The government has failed to keep the power sector efficient and the result is that there is now considerable load shedding across Pakistan and particularly acute shortage of power and gas in Karachi.
An official with the power sector told Daily Times that as predicted by Prime Minister Imran Khan, the gas shortage will only increase all over Pakistan as the winter approaches.
“By 2013, Pakistan’s maximum power-producing capacity was 12,500 MWs, and piped local gas was about 3000 million cubic feet of gas per day (mmcfd). Over time gas production from fields depletes and our gas production was depleting too,” said the official on the condition of anonymity.
Former prime minister’s adviser Miftah Ismael also verified the fact.
“During our tenure we started gas production in 115 fields, a record, but almost all of these finds were small. We managed to keep supply in SSGC (1300 mmcfd) about the same but supplies decreased across the SNGPL network (from 1700 to 1300 mmcfd). Unless we find one or two new Sui-like fields, our gas production is expected to keep on decreasing. Hence the import of gas is the only viable option. (Gas is the cheapest & cleanest form of thermal energy so it’s better to import gas- Liquified Natural Gas, LNG- than oil. Given the non-uniform production of power from Hydro (summer months), Solar (at night only; storage in batteries is prohibitively expensive), and Wind (windy or summer months), we can’t practically rely on renewables for baseload. Thermal is the best option,” he said.
He added that his government increased power production capacity. “Pakistan can now produce, transmit, and distribute 25,000 plus MW hours of power. We set up some wind & solar and completed a lot of hydro based power –Tarbela 4, Neelum Jhelum, and Dasu. And set up 3600 MWs of gas & 4000 MWs of coal as a base. Our 3600 MW gas-fired plants have the lowest total, variable & fixed capacity cost per kWh. They are cheaper than plants set up in 1994 & 2004. This notion by PTI that they are expensive is just a ruse.
Also, two LNG import terminals in private sector with guaranteed tolling fee are functional, which according to Mr Miftah, are the two cheapest terminals in the world and although NAB jailed Shahid Abbasi and me for setting up an LNG terminal, it’s not been able to show a cheaper terminal anywhere on the planet. The LNG bought by Pakistan from Qatar in Jan 2016 was at 13.37% of Brent. In Feb, India bought more expensive gas. A year later Bangladesh bought more expensive gas. However, as prices were coming down, in 2017 we bought gas from Gunver and ENI for 11.6% & 11.99% for 5 & 10 years.
Again Pakistan bought the cheapest long-term (LT) gas from Qatar at 13.37% and there isn’t a single cheaper LT contract before that. Also PTI wasted the golden opportunity to do a LT contract for gas when oil and gas were at historic lows.
When contacted, a spokesperson for the Petroleum Division said that presently the terminals are running at full capacity and more LNG cannot be moved from Port Qasim to Parkland, from where the distribution network of SSGC draws its gas.
The same situation will happen in December and January. So to bring in more than 1200mmcfd, this 17km line is essential.
“There is sufficient capacity to move gas upcountry for now. The same will happen in December and January,” he said.
The spokesperson added that during 2013-18, not a single oil & gas block was awarded by the then government. “The 115 discoveries which were made during that time resulted due to blocks auctioned by previous governments.”
The incumbent government auctioned 10 blocks last year and is going to auction 20 new blocks in next month & more offshore blocks in December.
This step will accelerate the process of exploration and production activities in the country.