Thursday, November 15, 2018

Pakistan's Insatiable Appetite For Energy

Pakistan's consumption of oil and gas has rapidly grown over the last 5 years, an indication of the nation's accelerating economic growth. Pakistan is among the fastest growing LNG markets, according to Shell 2017 LNG report.

Pakistan Oil Consumption in Barrels Per Day. Source: CEIC.com

Oil consumption in Pakistan has shot up about 50% from 400,000 barrels per day in 2012 to nearly 600,000 barrels per day in 2017. During the same period, Pakistan's gas consumption has risen from 3.5 billion cubic feet per day to nearly 4 billion cubic feet per day, according to British Petroleum data.

Pakistan is among the fastest growing LNG markets, according to Shell 2017 LNG report.  The country has suffered a crippling energy shortage in recent years as demand has risen sharply to over 6 billion cubic feet per day,  far outstripping the domestic production of about 4 billion cubic feet per day. Recent LNG imports are beginning to make a dent in Pakistan's ongoing energy crisis and helping to boost economic growth. Current global oversupply and low LNG prices are helping customers get better terms on contracts.

Pakistan Gas Consumption in Billions of Cubic Feet Per Day. Source: CEIC.com

Since the middle of the 18th century, the Industrial Revolution has transformed the world. Energy has become the life-blood of modern economies. Energy-hungry machines are now doing more and more of the work at much higher levels of productivity than humans and animals who did it in pre-industrial era.

Every modern, industrial society in history has gone through a 20-year period where there were extremely large investments in the energy sector, and availability of ample electricity made the transition from a privilege of an urban elite to something every family would have. It seems that Pakistan is beginning to recognize it. If Pakistan wishes to join the industrialized world, it will have to continue to do this by having a comprehensive energy policy and making large investments in the power sector. Failure to do so would condemn Pakistanis to a life of poverty and backwardness.

Pakistan is heavily dependent on energy imports to drive its economy. These energy imports put severe strain on the country's balance of payments and forces it to repeatedly seek IMF bailouts.

Pakistan needs to develop export orientation for its economy and invest more in its export-oriented industries to earn the hard currencies it needs for essential imports including oil and gas. At the same time, Pakistan is stepping up its domestic oil and gas exploration efforts.  American energy giant Exxon-Mobil has joined the offshore oil and gas exploration efforts started by Oil and Gas Development Corporation (OGDC), Pakistan Petroleum Limited (PPL) and Italian energy giant ENI.

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan Oil and Gas Exploration

US EIA Estimates of Oil and Gas in Pakistan

Pakistan Among Fastest Growing LNG Markets

Methane Hydrate Release After Balochistan Quake

Thar Coal Development

Why Blackouts and Bailouts in Energy-Rich Pakistan?

Riaz Haq's Youtube Channel

23 comments:

Indus said...

Did not know this but Pakistan's gas consumption per capita is 5 times as much as India's. That is staggering difference.

http://world.bymap.org/NaturalGasConsumption.html

2014 figures Pakistan 207 cubic meters per person vs India 42 cubic meters per person

Riaz Haq said...

Indus: "Did not know this but Pakistan's gas consumption per capita is 5 times as much as India's. That is staggering difference."

Yes, it's reflected in the total gas consumption figures for 2017:

Pakistan 3.95 billion cubic feet per day

India 5.25 billion cubic feet per day

https://www.ceicdata.com/en/indicator/india/natural-gas-consumption

https://www.ceicdata.com/en/indicator/pakistan/natural-gas-consumption

Riaz Haq said...

The per capita primary commercial energy consumption has increased dramatically since
1947, reflecting rapid rate of industrialization and a shift from non-commercial to commercial
sources of energy. In terms of oil equivalent, per capita commercial energy consumption
in Pakistan was mere 0.02 Ton of Oil equivalent (TOE) in 1947.


https://sdpi.org/publications/files/IP-Report.pdf


5 In 2012, per capita commercial
energy consumption is estimated
at 0.37 TOE, indicating a
compound growth rate of 6.5% for the
period 1947-2012.
6
Oil and gas resources account for
almost three-quarters ofthe energy consumption
in the country7 and natural
gas due to its convenience and cheapness
has proved over the years as the
best source of energy - partly replacing
coal.
8 Therefore, currently 49.5% of energy
needs are dependent on natural
gas, while Oil Imports account for
30.8%, LP 0.5%, Electricity (Hydro, Nuclear
& Imported) 12.5% and Coal
6.6%,
9 thus indicating the maximum dependence on natural gas

Thomas MSW said...

Total Energy Consumption Per Capita from 2003 to 2013 gives us a better perspective.

