Pakistan has sought financial and technical assistance from the United States for expediting exploration and production of the country’s natural gas resources as an alternate to the Iran Pakistan (IP) gas pipeline project.
An official source said that the demand was made during talks between the Finance Minister Dr Abdul Hafeez Shaikh and Special Envoy and Coordinator for International Energy Affairs, Ambassador Carlos Pascual, here on Wednesday. The US team, he said, raised concerns over the IP gas pipeline and warned that projects with Iran could invite sanctions from the United Nations (UN). They advised Pakistan to utilise its indigenous gas reserves instead of importing gas from Iran. The Pakistani side responded that the precarious energy situation in the country required urgent measures to bolster domestic supplies by either exploiting natural resources or through imports. Pakistan is faced with a deficit of two billion cubic feet per day (bcfd) of gas, while supplies have dropped to 4bcfd. The shortage of electricity has increased to 5,000 MW and long hours of load shedding are observed all across the country. This factor alone results in a loss of two per cent to the GDP per annum.
The US team was informed about the country’s tight gas reserves of 100 trillion cubic feet (tcf), and informed that it lacked required financing and technology to tap these reserves on fast track basis. The government estimates tight gas reserves of 34tcf and shale gas reserves of 76 tcf. The tight gas reserves are after the first rock formation of existing reserves while shale gas reserves are after the second rock formation. The challenge to recover these reserves lies in drilling that is done horizontally, not like prevalent vertical drilling. However, the US delegation did not reply to Pakistan’s demand and just noted down the proposal. A statement issued by the finance ministry said a US team led by Coordinator for International Energy Affairs, Ambassador Carlos Pascual, held talks with Finance Minister Dr Abdul Hafeez Shaikh. The minister emphasised technical support and shared understanding with US for the resolution of technical issues Pakistan is facing in the energy sector. He highlighted a number of areas with capacity for US investment, particularly in hydro-power, exploitation of coal reserves, and LNG projects.
Financial support is an important aspect of shared understanding for the implementation of certain power projects started in Pakistan and Islamabad’s narrative in terms of finance should be fully articulated in the US, he added. The minister briefed the US envoy about ongoing work being done by the cabinet committee on load shedding (constituted by the prime minister), and highlighted recommendations for resolution of the circular debt problem, hoping the issue shall be settled shortly. The minister said the government is committed to strengthening the energy sector for overall economic development. The government attaches tremendous importance to revamping the electric power sector through structural reforms including good corporate governance and strengthening of the regulatory system. He also highlighted the structural reforms process by the cabinet committees on restructuring and privatisation of public sector enterprises. He mentioned the reconstitution of the Board of Directors of state power generation and distribution companies, bringing corporate oriented personnel in to them, selected on merit from the open market. “This endeavour has started bearing fruits but lot more has to be done in this direction”.
During the talks the visiting team leader Carlos Pascual said America is fully committed to working with Pakistan in the changing political and economic landscape. He stressed Pakistan to indicate strategically targeted projects where US can come up with technical and financial support, and in this connection he also emphasised that ways and procedural matters be fully discussed as there is an investment involved of millions of dollars in it. The strategic dialogue between Pakistan and United States started in October 2009. US Secretary of State Hillary Clinton announced the signature Energy Programme in October 2009, followed up by phase-II of the programme in July 2010. The last energy dialogue was held on October 23, 2010, when then Secretary of State Coordinator for International Energy Affairs David L Goldwyn visited Pakistan, which led to US participation and involvement in many hydel and thermal power generation and rehabilitation of many thermal plants.
Pakistan seeks American investment in gas exploration
