Govt pins hopes on imported gas to end energy shortfall

LAHORE: The government pins hopes on imported gas supplies to meet the growing energy shortfall in Pakistan in the next three to five years, a minister said.
“With the gradual addition of about four BCFD (billion cubic feet/day) gas from external sources as per the plan, it is highly likely that chronic shortages of gas will largely come to an end,” Shahid Khaqan Abbasi, Federal Minister for Petroleum and Natural Resources said.
“However, with continuous increase in its (gas) demand, there will be a need of further addition in supplies.”
Comparing cost of available options, Abbasi said, per unit cost of liquefied natural gas (LNG), Turkmenistan-Afghanistan-Pakistan-India (TAPI) and Iran-Pakistan (IP) gas, as per present day estimates of gas prices, will almost be the same – around $8-9/unit.
However, he admitted that cost of imported gas will be more than double the price of locally produced natural gas.
Despite relatively high cost of imports, re-gasified LNG and Iran and Turkmenistan gas will be cost-effective options if compared with other competing fuels, he said.
“By integrating supply of imported gas with our network we will largely be able to do away with chronic shortages of gas in the country,” he said.
Pakistan presently faces natural gas shortfall of about 2 BCFD, while it is likely that the deficit will reach to 3-4 BCFD by 2018-2020.
Abbasi said work on both the Iran and Turkmenistan pipelines is scheduled to start in 2015.
“We have succeeded in breaking the stalemate and first LNG terminal has already been completed while work on two remaining terminals is expected to complete within next two years,” he said.
He said Pakistan needs to plug in gas demand-supply gas from local and external sources as infrastructure in this regards is already in place, which is one of the biggest gas transmission and distribution networks in the world.
“Unlike other regional countries, we are blessed with this asset of extensive gas pipeline network that helps supply gas to almost every area of the country,” he added.
“We expect groundbreaking of IP and TAPI projects in October and December this year respectively. IP will be scheduled to complete in 30 months and TAPI is expected to take about four years to complete.”
TAPI gas pipeline project is expected to be completed by end of 2019. It will provide 1.325 bcfd each to Pakistan and India, he said.
On the other hand, IP gas pipeline will inject about up to one bcfd while the three LNG terminals will add up to two bcfd gas to the system, he added.
However, he cautioned, many external factors could affect work on trans-national gas pipeline projects, especially the due to geopolitical situation in the region.
As of today’s projection, despite the shaky situation in Afghanistan, Abbasi said, investors are upbeat about completing the TAPI gas pipeline in war-torn Afghanistan as per schedule.
“We are also in the process of accelerating exploration of local gas through conventional and non-conventional means. One such intervention is to prepare an incentivised policy framework for tight and shale gas reserves,” he disclosed without elaborating further details.
To another question about increasing capacity of the domestic transmission network, the federal minister said work on augmenting capacity of the transmission pipelines at a cost of over three billion has been initiated to ensure smooth inflow of anticipated supplies of gas.