With the American LNG reservoirs coming into the picture, as a cheaper – $10 per million British thermal units (mmBtu) – gas purchase option, a Pakistani delegation rushed to Washington recently vying to queue up behind the likes of China, India, South Korea and Japan. A rather rude awakening awaited them when they were told that 25 applications for US gas were already pending, and Islamabad’s turn to import gas from Washington might not come before the year 2030. Back to square one it was then, on the energy front.
LNG Lure
Pakistan’s current gas production is 4 billion cubic feet per day (bcfd), with the shortfall being around half of that. Bridging that deficit through gas pipelines via Iranian and Turkmen gas seems to be a pipedream, with Iran-Pakistan (IP) pipeline succumbing to Islamabad jumping aboard the Saudi bandwagon in the Middle East, and Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline being a delusion owing to the security situation in Afghanistan. This seemingly leaves LNG import from Qatar as the only viable solution for Pakistan’s gas troubles, especially since it’s the only country among the 17 LNG exporting nations whose gas isn’t sold out and is within shipping distance from Pakistan as well.
Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi, meanwhile, despite not having negotiated LNG price with Qatar reiterated that Islamabad would get the best possible deal. “We haven’t negotiated the LNG price with Qatar yet, but it will be done in a transparent manner. We will make sure the LNG price is kept 30 percent below petroleum price,” Abbasi said.
Shahid Abbasi has also confirmed that the first LNG terminal would be installed by November this year, further affirming Pakistan’s lure towards LNG, as its earmarked gas solution. Now all that remains is the small matter of finalising the gas price, which is predicted to be around $18 per mmBtu. Also, if Islamabad succumbs to Doha’s demands of signing a 15-year contract with gas price fixed for the next decade and a half as a percentage of Brent, it will leave Pakistan’s economy at the mercy of global crude prices and Qatar’s obviously self-seeking demands.
Shale lifeline
As Pakistan sifts the gas solutions from politicised pipelines and pricey LNG imports, Sustainable Development Policy Institute (SDPI) has come up with a report that should force the energy think-tank to alter its policymaking – at least in the long run. The report titled, “Shale Oil & Gas: The Lifeline for Pakistan” elaborates in detail how the long-term solution to Pakistan’s energy predicament is actually lying underneath the country’s own gas basins.
The report’s author SDPI Senior Advisor, Water & Energy, Engr Arshad H Abbasi believes Pakistan has enough gas reserves to fulfill the national needs for the next half a century.
“Pakistan has great potential for natural gas which can meet our energy demands for the next 50 years. In fact, achieving self-sufficiency through the development of these national resources would result in savings of $15 billion, and will put the country on the road to economic growth and development. It will also give Islamabad more diplomatic independence. I believe the government needs to be pushed to develop shale gas in Pakistan,” Arshad Abbasi said.
[quote]The reserves run the entire gamut from Kohat to Badin[/quote]
Exploration of shale gas will not only provide the energy impetus to drag the economy out of the current fix, it will also create numerous job opportunities in the country. And since the reserves run the entire gamut from Kohat to Badin, these opportunities would not only provide job opportunities for thousands of workers it would ensure that vacancies are created in a wide range of cities and areas.
“Between 75,000 and 100,000 job opportunities would be created if the government gives shale gas exploration the go ahead, as elaborated in the SDPI report. These jobs would have both direct and indirect opportunities and will include both skilled and semiskilled workforce,” the SDPI advisor added.
Former caretaker finance minister Dr Salman Shah also believes that Pakistan’s future energy policy should be centered around shale gas. “The solution to Pakistan’s gas problem lies within its own boundaries, and while all gas options should be explored, shale should be at the forefront of all future and current energy policies, especially since energy independence would ease the political and diplomatic tensions in Pakistan as well,” he said.
Exploring its own gas reserves would not only help Pakistan ease the energy deficit, and uplift the economy, it bodes well diplomatically as well since Islamabad would then sit on LNG and pipeline negotiation tables sans the very tangible desperation.
Diplomatic muscle
The epicentre of the clamours in favour of shale gas echoing around the globe was the White House, when the Bush administration was looking for an energy mix that decreased US dependency on Middle Eastern oil. The Obama regime, dealing with the Arab Spring in addition to the inherited War on Terror, has increased its focus on shale gas exploration, which has resulted in its foreign policy shift enabling it to do what was unthinkable a few years ago: alienating the Saudis by “befriending” Iran owing to November’s nuclear deal.
Former foreign minister Khurshid Kasuri reiterated that shale gas can help Pakistan put on some much needed diplomatic muscle. “If a country as strong as the US feels that it now has more diplomatic clout owing to the addition of shale gas in its energy mix, it goes without saying that its influence over Pakistan’s foreign policy would be massive,” Kasuri said.
