AccessMyLibrary provides FREE access to millions of articles from top publications available through your library.
Pakistan has substantial natural gas reserves and a current reserves-production (R/P) ratio of 31 years. The base-case scenario for natural gas consumption reveals that, with no new discoveries, these reserves can meet demand for the next 18 years.
Furthermore, the country enjoys a respectable success rate for natural gas exploration, and with the right policies in place, domestic reserves can be developed to fulfill the incremental gas demand.
The country's energy sector, particularly power generation, is heavily dependent on fuel oil. This dependence is seen as undesirable, because it is difficult for the already strained economy to bear the load of a rising fuel oil import bill, which has now reached $1 billion/year.
Natural gas is therefore the preferred option, and the government is pursuing a policy of substituting fuel oil with natural gas for electricity generation.
This article analyzes the general natural gas situation in Pakistan, focusing on its projected use, particularly in power generation. We forecast that a real annual gross domestic product growth rate of 4% warrants an annual increase of 5% in power generation, and with a moderate fuel substitution policy, natural gas consumption for power will grow at 8%/year. This translates into overall natural gas consumption growth of 6%/year.
The new discoveries in Pakistan have eliminated the need for gas imports via pipeline for some time to come. This has changed the geopolitical landscape in the subcontinent. On the one hand, Pakistan's role as a potential pipeline transit route is no longer related to its own internal needs, On the other hand, the assurances provided by the suppliers that, if Pakistan ever interfered with supplies to India, she would lose her own supplies too, has lost its political appeal.
For now, Pakistan can continue to develop its domestic reserves. The country may also find it preferable to explore the LNG import option, rather than pipelines, to complement domestic production or to supply possible shortages in the future.
Pakistan's economy has experienced increased turbulence in recent years. Before the economy could recover from the effects of post-nuclear test sanctions, it underwent another shock--the military coup. The military regime embarked on a drive to uproot corruption and undertake the process of enforcing proper documentation of the economy for taxation purposes.
Recent events--the war in Afghanistan and the India-Pakistan tensions-- add further uncertainty, and it is too soon to determine the impact of these events on Pakistan's economy
Removal of certain sanctions, increased financial assistance from developed countries, and the indication of European markets opening up for Pakistani exports will have a positive impact on the country's economy. On the other hand, however, factors such as increased war-risk insurance charges on Pakistani imports and exports have hurt it.
For the 2000-01 fiscal year, the agriculture-dependent economy experienced an unimpressive GDP growth of 2.6% because a negative growth of 2.5% in the agriculture sector counteracted part of the manufacturing sector's growth of over 7%. For the current fiscal year, the GDP estimate stands at 2.5%. However, in the energy sector, oil and gas consumption registered healthy …