Política

Gas-addicted Pakistanis feel the pinch

“I have never witnessed such a situation when we don’t have gas for hours. It has become difficult to make a cup of tea in the evenings,” says Atiya, a housewife who lives in the port city of Karachi

For the winter season, Islamabad has rolled out a schedule of intermittent supply cuts across the country. The goal is to manage a widening gap between supply and demand. 

Household consumers who use gas to run stoves and water heaters have also seen a sharp increase in their monthly bills. 

A sudden surge in gas demand in the international market has affected consumers in other places, too, from Japan to Germany.  

But Pakistan’s case is unique because it started importing gas only six years ago. For decades it met domestic requirements from its own oil and gas fields. Much of that came from a place called Sui

An early find 

In 1952, petroleum geologists working in the southern Balochistan province discovered a massic gas field. With reserves of 9 trillion cubic feet (TCF), the Sui Gas Field remains the largest find in Pakistan’s history. 

That discovery spurred construction of a nation-wide network of pipelines, which carried gas from far-off petroleum fields to homes, restaurants and factories. 

To put this in perspective, consider that Pakistan’s total pipeline length is around 150,000 km. Nigeria, which sits on top of larger proven gas reserves, has a network not exceeding 6,000 km. 

A shortage of gas is also one of the reasons for the frequent power outages in the country. (AP) Over the years, successive Pakistani governments vigorously promoted gas connections in towns and villages to win votes. They did this without realising that new gas reserves were not easy to find, says G A Sabri, a retired petroleum ministry official. 

“Our policy of encouraging use of gas in homes was absolutely wrong. We politicised the entire distribution system,” he tells TRT World . 

Policymakers lambasted officials who opposed the policy as being against development and progress, he says. 

 For years Pakistan sold gas to households at dirt-cheap prices – at rates that were even less than what it cost to pump the gas out of the ground, process it, and then transport it across the country. 

“You have now reached a level that the domestic gas production is seriously short of what you want,” said Iqbal Z Ahmed, chairman of Pakistan GasPort, which operates one of the LNG import terminals. 

“And you have everybody addicted to gas. Pakistan has one of the world’s most extensive spaghetti-like pipeline networks for individual customers.” 

The expansion of pipeline connections was also inadvertently encouraged by the World Bank. 

The global lender had given loans to Pakistan’s two state-run distribution companies — Sui Southern and Sui Northern — on the condition of pegging the profit to a return on their capital investment. 

That basically meant that it was in the interest of the distribution companies to add more pipelines to their network every year and increase total assets to earn more money. 

Then there was corruption. 

The regional managers at these distribution companies were busy making their own PR with the ministers by approving new schemes and in return they took benefits,” says Sabri

Top officials at distribution companies would make periodic trips to rural towns in a fleet of 4x4s. There local politicians would court them with sumptuous meals and entertainment. A promise to give a gas or electricity connection has long been an election rallying cry in Pakistan

While piped-gas use increased in Pakistan, the situation was different in neighbouring India, where consumers in major cities still rely on LPG (liquified petroleum gas) cylinders in their homes. 

Plans to import gas from Iran via a pipeline never materialised, something which has worsened the shortages. (AP) Officials say another of Pakistan’s policy blunders, which has led to the present crisis, was the promotion of gas in the auto sector. 

By the mid-2000s, Pakistan ranked first in the world when it came to the ratio of vehicles that used compressed natural gas (CNG) as fuel.  

A whole CNG industry sprouted up with roadside vendors and gas fuel stations in every nook and cranny. The sector siphoned off a substantial chunk of Pakistan’s national gas supply, often creating shortages for other industrial consumers such as garment manufacturers. 

This week the government banned CNG use for two months in a bid to manage a gas shortfall, which is now twice as much as what’s produced by the local fields. 

Pakistan’s daily gas production has fallen to 3.5 billion cubic feet (BCF) after years of remaining stagnant at 4 BCF. As domestic consumption increased, petroleum producers have struggled to find major gas fields. 