With Pakistan exploring both the pipeline options and LNG import deals as short term fixes for the energy sector, knowing that work is being done domestically to make Islamabad self-sufficient in the long run would give our negotiators the reassurance that they shouldn’t let other countries dictate their demands.
[quote]"We live in a cruel world. Every country would do its best to impose its demands on us"[/quote]
“We live in a cruel world. Every country would do its best to impose its demands on us. And it goes without saying that any nation that has the framework in place to make it stand up on its own feet, would be in a better position to get fair gas deals out of Qatar, Iran or Turkmenistan,” Kasuri added.
Ideal mix
According to SDPI’s report shale gas can be explored domestically at around $10 per mmBtu. Compare this with the touted $18 per mmBtu for LNG from Qatar and signing any long term deal with Doha borders on being economically suicidal.
“LNG from Qatar should be a stop gap solution for the next five years, till we explore our domestic reserves. Anything more than five years would not be in the interest of the countries, since that’s all the time Islamabad needs to put the infrastructure in place for shale exploration,” Dr Salman Shah said.
Dr Shah was also critical of Shahid Abbasi saying that he found it hard to believe that the price for LNG from Doha hadn’t even been discussed. “If the minister hasn’t even discussed the price, what exactly has he been doing during the negotiations with Qatar? We need to put an end to these nontransparent dealings and the energy sector needs transparency if we are to put an end to the gas crisis,” Dr Shah said.
Arshad H Abbasi also echoed those words and suggested that Pakistan can actually explore shale has at less than $10 per mmBtu if there is more transparency. “Ten dollars is a conservative estimate, we can actually explore shale gas at around five to eight dollars per mmBtu, if the dealings are transparent. In any case the government needs to take LNG as a temporary option and start focusing on putting the infrastructure in place for shale exploration,” Arshad Abbasi said.
The general consensus is that an energy mix is needed, where all possible options are explored, with the focus on shale exploration. Pakistan’s geographical location means that it can become the focus of a gas pipeline network that links Central Asia with South and Southeast Asia.
“Pakistan’s ideal gas mix should include gas from Turkmenistan and Iran. LNG will obviously have to be there as well as a short term fix, while everything depends on setting the ball rolling on shale gas exploration. Through eying self-sufficiency, Pakistan can actually realise its potential as this lucrative corridor that is a multi-pronged bridge linking Central Asia with South Asia and China with the Gulf and the Middle East,” Khurshid Kasuri said.
It’s clear that Pakistan needs to keep all its burners on, and explore all gas options. However, sans any intent on exploring its own gas reserves Islamabad would be left diplomatically vulnerable. Shale gas might just be Islamabad’s energy and diplomacy lifeline.
LNG Lure
Pakistan’s current gas production is 4 billion cubic feet per day (bcfd), with the shortfall being around half of that. Bridging that deficit through gas pipelines via Iranian and Turkmen gas seems to be a pipedream, with Iran-Pakistan (IP) pipeline succumbing to Islamabad jumping aboard the Saudi bandwagon in the Middle East, and Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline being a delusion owing to the security situation in Afghanistan. This seemingly leaves LNG import from Qatar as the only viable solution for Pakistan’s gas troubles, especially since it’s the only country among the 17 LNG exporting nations whose gas isn’t sold out and is within shipping distance from Pakistan as well.
Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi, meanwhile, despite not having negotiated LNG price with Qatar reiterated that Islamabad would get the best possible deal. “We haven’t negotiated the LNG price with Qatar yet, but it will be done in a transparent manner. We will make sure the LNG price is kept 30 percent below petroleum price,” Abbasi said.
Shahid Abbasi has also confirmed that the first LNG terminal would be installed by November this year, further affirming Pakistan’s lure towards LNG, as its earmarked gas solution. Now all that remains is the small matter of finalising the gas price, which is predicted to be around $18 per mmBtu. Also, if Islamabad succumbs to Doha’s demands of signing a 15-year contract with gas price fixed for the next decade and a half as a percentage of Brent, it will leave Pakistan’s economy at the mercy of global crude prices and Qatar’s obviously self-seeking demands.
Shale lifeline
As Pakistan sifts the gas solutions from politicised pipelines and pricey LNG imports, Sustainable Development Policy Institute (SDPI) has come up with a report that should force the energy think-tank to alter its policymaking – at least in the long run. The report titled, “Shale Oil & Gas: The Lifeline for Pakistan” elaborates in detail how the long-term solution to Pakistan’s energy predicament is actually lying underneath the country’s own gas basins.
The report’s author SDPI Senior Advisor, Water & Energy, Engr Arshad H Abbasi believes Pakistan has enough gas reserves to fulfill the national needs for the next half a century.
“Pakistan has great potential for natural gas which can meet our energy demands for the next 50 years. In fact, achieving self-sufficiency through the development of these national resources would result in savings of $15 billion, and will put the country on the road to economic growth and development. It will also give Islamabad more diplomatic independence. I believe the government needs to be pushed to develop shale gas in Pakistan,” Arshad Abbasi said.