2003
Pakistan 648W
India 753W

2013
Pakistan 632W
India 806W

Per Capita total energy consumption went down in Pakistan!

http://data.worldbank.org/data-catalog/world-development-indicators

Anonymous said...

Pakistan is on the cusp of something large. It is evident in every corner of our towns. We have to control the religious thugs for a few years.

Rizwan said...

Anonymous: "--- We have to control the religious thugs for a few years.

And the non-religious ones too!

Anonymous said...

Early signs of economy are clear. Pakistan has turned the corner. Energy consumption is one good indicator. Other consumer consumption is booming. Saudi and Chinese funding is secured. IMF went back empty handed and Trump has been shown his place.

Riaz Haq said...

India Looks To Double Its Natural Gas Usage

https://oilprice.com/Energy/Natural-Gas/India-Looks-To-Double-Its-Natural-Gas-Usage.html


This week Indian Prime Minister Narendra Modi announced that this administration is working toward establishing a natural gas trading exchange as part of a larger effort to relieve the rapidly developing nation’s reliance on crude oil and its byproducts. A large motivator for the desired shift away from oil is the country’s ever worsening pollution problem.

At a New Delhi ceremony for the laying of a foundation stone for the development of city gas distribution (CGD) networks, Prime Minister Modi said that his government wants to “increase the use of natural gas by 2.5 times by the end of next decade." The plan is already getting underway with the construction of CGD networks in 129 districts auctioned so far.

The CGD networks underway are just one facet of India’s move to develop a transparent natural gas market. The price of gas would be determined on an exchange, with the intention of promoting a significant increase in the use of natural gas in the subcontinent’s total energy mix. The amount of natural gas in the current blend is just 6.5 percent, and Modi’s administration aims to raise the natural gas content to 15 percent between 2028 and 2030.

The Indian government has not yet disclosed the price tag for making this significant switch away from crude and toward natural gas. That being said, analysts have consistently said that using natural gas as fuel for vehicles and households alike is markedly less expensive than LPG, and considerably cleaner than petrol or diesel, a majorly important factor in the smog-choked country with an exponentially expanding middle class. As more people with buying power enter the market with the desire and the means to buy vehicles and power their homes, the importance of clean energy only becomes more dire.

-------------

Another major factor of change in India’s energy industry at the moment is the projected decline of the nation’s traditional offshore assets over the next ten years. This will be offset by the planned deepwater and ultra-deepwater projects set for development in the Krishna-Godavari (KG) basin at the Bay of Bengal, but these projects will also be a major boon to Modi’s desired shift toward natural gas. The upcoming projects in the KG basin are, according to oil and gas analyst GlobalData, anticipated to meet the rapidly growing energy demand - natural gas especially - in India, in addition to reducing the nation’s dependence on imports by as much as 10 percent by 2023.

According to Prime Minister Modi, India has already begun the bidding process for what is now the tenth round of CGD, expanding the coverage to 400 districts (a whopping 70 percent of the country's total population) over the next two to three years. In addition, India is pouring 130 billion rupees (nearly $2 billion U.S. dollars) into constructing a pipeline to eastern India. This is a necessary development, as the east is the site of latent gas demand that has not yet been exploited thanks to the non-existent infrastructure (until now). This pipeline network, paired with the liquefied natural gas (LNG) terminals currently being developed on India’s east coast and the massive CGD network project, are expected to work together to significantly increase natural gas consumption in the Indian subcontinent.

Riaz Haq said...

Vopak expands equity in #LNG #infrastructure in #Pakistan. It will acquire a 44 percent stake in total in Elengy Terminal Pakistan Ltd, whose subsidiary owns the South Asian nation's first liquefied natural #gas import facility. #energy | ET EnergyWorld https://energy.economictimes.indiatimes.com/news/oil-and-gas/vopak-expands-equity-in-lng-infrastructure-in-pakistan/66828811

Global independent tank storage company Vopak said on Tuesday it will increase its stake in liquefied natural gas (LNG) infrastructure in Pakistan, as the South Asian country turns to LNG imports to curb energy shortages.

Vopak said it will acquire a 44 percent stake in total in Elengy Terminal Pakistan Ltd, whose subsidiary owns the South Asian nation's first liquefied natural gas (LNG) import facility.

The acquisition will involve separate transactions with International Finance Corp (IFC) and Engro Corp and includes a 29 percent stake the company said it would buy in July, Vopak said in a statement.

The purchase is subject to conditions including regulatory and shareholder approvals, and is expected to close in the first quarter of next year, it said.

Elengy Terminal Pakistan's subsidiary Engro Elengy Terminal owns an LNG facility which is located at Port Qasim in Pakistan, adjacent to the Engro Vopak chemical terminal.

The facility has been in operation since 2015 and is the first LNG import facility in Pakistan.

