Energy self-reliance is the only way for a sustainable Pakistan
The much anticipated LNG sales and purchase agreement between Qatar and Pakistan was finally signed in Doha putting to rest the periodic hints and leaks in the media of what it may contain.
It was a bit amusing to see that even the tell-tale title of the agreement failed to deter our federal government from trying to spin this sales and purchase agreement as a “project” or a “deal” where Qatar would “provide” huge relief LNG supply to our country, much like free earthquake relief.
Also it was highly doubtful if our awam were actually fooled by such PR campaign knowing full well that the agreement bound Pakistan to buy and import LNG for at least 15 years or more with the country’s total payment liability of $16 billion or more, that payment not in rupees but in hard foreign exchange.
Neither the feeble efforts of the government to distract people from this harsh reality by signing some useless MOUs with Qatar were taken seriously by any one.
But the die has been cast, the Qatar LNG purchase deal is now a fait accompli, a done deal. The question now is what’s to be done after this deal, besides the nation dishing out a hefty sum of dollar one and a half billion each year.
The Qatar LNG deal is at best a stop-gap measure that has some justification in view of the urgency to bridge the immediate, burgeoning and crippling gap between demand for gas that our power, industrial and residential consumer sectors desperately need and the diminishing supply of natural gas from domestic fields. The negotiated LNG price and terms seem fair and reasonable.
But as one who has been actively involved in the front line of Pakistan and international oil and gas industry, I can confidently state that the future viability and security of meeting long-term energy needs of our country on a permanent basis lies in exploration and development of natural gas from within the country.
The spoon feeding of this imported, readymade gas, so to speak, must not make us complacent and ensconce our decision makers into a false sense of energy security.
We have to look no further for such approach than the objective of 2012 Pakistan’s Petroleum Policy that expressly mandates “to secure the energy needs of the country by enhancing domestic exploration”.
The reasons for the imperative of domestic exploration, production and supply of gas (and oil) are many; some of them can be highlighted again.
First and most obvious reason is the huge monetary saving that would result from production and supply of natural gas from our own domestic resources rather than having to pay year after year the dollar cost of imported gas.
Secondly, supply of gas from our own domestic resources would go a long way in enhancing our national security and buttressing our energy self-reliance and energy independence.
On the other hand, relying on long, foreign supply lines to fulfill our energy needs is a much riskier proposition since we will have no control over such external lines which would be susceptible to disruption any time in the event of foreign conflicts or any international inflections.
Thirdly, exploration and production of natural gas from our significant gas deposits in Sindh and especially in Balochistan’s Kohlu, Zamardan and other western blocks, which according to the Petroleum Policy have Zone 1 high prospectivity with significant recoverable gas reserves of at least 30 tcf, would necessarily develop nascent infrastructure of roads, bridges, pipelines, infuse technology, create technical and management jobs in the region.
Fourthly and perhaps most importantly, such resultant economic boom in Balochistan or Sindh would ignite political integration and cohesion of the alienated provinces, especially Balochistan, giving it a sense of ownership, a sense of belonging in the country.
Of course the question then arises how to initiate and implement this exploration, development and production activities in these provinces. This endeavour will primarily require our federal and provincial governments to adopt proactive measures that would fulfill crucial pre-conditions, such as evanescence of terrorism, insurgency and violence, establishing an atmosphere of peace and harmony and overall security of life and property in this region.
Additionally, before any investment, foreign or domestic, for petroleum exploration can even begin to materialise, prevalence of an energy-friendly, efficient bureaucratic regime, a streamlined, enabling regulatory framework and generous financial incentives are essential.
Moreover, we must also keep in mind that according to estimates Pakistan has tremendous quantities of shale gas trapped in our geological reservoirs that is waiting to be exploited. Our conventional exploration and production efforts will get us ready when the cutting edge shale technology and investment comes knocking on our doors.
Of course, challenges to the governments to realise self-reliance in energy through production and supply of domestic gas would be formidable and corralling them successfully would indeed be a daunting task. But we must not cringe from our efforts or dilly-dally because the stakes are too high. They touch upon the prosperity and the very future of our country.
Very important analysis by Attorney Kamal Saheb. Must read for all and especially for our lethargic PMLN Govt. . PM Nawaz Sharif must follow up the critical proposals here. Very important for our energy and power needs of the country. Thanks .
Very good analysis with all substance and style.. The author with his extensive petroleum expertise has merit in his opinion and advice to the government and to the country. Indeed LNG is very expensive, poor country like Pakistan can ill afford, instead it should rely on producing and exploiting our own tremendous deposits of oil and gas, with so many advantages as the author has rightly pointed out. Hope the government is listening and take these measures urgently.
WE fully agree with the learned writer. Yes LNG purchase is only a temporary step. Pakistan must explore and produce its own gas. Excellent idea in this analysis. Thanks. Pak authorities should follow these guidelines to make the nation self sufficient in energy.
Pakistan's LNG deal with Qatar was not good for the country. Country is bankrupt, from where it will pay billions of dollars. The best way forward is to produce our own gas from Balochistan huge deposits. Correct and excellent argument by Mr Kamal. Pakistan rulers in power must abide by these steps, the only option.
Agree Sir. Great views and assertion. Pak must invest along with multinational oil and gas companies in developing our natural gas. Its amust. govt must start initiating this without delay. Also important for peace in Balochistan.
Thanks for this learned and I must say very timely opinion. Self reliance on gas is crucial for our nation, for development and economic progress etc..The author has given excellent arguments, the rulers, lazy and corrupt, must follow this advice.
There is frankly no insight in this article other than stating the obvious. We all understand that domestic production of our energy needs is the ideal. But in the absence of that, an LNG supply deal was the fastest, most effective solution to the existing gas crisis. The government should have acted faster to secure a deal and that if anything is the disappointing aspect of the it's performance. Nevertheless, I give high marks to the Minister for his clear headed thinking and standing gamely to face all sorts of negative agendas and misinformed criticism.
@shahidpracha. I don't think you have closely read this analysis or if you have then you clearly fail to comprehend it. Its not that difficult to understand. The writer agrees that there was justification for this deal but that buying and importing LNG is both expensive for a dollar-strapped country like Pakistan and in any case it is not a permanent solution to Pakistan's energy needs and problems. Although the writer did not say but this deal smells of corruption, it cannot be ruled out. We all know Saif ur Rehman and Nawaz Sharif's shady connections with Qatar..This is one of the most corrupt regimes along with Zardari's in the history of our country. Do you deny this? This PMLN regime is also extremely inept, inefficient and dumb. But if this LNG deal as you say was the best and fastest solution to country's energy problems, why it took NS and his stooges so long to execute this deal? Secondly if as you say that the Govt knew that "domestic production of our energy is the ideal" solution, then what steps the NS govt has ten in this direction of domestic production since coming into power? Not a single correct step .
@Rizvi After discussing the Qatar LNG transactions with various parties involved I can conclude that the inept, clueless PMLN Govt has made a complete mess of it, there are no pipelines to transport this gas, no end use buyers have agreed, no adequate port facilities for storage, regassification, etc, etc…completely incompetent, it would be a big loss….good article indeed
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