respectively, whereas on production front, Sindh, Balochistan and KP contributed 56 percent, 13 percent and 12 percent shares respectively. The share of RLNG in the gas supply was 16 percent. Pakistan has a well-developed and integrated infrastructure for transmission and distribution of natural gas.

About the gas pipe network in the country, it says, SSGCL and SNGPL increased their transmission network by 337 km and 697 km and distribution network by 760 km and 6,700 mm respectively for providing gas to distant localities and added more consumers to the gas network.

As of June 30, 2017, SSGCL and SNGPL’s cumulative transmission network stood at 3,973 km and 8,975 km and distribution network at 45,521 km and 110,217 km respectively. The two utilities provided new gas connections to 486,418 consumers. The cumulative consumer base of both the companies as of June 30, 2017 stood at 8,575,760.

The size of LPG market during the period under review was 1,209,420 metric tons, mainly consumed by domestic, commercial and industrial sectors with respective shares of 37 percent, 36 percent and 27 percent.

It says that LNG is presently contributing nearly 47 percent in Pakistan’s primary energy supply mix. In view of the natural gas demand supply gap, the government has introduced LNG Policy for potential investors to facilitate the successful implementation of LNG import projects.

It also informs that the consumption of petroleum products registered a growth rate of 9.7 percent (26 million tons) during FY 2016-17 compared to previous year’s growth of 5.2 percent (23.7 million tons). During the year, main drivers of increased consumption were transport and power sectors, which registered high growth of 12 percent and 10 percent respectively as compared to FY 2015-16.

The consumption of motor spirit in transport sector witnessed an increase of around 16 percent during the period under review. This increase may be attributed to rising demand of transport sector, particularly the growing number of motorcycles and cars and partially to the lower prices of MS. Similarly, consumption of high speed diesel (HSD) grew by 10 percent compared to previous year mainly on account of higher utilisation by transport sector indicating increased economic activity in the country.

Transport and power sectors consumed almost 90 percent of total petroleum oil lubricant (POL) in the country, with 57 percent and 33 percent shares respectively. The Pakistan State Oil (PSO), the report says, remained the lead player in total energy products supply to the consumers with 55 percent market share. The PSO was followed by Shell with 9 percent, Attock Petroleum Limited (APL) and Hascol Private Limited (HPL) with 8 percent each.