"Pakistan is a market with more than 200 million people and has a growing energy demand in which the share of gas is expected to increase," Vopak said.

"Gas is mainly used for power supply for the growing population, industrial usage and as feedstock for fertilizers."

Once the transaction is completed, Elengy Terminal Pakistan's shareholders will be Engro and Vopak.

Riaz Haq said...

PTI Government unhappy, but Pakistan to stay with coal

https://www.eco-business.com/news/government-unhappy-but-pakistan-to-stay-with-coal/

Out of the 21 energy projects to be completed on a fast track (by 2019) with a cumulative capacity of 10,400 MW, nine are coal power plants, seven wind power plants, three hydropower, and two are HVDC transmission line projects.

Nearly USD 35 billion of the USD 60 billion worth of loans for producing energy from the China Pakistan Economic Corridor (CPEC) will be used to build new power stations, mainly coal-fired.

The projects completed include two mega coal power plants of 1,320 MW each, one in Punjab’s Sahiwal (commercially operating since May 2017) and the other in Karachi’s Port Qasim (Commercially operating since April 2018) using imported bituminous coal with modern supercritical coal-fired units. According to news reports, the country’s National Accountability Bureau has initiated an alleged corruption probe into both the costly projects.

Another one under completion is in the Thar desert in Sindh, about 400 kilometres from the port city of Karachi. It includes mining and setting up two 330 MW power plants at a cost of USD 2 billion. Once completed, it will be the first large power generation project using local coal.

The Sindh Engro Coal Mining Company has finally reached the coal seam in the desert. According to the company’s chief executive officer, Shamsuddin Shaikh, by October the company would have dug down to 162 metres to be able to dig up “useful” lignite coal. At the same time work at the first of the two power plants is 85 per cent complete and commissioning will begin by November-December this year when it will start supplying power to the national grid on an experimental basis. Once the first plant is fired, it will gobble up 3.8 million tons of coal each year.

Other projects in the pipeline include three 1,320 MW coal power plants. The ones at Rahim Yar Khan (in Punjab), and Hub (in Balochistan) to be completed between December 2018 and August 2019 respectively, will use imported coal. The third one, at Thar Block VI (in Sindh), will use indigenous lignite coal.

That does not mean that Pakistan is going to be completely coal-driven. Vaqar Zakaria, managing director of environmental consultancy firm Hagler Bailly Pakistan, put the figure to “just about 10 per cent of current power generation” which is from imported coal. However, he pointed out that coal-based power generation will increase to about 30 per cent of the country’s capacity requirement in the next three years once plants on Thar coal come online, and those at Hub and Jamshoro expand on imported coal.

Zakaria pointed out that the main argument in favour of Thar coal was the “lower reliance on imported fuel”, and to meet the “demand particularly when hydropower drops in winter” although the capital cost was high as the mines also have to be developed. However, he predicted the country will “see a slowdown in capacity addition in Thar in future”.

But projects relying on imported coal were questionable, especially those that are being carried out now, said Zakaria. “The earlier ones were justified [by the government] on the basis of load shedding and early induction of power to fill the demand-supply gap like the one at Port Qasim and Sahiwal plants that are already online; but the ones at Hub and Jamshoro cannot be justified on that basis. It is hard to understand why a project on imported coal was added so late in the game,” he said.

Riaz Haq said...

Pakistan Council Of Renewable Energy Technologies (PCRET) Installs 562 Micro-hydel Power Plants To Electrify 80,000 Houses

https://www.urdupoint.com/en/pakistan/pakistan-council-of-renewable-energy-technolo-515947.html


Pakistan Council of Renewable Energy Technologies (PCRET), which is working under Ministry of Science and Technology, has installed 562 micro-hydel power plants with total capacity of 9.7 MW during the last five years, electrifying more than 80,000 houses.

An official source from Ministry of Science and Technology told APP that the ministry and its research and development organizations are mandated to develop technologies for socio-economic development of the country.

Technologies have been developed in different sectors like water, renewable energy, electronics, health, Small and Medium sized Enterprises (SMEs), industry, agriculture etc to directly and indirectly benefit a common man.

Listing different technologies developed during the last five years, the official source informed that PCRET has installed 155 small wind turbines in Sindh and Balochistan electrifying 1560 houses and installed 4016 biogas plants.

The council has established 20 KW hybrid system including solar, MHP and wind in collaboration with China for research and training purposes.

PCRET has also designed and stimulated Wind Turbine and solar products including Solar Cooker, Solar Dryer, Solar Water Heater and Solar Desalination.

During the last five years, Pakistan Council of Scientific and Industrial Research (PCSIR) which is also an important department of the ministry has developed Coal Water Slurry Fuel and Reinforced Derived Fuel and solar driven one inch and two inches water pumps. PCSIR has also designed the Solar Powered Reverse Osmosis Plant, the source said.

