Pakistan’s Energy Balances

Pakistan’s Energy Balances: Pakistan’s primary commercial energy supplies are dominated by oil and gas, contributing roughly around 80% of total energy supply mix. The share of each source in primary energy supplies for 2014-15 was: Natural Gas (43%), Oil (36%), LPG (0.6%), Coal (7%), Hydro (11%), Nuclear (2%), Renewables and LNG (1%) and imported electricity (0.1%). The encouraging thing in the last fiscal year was addition of newer fuels in the primary energy mix such as LNG, wind and solar which did not feature significantly in prior energy balances of the country.

The balance recoverable reserves of natural gas as of FY2015 remained 20.26 TCF whereas the production remained a 1.4 TCF, showing R/P ratio of 14.5 years. There is significant rise in demand for natural gas as it has always been the fuel of the choice for consumers as compared to other more expensive fuels available. On average, despite supply constraints, more than 300,000 consumers were added/connected to gas network by the gas companies. Meanwhile, addition of new power plants, industries and commercial and residential networks also contributed to increased demand. It is expected that the demand for the natural gas will increase further in next 5 years’ time owing to growing user base and increase per capita consumption of energy. During FY2015-16, total supply of natural gas was recorded at 3,947 MMCFD whereas average demand remained more than 6,000 MMCFD, recording a 2,000 MMCFD deficit. With increasing demand, the projected deficit is expected to reach by 6,700 MMCFD by FY2030.

The balance recoverable reserves of crude oil as of FY2015 remained 385 million barrels while annual production equaled 35 million barrels. The consumption of petroleum products registered a growth rate of 5.2% with total petroleum product consumption reaching to 23.7 million tons primarily on the back of improved demand in the power sector for furnace oil as well as diesel in the transport sector and MOGAS for two and four-wheeler vehicles. Total production by the refineries remained 11.31 million tons which was by PARCO’s market share in POL products (39%) followed by NRL (19%), PRL (14%), ARL (14%) and BYCO (10%). Country met demand for HSD, MOGAS and FO primarily through imports, which put pressures on the foreign exchange reserves and balance of payments situation of the country (total import payments of oil: $15.4 billion in FY2016).

LPG remained a fuel of the poor but its mix in the country’s primary energy remained insignificant. The size of the LPG market was 1.1 million Mtons per annum which was mainly consumed by domestic (38%), commercial (37%) and industrial (25%) sectors. Gas production fields contributed around 46% of LPG’s total production with refineries (37%) and imports (17%) also contributed to its supply chain.

The estimated coal reserves of the country as of FY2015 remained at about 186 billion tons while indigenous production remained meager at 3.7 million tons. Imported coal was about 5 million tons which is estimated to increase substantially during FY2016 due to operationalization of coal power plants and other CPEC related coal projects.

On the hydel side, Pakistan has a potential of 40,000 MW whereas its total installed hydel capacity is only 7,200 MW (utilization of 18%). Hydel share has declined considerably over the years in Pakistan’s primary energy supplies which has resulted in higher cost replacements (oil and gas). Most of the hydel capacity is owned by WAPDA which is a publicly owned company whereas only a meager capacity is owned by private producers.

Pakistan Atomic Energy Commission (PAEC) undertakes the nuclear projects development and operations in the country. The first nuclear plant (KANUPP) was commissioned in 1971 with a capacity of 137 MW. The second nuclear plant (Chashma) was commissioned in 2000 through a turnkey agreement with a Chinese company. The third plant (Chashma II) was commissioned in 2011 with an installed capacity of 325 MW. Under CPEC, Pakistan is poised to undertake K2 and K3 nuclear projects – with Chinese partners to enhance nuclear electricity generation capability.

Pakistan has a rich renewable resources zone which is both technologically viable and commercially feasible. Pakistan’s eastern wind corridor alone is estimated at 50,000 MW (Gharo, Jhimpir, Keti Bander) alone with the western corridor of Baluchistan also with proven exploitable wind potential. Pakistan also has a high solar irradiance potential which can also ameliorate energy deficit and can also utilize micro hydel, biomass and geothermal potential. Under CPEC, more than 3,000 MW of renewable energy projects will be brought online which is estimated to significantly increase renewable’s share in primary energy supply mix.