[quote]The reserves run the entire gamut from Kohat to Badin[/quote]
Exploration of shale gas will not only provide the energy impetus to drag the economy out of the current fix, it will also create numerous job opportunities in the country. And since the reserves run the entire gamut from Kohat to Badin, these opportunities would not only provide job opportunities for thousands of workers it would ensure that vacancies are created in a wide range of cities and areas.
“Between 75,000 and 100,000 job opportunities would be created if the government gives shale gas exploration the go ahead, as elaborated in the SDPI report. These jobs would have both direct and indirect opportunities and will include both skilled and semiskilled workforce,” the SDPI advisor added.
Former caretaker finance minister Dr Salman Shah also believes that Pakistan’s future energy policy should be centered around shale gas. “The solution to Pakistan’s gas problem lies within its own boundaries, and while all gas options should be explored, shale should be at the forefront of all future and current energy policies, especially since energy independence would ease the political and diplomatic tensions in Pakistan as well,” he said.
Exploring its own gas reserves would not only help Pakistan ease the energy deficit, and uplift the economy, it bodes well diplomatically as well since Islamabad would then sit on LNG and pipeline negotiation tables sans the very tangible desperation.
Diplomatic muscle
The epicentre of the clamours in favour of shale gas echoing around the globe was the White House, when the Bush administration was looking for an energy mix that decreased US dependency on Middle Eastern oil. The Obama regime, dealing with the Arab Spring in addition to the inherited War on Terror, has increased its focus on shale gas exploration, which has resulted in its foreign policy shift enabling it to do what was unthinkable a few years ago: alienating the Saudis by “befriending” Iran owing to November’s nuclear deal.
Former foreign minister Khurshid Kasuri reiterated that shale gas can help Pakistan put on some much needed diplomatic muscle. “If a country as strong as the US feels that it now has more diplomatic clout owing to the addition of shale gas in its energy mix, it goes without saying that its influence over Pakistan’s foreign policy would be massive,” Kasuri said.
With Pakistan exploring both the pipeline options and LNG import deals as short term fixes for the energy sector, knowing that work is being done domestically to make Islamabad self-sufficient in the long run would give our negotiators the reassurance that they shouldn’t let other countries dictate their demands.
[quote]"We live in a cruel world. Every country would do its best to impose its demands on us"[/quote]
“We live in a cruel world. Every country would do its best to impose its demands on us. And it goes without saying that any nation that has the framework in place to make it stand up on its own feet, would be in a better position to get fair gas deals out of Qatar, Iran or Turkmenistan,” Kasuri added.
Ideal mix
According to SDPI’s report shale gas can be explored domestically at around $10 per mmBtu. Compare this with the touted $18 per mmBtu for LNG from Qatar and signing any long term deal with Doha borders on being economically suicidal.
“LNG from Qatar should be a stop gap solution for the next five years, till we explore our domestic reserves. Anything more than five years would not be in the interest of the countries, since that’s all the time Islamabad needs to put the infrastructure in place for shale exploration,” Dr Salman Shah said.
Dr Shah was also critical of Shahid Abbasi saying that he found it hard to believe that the price for LNG from Doha hadn’t even been discussed. “If the minister hasn’t even discussed the price, what exactly has he been doing during the negotiations with Qatar? We need to put an end to these nontransparent dealings and the energy sector needs transparency if we are to put an end to the gas crisis,” Dr Shah said.
Arshad H Abbasi also echoed those words and suggested that Pakistan can actually explore shale has at less than $10 per mmBtu if there is more transparency. “Ten dollars is a conservative estimate, we can actually explore shale gas at around five to eight dollars per mmBtu, if the dealings are transparent. In any case the government needs to take LNG as a temporary option and start focusing on putting the infrastructure in place for shale exploration,” Arshad Abbasi said.
The general consensus is that an energy mix is needed, where all possible options are explored, with the focus on shale exploration. Pakistan’s geographical location means that it can become the focus of a gas pipeline network that links Central Asia with South and Southeast Asia.
“Pakistan’s ideal gas mix should include gas from Turkmenistan and Iran. LNG will obviously have to be there as well as a short term fix, while everything depends on setting the ball rolling on shale gas exploration. Through eying self-sufficiency, Pakistan can actually realise its potential as this lucrative corridor that is a multi-pronged bridge linking Central Asia with South Asia and China with the Gulf and the Middle East,” Khurshid Kasuri said.
It’s clear that Pakistan needs to keep all its burners on, and explore all gas options. However, sans any intent on exploring its own gas reserves Islamabad would be left diplomatically vulnerable. Shale gas might just be Islamabad’s energy and diplomacy lifeline.