Pakistan and fossil gas
Pakistan is the world's fifth largest country in the world with a population of 217 million people as of 2019. The GDP growth rate was 5.8% in 2018 and has averaged 3.8% for the 2007-2017 period. GDP is forecasted to remain around 5% in the near-term until 2025.
As of 2019, domestic natural gas makes up 34.6% of primary energy, with LNG imports having a 8.7% share of the energy mix. Due to rapidly growing consumption and depleting domestic reserves, Pakistan started importing LNG in 2015.
In August 2020, Pakistan announced that their new energy plan aims for 30% renewable generation, mainly wind and solar, by 2030, up from current levels of 4%.
In FY 2019, total electricity generation was 122,708 GWh and in FY 2020, electricity generation declined 1% to 121,867 GWh, mainly due to the economic slowdown resulting from COVID-19. Pakistan's Indicative Generation Capacity Expansion Plan IGCEP 2047 Main Report shows under the normal GDP growth rate assumption of 5.5%, electricity demand is forecasted to reach 237,996 GWh and peak demand is forecasted to be 43,820 MW in FY 2029-2030. By FY 2039-2040, electricity demand and peak demand are predicted to reach 394,338 GWh and 72,606 MW, respectively, under the normal GDP growth case.
Between 1998 and 2004, natural gas demand grew at an average rate of 17.5% per year. Low gas prices and subsidies resulted in growing demand in the power, industrial and residential sectors. Pakistan's generation capacity has been unable to meet demand in the last few decades. In 2004, supply/demand imbalances started and were managed by sector gas allocation and load shedding. Additionally, power supply cuts and shortages for the industrial and transportation sector are now common.
While installed generation capacity has increased from 23,337 MW in 2014 to 33,836 MW in 2019, Pakistan continues to face energy shortages of several thousand MWs especially in the non-summer months when hydropower output is low. A World Bank report estimates that the total economic cost of power sector distortions (unreliable electricity to industry and households) in Pakistan was US$17.7 billion in FY15, or 6.5% of GDP.
In winter of 2021, amid rising spot LNG gas prices and gas shortages, foreign traders of LNG cargo supply have defaulted and other bidders have been unable to deliver at original bid prices, causing the government to consider discontinuing gas supply to industries on a long term basis.
In January 2021, Pakistan suffered another nationwide electricity blackout, further exposing the country's energy infrastructure's weaknesses.
Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PLL) are the largest exploration and production company in Pakistan, with a 29.2% and 19.2% share of gas production, respectively.
Natural Gas Demand
The power sector accounts for one-third of Pakistan's natural gas consumption. The residential and industrial sectors also account for a large portion of gas demand. 
Key Demand Drivers
Natural gas use in the industrial sector is a major driver of gas demand in Pakistan.Gas use in the production of feedstock accounts for half of total gas consumed in the industrial sector. Due to gas shortages, some fertilizer plants (Agritec and Fatima Fertilizer) in Pakistan only get regasified LNG supply for 3-4 months of the year and are forced to close the remainder of the year.
Textile exports make up 60% of the country's overall exports.
In December 2020, Sui Southern Gas Company (SSGC) announced a one month gas fuel supply cut to non-export industries in order to meet gas demand for the domestic sector. Many industrial users have switched to alternative fuels including furnace oil and diesel due to the continued unreliability of gas.
Natural gas is heavily used in the transportation sector, with a high growth in NGV usage in Pakistan. Pakistan has more than 3.7 million CNG vehicles and 3,400 refuelling stations. However, in 2008 the government implemented a ban on construction of CNG stations and licensing of NGVs due to gas shortages.
Projection of Demand Growth
The Oil & Gas Regulatory Authority (OGRA) 2018-2019 State of Regulated Petroleum Industry Report, forecasts total gas demand of 6,938 mmcfd, or 71.7 bcm, for FY30. OGRA's forecast shows a gap in supply of 5,389 mmcfd, or 55.7 bcm, by FY2030, which can only partially be met by LNG imports, the TAPI pipeline (1,342 mmcfd, or 13.9 bcm, capacity), and Iran-Pakistan pipeline (750 mmcfd, or 7.75 bcm, capacity).
The OGRA forecast also shows demand increasing primarily in the residential and industrial sectors.
2020 Emerging Asia LNG Demand, Oxford Institute for Energy Studies (OIES) Report
The 2020 OIES Report forecasts gas demand to reach 51.11 bcm by 2030 and then decreases to 42.3 bcm by 2050. 
Natural Gas Supply
LNG imports began in 2015. In 2019, Pakistan had 33.9 bcm of domestic gas production. In 2019, Pakistan imported 11.8 bcm of LNG, with the largest quantity of 7.2 bcm from Qatar. As of 2021, there are four long-term LNG supply contracts totalling 6 mtpa of LNG.
Pakistan also buys a large amount of LNG on the spot market. The current winter 2020/21 gas shortage and high LNG prices have only exacerbated Pakistan's ongoing energy shortage problems.
Potential New Gas Sources
Pakistan has a large untapped shale gas potential. A study in 2015 by Pakistans Ministry of Energy concluded that Pakistan had 95 trillion cubic feet of risked recoverable reserves. However, geography, environmental constraints, security concerns, and low natural gas prices in Pakistan are challenges to development of these resources. Conventional gas reserves are estimated at 20 trillion cubic feet.
