Country needs quick fix to avert winter gas crisis

ISLAMABAD (APP): International power politics, Russia’s Ukraine attack and after effects of Corona pandemic have landed many countries in an arena of energy shortage with countries booking their quota for winter season in advance.
Both the developed and the developing countries are in a struggle to steer out from this crisis with recent months hike in petroleum and gas exerting extra pressure on economies and people across the globe.
Pakistan is no exception to the global energy crisis which is worsening with each passing day and there is dire need for a quick fix to the problem in view of previous government’s failure in materializing contracts with international gas suppliers at an appropriate time and affordable prices. The country largely depends on imported gas as its own natural reserves are depleting at the rate of 10 per cent annually and the international market is short of Liquefied Natural Gas (LNG).
The domestic gas extraction varies around 3.5-7 Billion Cubic Feet per Day (BCFD) against the demand of 8 BCFD and it is difficult for any government to meet domestic, commercial and industrial sectors’ needs efficiently. Besides, it is a harsh reality that Exploration and Production (E&P) companies, operating in potential areas, made no major discoveries for long. The situation continued to worsen despite claims of the respective governments to overcome this problem. The experts believe that in present circumstances LNG and LPG could be the immediate remedy to fill supply and demand gap, besides successful execution of Iran-Pakistan (IP) and Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline projects.
Meanwhile, Minister of State for Petroleum Dr Musadik Malik has cautioned that arranging LNG for the peak winter needs will be a big challenge. “It is unfortunate that the PTI government did not procure the LNG cargoes, available last year at reduced rate of $4 per MMBTU (Metric Million British Thermal Unit) for 2-4 years.” “Today we are bearing brunt of their negligence of not signing long-term agreements with LNG exporters as the international market is sluggish in responding to our tenders even on increased price,” he added. He said when we approach exporters, they question us why we had not signed contracts for LNG import when the entire Europe was making deals for purchasing cheaper gas during last winter. “We are left speechless to defend our position for a blunder committed by the incompetent PTI government,” he said. “It seems that previous rulers were least bothered to purchase gas for days ahead.”
But, he said, since we have to cope with this challenge, our government is exploring all avenues to secure LNG quota for meeting domestic demand during the peak season.
“We are reaching out to all [potential] countries for buying gas either through pipelines or Liquefied Natural Gas (LNG) cargoes to meet the ever-increasing gas demand of the peak winter season,” he said.
Gauging the situation carefully, it is not only a supply and demand issue but also a serious governance issue of the previous government. If we compare the PPPP and PTI government tenure with the PML-N, we see a relatively better performance of the PML-N government during its 2013-18 tenure. The PML-N government during its previous tenure not only established two fast-track LNG terminals but also set up a public sector company – Pakistan LNG Limited (PLL), making a true calculation of the country’s future energy needs.
Since then, the two LNG terminals are injecting around 1,200 Million Cubic Feet per Day (MMCFD) of gas into the national transmission lines for supply to consumers at the networks of both state-owned companies – Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC). Its (LNG’s) significance can be gauged from the fact that the PTI government despite all criticism and blame game against the PML-N government’s LNG import-related decisions continued toeing the policy of its arch-rival.
In pursuance of the same policy, the Imran Khan-led government granted licenses for the establishment of more LNG terminals and the commodity’s import besides signing another government-to-government LNG import agreement with the government of Qatar.
According to statistics around 670 MMCFD gas was available on the network of Sui Northern Gas Pipelines Limited (SNGPL) for the consumers against average winter demand of 1,170 MMCFD for Punjab and Khyber Pakhtunkhwa alone.
Cognizant of the situation, the coalition government is making all out efforts to exploiting indigenous hydrocarbon resources for achieving self-reliance in energy sector. Therefore, a plan was being worked out to provide incentives to both local and foreign exploration and production (E&P) companies to step up drilling activities in potential areas across the country. “An effective package of incentives will be offered to them (companies) as making new discoveries, and extracting oil and gas with modern machinery is the need of the hour,” said a source privy to energy development sector. Besides, he said, the government was working on an effective plan to introduce a deregulation policy to ensure an environment of competition, providing a level-playing field for everyone. “There will be no monopoly of anyone,” he said, the government would extend maximum facilities, under the ease-of-doing-business strategy, to those who wanted to do business in the oil and gas sector.