A lost opportunity 

By 2013, Pakistan Petroleum Limited (PPL), the company that found the Sui field, was drilling for new gas reserves on the outskirts of Karachi, the country's commercial heart. 

Searching so close to a major metropolis was a sign of the great difficulties companies have faced trying to find conventional gas fields in more far-flung regions. 

The last major discovery in Pakistan was the Qadirpur field,” says Masood Siddiqui, a senior petroleum industry executive, referring to a reserve found in 1990. 

“Problem is that our gas production was not able to keep up with the demand and the output from existing fields was declining fast,” he says. 

Restive Balochistan province, home to Sui field, remains largely unexplored despite making up more than 40 percent of Pakistan’s land mass. 

A separatist insurgency, internal politics, distrust among the locals and frequent military operations make petroleum exploration difficult in the region. 

“We have asked the government to create a special security force to assist the exploration companies to work around this issue,” says Siddiqui, who is the former vice chairman of the Pakistan Petroleum Exploration and Production Companies Association. 

Pakistan has lagged behind others in exploiting shale gas potential. Unlike conventional fields, shale requires more effort and investment to pump out gas from the underground reservoirs. 

Similarly, there are dozens of marginal fields – gas wells that have been abandoned because they don’t have sufficient output to make them economically viable – that can still help ease gas shortages. 

Siddiqui says Islamabad would need to offer better incentives such as tax breaks to exploration companies if it wants to exploit shale and marginal reserves. 

“Look, initially the price of gas from these fields will be high. But as the technology gets transferred then it will come down, just like it happened with mobile phone connections.” 

Source: TRT World

Successive governments handed out gas connections like sweet cakes. Now the people don’t have enough to cook their daily meals. Pakistanis love to cook. Until a few years ago, it wasn’t uncommon to see a constant, flickering flame on a gas burner in the average home — even when no meal was being prepared. 

People would simply use paper strips cut out of old textbooks to light the other burners when the need arose. 

“We saved matchsticks. They were expensive,” Atiya, a homemaker, tells TRT World . 

Since Pakistan’s independence in 1947, gas has typically been cheap and readily available. But things aren't the same anymore. Pakistanis are now struggling to cope with hours-long gas outages.

“I have never witnessed such a situation when we don’t have gas for hours. It has become difficult to make a cup of tea in the evenings,” says Atiya, a housewife who lives in the port city of Karachi

For the winter season, Islamabad has rolled out a schedule of intermittent supply cuts across the country. The goal is to manage a widening gap between supply and demand. 

Household consumers who use gas to run stoves and water heaters have also seen a sharp increase in their monthly bills. 

A sudden surge in gas demand in the international market has affected consumers in other places, too, from Japan to Germany.  

But Pakistan’s case is unique because it started importing gas only six years ago. For decades it met domestic requirements from its own oil and gas fields. Much of that came from a place called Sui

An early find 

In 1952, petroleum geologists working in the southern Balochistan province discovered a massic gas field. With reserves of 9 trillion cubic feet (TCF), the Sui Gas Field remains the largest find in Pakistan’s history. 

That discovery spurred construction of a nation-wide network of pipelines, which carried gas from far-off petroleum fields to homes, restaurants and factories. 

To put this in perspective, consider that Pakistan’s total pipeline length is around 150,000 km. Nigeria, which sits on top of larger proven gas reserves, has a network not exceeding 6,000 km. 

A shortage of gas is also one of the reasons for the frequent power outages in the country. (AP) Over the years, successive Pakistani governments vigorously promoted gas connections in towns and villages to win votes. They did this without realising that new gas reserves were not easy to find, says G A Sabri, a retired petroleum ministry official. 

“Our policy of encouraging use of gas in homes was absolutely wrong. We politicised the entire distribution system,” he tells TRT World . 

