Energy security and development
importance of energy secu rity in the industrial and overall development of a country can hardly be overemphasized. It is believed that the energy crisis gripping the country for well over a decade has affected the growth of our GDP by at least 3% annually, besides causing inconvenience and sufferings to millions of households across the country. The present government which won the franchise of the people in the 2013 general elections owed its triumph to its pledge to overcome the energy crisis and revive the economy, which was in complete shambles.
An incisive glance at the efforts of the government during the last three years in regards to tackling the energy crisis and reviving the economy indeed reveals encouraging trends. The economy more or less has been put on the right course. A rare commitment has been shown in tiding over the energy crisis through discernible and credible measures. A number of energy producing projects have been initiated which are likely to take the country towards energy security by the end of 2018.
The most significant and early harvesting project coming on stream is the import of LNG from Qatar. Our national scene is so dominated by political squabbles that such developments hardly get the attention and acknowledgement that they really deserve. According to the deal with Qatar which has a time-span of 15 years, it will supply LNG worth $1billion per annum to Pakistan. It is noteworthy to mention that the price agreed for gas is much below the gas price negotiated for TAPI and IP Gas.
The importance of the agreed deal can be better understood by having a look at the ground realities in regards to power generation in Pakistan. Presently more than 50% of current total energy mix of Pakistan is based on natural gas. Pakistan’s constrained demand for natural gas is 6000 MMFCD against a supply of 4000 MMFCD and the unconstrained demand is estimated to be 8000 MMFCD. Over the last ten years production of gas in Pakistan has remained stagnant at 4000 MMFCD and the new gas discoveries have barely kept pace with natural depletion of existing gas fields. The government has already completed one LNG terminal at Port Qasim to handle the imports and the second one is in the process of being built. More terminal are planned to be built in the near future. An agreement with Russia has already been signed for the construction of a gas pipeline between Lahore and Karachi with an investment of $2billion. The import LNG has already started creating its impact. For the last two month the industrial sector is getting uninterrupted supply of gas and the govt reportedly is also mulling possibility to lift ban on new gas connections for industrial sector.
LNG imports from Qatar reportedly would meet 20% gas requirements of the country. In terms of impact, it is estimated that it would help in the generation of 3000 MW of electricity at much cheaper rates; it would revitalize the fertilizer and other industries, eliminate load shedding for domestic consumers besides reviving the fortunes of the CNG industry. The supply of gas to the CNG industry would not only protect an investment of Rs.450 billion made in the sector but would save thousands of existing jobs in addition to creating about one million new employment opportunities. The supply of gas to CNG stations would also help in reducing transport fares, provide substantial savings to the users of petroleum products and play a significant role in checking the unbridled inflation, creating overall healthy impact on economic situation of the country.
In view of foregoing developments made possible by an unswerving commitment of the present government and the energy producing projects launched under the CPEC with a cumulative electricity generating capacity of 10,640 MW, likely to come on stream by 2017-18, the prospects of tiding over the energy crisis as well as making Pakistan an energy secure country in near future look almost certain. It is said that credit must be given where it lies.
The PML (N) government in pursuance of its electoral commitments has exhibited unparalleled commitment in dealing with the energy shortages and reinvigorating the economy through prudent economic management, which has been duly acknowledged the world over.