In July 2020, Pakistan discovered new oil and gas deposits in the Kohat district of Khyber-Pakhtunkhwa province. The discovery was made by state-owned firm, Pakistan Oilfields Ltd, at the exploratory well in Tal Block. Preliminary tests show 16.12 mmscfd.
In late 2020, Pakistan Petroleum Limited (PLL) discovered another gas field in Balochristian, with an estimated gas volume of approximately 1 trillion cubic feet.
Oil and Gas Development Company Limited (OGDC) announced in late 2020, a new oil and gas deposit discovered in Khyber-Pakhtunkhwa. Preliminary tests show 1.6 mmscfd of gas in exploratory well Siab-1.
In early 2021, Pakistan received bids for 15 out of 20 blocks in a second round of auction for onshore exploration rights. After a poor response to first round bids, the government decided to initiate a second round, but still did not attract many responses. 
Current Gas Supply Projects
Pakistan's domestic gas production comes from 42 onshore fields, mainly located in southeast and central Pakistan. Pakistan has an extensive gas pipeline infrastructure, with 13,000 km of gas transportation pipelines and 140,000 km of distribution lines.
Proposed Gas Supply Projects
Table 1: Proposed LNG Import Terminals in Pakistan
|Project Name||Location||Capacity||Expected Commencement Date||Sponsor||Project Status||Main Users|
|Energas LNG Terminal||Port Qasim||5.23 mtpa||2022||Energas, Exxon Mobil||Exxon Mobil pulled out of project in November 2020 but Energas continues|
|Fatima LNG Terminal||Port Qasim||5.23 mtpa||2022||Shell, Engro Elengy, Gunvor, Fatima Group|
|Tabeer Energy LNG Terminal||Port Qasim||5.23 mtpa||1st quarter 2023||Tabeer Energy||Tabeer Energy will not make investment decision until pipeline construction|
|Engro FSRU Expansion||Port Qasim||1.05 mtpa||Winter 2020||Engro Elengy Terminal, Excelerate||Awaiting government approval|
|Gasport FSRU LNG Terminal||Port Qasim||0.63 mtpa||December 2021||Gasport Consortium Limited, Trafigura|
Table 2: Proposed Gas Power Plants in Pakistan
|Project Name||Location||Capacity||Expected Start||Sponsor||Project Details/Status|
|Bin Qasim Power Plant 3||Karachi||900 MW||Late 2021||Siemens, Harbin Electric International||Proposed|
|Trimmu RLNG||Jhang||1263 MW||June 2021||PTPL||Proposed|
|RLNG OCGT||1577 MW||2028||"Candidate" Project in IGCEP 2047|
|RLNG OCGT||1129 MW||2029||"Candidate" Project in IGCEP 2047|
|RLNG OCGT||2162 MW||2030||"Candidate" Project in IGCEP 2047|
The North-Shore Gas Pipeline Project (NSGPP), is a proposed 1,100 km project, with a capacity of 1.2 bcfd, in collaboration with Russia in order to build additional LNG terminal projects and meet gas demand in Pakistan. It will transport gas from Karachi to Lahore. Pakistan will have the majority share in the project. Construction, which will be lead by a Russian consortium, is expected to start in July 2021. 
The Turkmenistan Afghanistan Pakistan India (TAPI) Pipeline, is a 56-inch diameter 1814 km pipeline project with a capacity of 1.3 bcfd. The TAPI pipeline has a target completion of 2024 and construction commenced in 2021.
The Iran-Pakistan Pipeline is a proposed 42-inch diameter 1880 km pipeline from Iran's South Pars field to Pakistan with a capacity of 7.8 bcm. As of early 2020, work on the pipeline had stalled due to international sanctions on Iran. Iran and Pakistan signed an amendment agreement extending the period of the project by 5 years.
Table 3: Proposed Gas Pipeline Projects in Pakistan
|Project Name||Capacity||Owner||Expected Start||Length (km)||Diameter (inches)|
|North-Shore Gas Pipeline Project (NSGPP)||12.4 bcm/yr||2023-2024||1100 km|
|Turkmenistan Afghanistan Pakistan India (TAPI) Pipeline||33 bcm/yr ||2024||1814 km||56 in.|
|Iran-Pakistan Pipeline||7.8 bcm/yr||TBD||1880 km||42 in.|
Projection of Gas Production
The Oil & Gas Regulatory Authority 2018-2019 State of Regulated Petroleum Industry Report forecasts total domestic gas supply of 1,548 mmcfd, or 16 bcm, and LNG supply of 1,299 mmcfd, or 13.4 bcm, for FY30. There is a large unmet gap in demand, that will most likely be filled by LNG imports combined with curtailing gas supply to power plants, industry users, and NGVs.
A 2020 Oil and Gas Industry Development Plan for Pakistan report showed that capacity additions of 929 bcf (26.3 bcm) of domestic gas supply and 2,260 bcf (64 bcm) of LNG gas imports are necessary in order to meet Pakistan's growing gas demand. This includes an additional 1,800 mmcfd, or 18.6 bcm, of LNG import capacity by 2030 and 4,800 mmcfd, or 49.6 bcm, of gas pipeline capacity from coastal areas to inland areas by 2030.
The 2020 OIES Report forecasts gas production around 21 bcm in 2030 and the remainder of demand, 30 bcm, being met by LNG imports. 
Articles and Resources
Related GEM.wiki articles
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