Policymakers lambasted officials who opposed the policy as being against development and progress, he says. 

 For years Pakistan sold gas to households at dirt-cheap prices – at rates that were even less than what it cost to pump the gas out of the ground, process it, and then transport it across the country. 

“You have now reached a level that the domestic gas production is seriously short of what you want,” said Iqbal Z Ahmed, chairman of Pakistan GasPort, which operates one of the LNG import terminals. 

“And you have everybody addicted to gas. Pakistan has one of the world’s most extensive spaghetti-like pipeline networks for individual customers.” 

The expansion of pipeline connections was also inadvertently encouraged by the World Bank. 

The global lender had given loans to Pakistan’s two state-run distribution companies — Sui Southern and Sui Northern — on the condition of pegging the profit to a return on their capital investment. 

That basically meant that it was in the interest of the distribution companies to add more pipelines to their network every year and increase total assets to earn more money. 

Then there was corruption. 

The regional managers at these distribution companies were busy making their own PR with the ministers by approving new schemes and in return they took benefits,” says Sabri

Top officials at distribution companies would make periodic trips to rural towns in a fleet of 4x4s. There local politicians would court them with sumptuous meals and entertainment. A promise to give a gas or electricity connection has long been an election rallying cry in Pakistan

While piped-gas use increased in Pakistan, the situation was different in neighbouring India, where consumers in major cities still rely on LPG (liquified petroleum gas) cylinders in their homes. 

Plans to import gas from Iran via a pipeline never materialised, something which has worsened the shortages. (AP) Officials say another of Pakistan’s policy blunders, which has led to the present crisis, was the promotion of gas in the auto sector. 

By the mid-2000s, Pakistan ranked first in the world when it came to the ratio of vehicles that used compressed natural gas (CNG) as fuel.  

A whole CNG industry sprouted up with roadside vendors and gas fuel stations in every nook and cranny. The sector siphoned off a substantial chunk of Pakistan’s national gas supply, often creating shortages for other industrial consumers such as garment manufacturers. 

This week the government banned CNG use for two months in a bid to manage a gas shortfall, which is now twice as much as what’s produced by the local fields. 

Pakistan’s daily gas production has fallen to 3.5 billion cubic feet (BCF) after years of remaining stagnant at 4 BCF. As domestic consumption increased, petroleum producers have struggled to find major gas fields. 

A lost opportunity 

By 2013, Pakistan Petroleum Limited (PPL), the company that found the Sui field, was drilling for new gas reserves on the outskirts of Karachi, the country's commercial heart. 

Searching so close to a major metropolis was a sign of the great difficulties companies have faced trying to find conventional gas fields in more far-flung regions. 

The last major discovery in Pakistan was the Qadirpur field,” says Masood Siddiqui, a senior petroleum industry executive, referring to a reserve found in 1990. 

“Problem is that our gas production was not able to keep up with the demand and the output from existing fields was declining fast,” he says. 

Restive Balochistan province, home to Sui field, remains largely unexplored despite making up more than 40 percent of Pakistan’s land mass. 

A separatist insurgency, internal politics, distrust among the locals and frequent military operations make petroleum exploration difficult in the region. 

“We have asked the government to create a special security force to assist the exploration companies to work around this issue,” says Siddiqui, who is the former vice chairman of the Pakistan Petroleum Exploration and Production Companies Association. 

Pakistan has lagged behind others in exploiting shale gas potential. Unlike conventional fields, shale requires more effort and investment to pump out gas from the underground reservoirs. 

Similarly, there are dozens of marginal fields – gas wells that have been abandoned because they don’t have sufficient output to make them economically viable – that can still help ease gas shortages. 

Siddiqui says Islamabad would need to offer better incentives such as tax breaks to exploration companies if it wants to exploit shale and marginal reserves. 

“Look, initially the price of gas from these fields will be high. But as the technology gets transferred then it will come down, just like it happened with mobile phone connections.” 

Source: TRT World