Karachi June 04 2021: The import of Liquefied Natural Gas has also helped reduce overall electricity generation cost in the country by around PKR234 billion during the period from fiscal year 2017 to 2020, as per State Bank of Pakistan.
During the period from fiscal year 2017-2020, 2,768 MW of electricity was generated on annual basis in the country (excluding K-Electric) from LNG, at a total cost of PKR 666.3 billion. If the same quantity of electricity was generated using residual furnace oil (RFO), the total cost would have been PKR900 billion.
To recall, natural gas is one of the most important sources fulfilling Pakistan’s energy requirements primarily because of the country’s natural endowment of the fuel, and its inherent cost advantage over oil. Contributing nearly 35 percent of the country’s primary energy supplies, local natural gas production currently stands at 29.3 million tons of equivalent (TOE) – placing Pakistan among the top-25 natural gas producing countries. In terms of final energy consumption, the share of natural gas has remained above 30 percent over the past two decades. Thermal power producers, households and general industries are major users of natural gas, while the fertilizer sector also uses it as a principal feedstock and fuel source.
However, despite a large and growing consumer base, indigenous gas supplies have stagnated since 2008. To plug the gas deficit in the short term, Pakistan started importing natural gas (in liquefied form – LNG) in sizable quantities from fiscal year 2015, and has since then quickly become a major buyer in the international market. At present, nearly 23 percent of the country’s natural gas consumption is being met through imported LNG.
