Evolving LNG/RLNG Regime in Pakistan and the National Energy Security

Abdul Basit Qureshi

doi:10.13169/polipers.15.3.0119

Abstract

With economic growth, the demand for natural gas as a fuel has increased recently, while its supply has seen decrease. The demand is projected to further increase and the country's currently known recoverable indigenous gas reserves are insufficient to meet this demand. Gas shortages have already emerged and shall increase substantially in the following years if indigenous supply is not supplemented through imports. This paper aims to review the regulatory framework of LNG/RLNG for creating enabling environment for import, re-gasification, sale and marketing in Pakistan. The focus of this paper is on the supply side of energy, public and private gas utilities relation with respect to LNG, natural gas market liberalization, and its comparative analysis with other fuel prices. In the short term, without importing LNG to the tune of about 800 - 1.2 MMSCFD, the demand-supply gap of the energy in Pakistan would have been much more than it is today. Irrespective of its price, however, LNG is the only short-term solution in augmenting energy supplies.

Highlights

For the last two decades, Pakistan has been faced with severe energy shortfall
TAPI (Turkmenistan-Afghanistan-Pakistan-India) and India gas pipeline (IPI) (Iran-PakistanIndia)2 mega projects were initiated for importing gas from countries in the neighborhood through cross-border gas pipelines but physical
Progress could not reach appreciable levels on account of different geopolitical and economic reasons. With this in view and to keep the wheel of the industry in motion, in 2014, the Government of Pakistan embarked upon import of liquefied natural gas (LNG) (Liquefied Natural Gas), re-gasify it to create RLNG and inject it into existing pipeline network of the gas

Summary

Introduction

For the last two decades, Pakistan has been faced with severe energy shortfall. Natural gas plays a key role in Pakistan’s energy balance and constitutes around 34% of the country’s primary energy supplies. With accelerating economic growth, the demand for gas is projected to increase manifolds, whereas the country’s currently known recoverable indigenous gas reserves are insufficient to meet this demand. Progress could not reach appreciable levels on account of different geopolitical and economic reasons With this in view and to keep the wheel of the industry in motion, in 2014, the Government of Pakistan embarked upon import of LNG (Liquefied Natural Gas), re-gasify it to create RLNG and inject it into existing pipeline network of the gas. Under the light of current energy supply-demand, strategic location and Pakistan’s significance in the region, energy security in Pakistan’s context can be defined as: “Sustainable, sufficient, uninterruptible, strategic, contractually binding, energy supply arrangement backed by sustainable bilateral diplomatic relations between the participating states.” Notify this reasonable level of understanding with respect to the concept of energy security allows us to look into the specific dynamics of liquefied natural gas. Disclosure: A Case Study on Petroleum Industry of Pakistan” World LNG Report

15 Ibid-p 9

Findings

Conclusion