While National Institute of Electronics (NIE) has developed LED lights, Solar Charge Controller, Automatic Voltage Stabilizer and cascaded multilevel inverter based transformer-less Unified Power Flow Controller, it added.

Riaz Haq said...

#Saudi to set up $10 billion #oil #refinery in #Pakistan."#SaudiArabia wants to make Pakistan's economic development stable through establishing an oil refinery and partnership with Pakistan in #CPEC" Saudi Energy Khalid al-Falih told reporters in #Gwadar https://cnb.cx/2TJMPDz

Saudi Arabia plans to set up a $10 billion oil refinery in Pakistan's deepwater port of Gwadar, the Saudi energy minister said on Saturday, speaking at the Indian Ocean port that is being developed with the help of China.

Pakistan wants to attract investment and other financial support to tackle a soaring current account deficit caused partly by rising oil prices. Last year, Saudi Arabia offered Pakistan a $6 billion package that included help to finance crude imports.

"Saudi Arabia wants to make Pakistan's economic development stable throughestablishing an oil refinery and partnership with Pakistan in the China Pakistan Economic Corridor," Saudi Energy Khalid al-Falih told reporters in Gwadar.

He said Crown Prince Mohammad bin Salman would visit Pakistan in February to sign the agreement. The minister added that Saudi Arabia would also invest in other sectors.

Beijing has pledged $60 billion as part of the China Pakistan Economic Corridor (CPEC) that involves building power stations, major highways, new and upgraded railways and higher capacity ports, to help turn Pakistan into a major overland route linking western China to the world.

"With setting up of an oil refinery in Gwadar, Saudi Arabia will become an important partner in CPEC," Pakistan Petroleum Minister Ghulam Sarwar Khan said.

The Saudi news agency SPA earlier reported that Falih met Pakistan's petroleum minister and Maritime Affairs Minister Ali Zaidi in Gwadar to discuss cooperation in refining, petrochemicals, mining and renewable energy.

It said Falih would finalise arrangements ahead of signing memorandums of understanding.

Since the government of Prime Minister Imran Khan came to power in August, Pakistan has secured economic assistance packages from Saudi Arabia, the United Arab Emirates and China.

In November, Pakistan extended talks with the International Monetary Fund as it seeks its 13th bailout since the late 1980s to deal with a looming balance of payments crisis.

The Pakistani prime minister's office had said on Thursday that Islamabad expected to sign investment agreements with Saudi Arabia and the UAE in coming weeks.

Riaz Haq said...

Access to #electricity: #Pakistan 99%, #India 84%, #Bangladesh 76%. Source: World Bank 2016

https://twitter.com/theworldindex/status/1085029776556023808

Access to electricity (% of population)

🇪🇺EU: 100%
🇧🇷BRA: 100%
🇨🇦CAN: 100%
🇨🇳CHN: 100%
🇺🇸USA: 100%
🇨🇴COL: 99%
🇵🇰PAK: 99%
🇵🇭PHI: 91%
🇮🇳IND: 84%
🇿🇦RSA: 84%
🇲🇳MGL: 82%
🇧🇩BAN: 76%
🇳🇬NGR: 59%
🇰🇪KEN: 56%
🇪🇹ETH: 42%
🇹🇿TAN: 33%
🇺🇬UGA: 27%
🇳🇪NIG: 16%
🇸🇸SSD: 9%

Riaz Haq said...

#Pakistan #ExxonMobil offshore drilling site #Kekra-1 143 miles from #Karachi is among top 3 potential "big oil finds" in #Asia
https://www.bloomberg.com/news/articles/2019-01-14/oil-wildcats-to-watch-for-signs-of-asia-drilling-drop-reversal

“Explorers are getting a little bit more ambitious in this part of the world,” Andrew Harwood, the consultancy’s Asia-Pacific upstream research director, said in an interview in Singapore. “These are huge companies with global portfolios; they’re not spending the money to drill unless they have a reason to be excited.”

Wood Mackenzie expects mergers and acquisition spending in the region to total about $8 billion in 2019 after growing 60 percent to $8.7 billion 2018. Activity will be focused around divestments in Southeast Asia by companies that want to focus spending on U.S. shale.

Here’s a closer look at the three Asia-Pacific prospects Wood Mackenzie is paying the most attention to:

Pakistan
A group including Eni SpA and Exxon Mobil Corp. will start drilling the Kekra-1 well this month in deepwater south of Pakistan. The country’s onshore natural gas production has been declining after years of under-investment, leading to the start of liquefied natural gas imports in recent years. Growing demand for the fuel has made the drillers more confident that they’ll be able to sell any gas from a sizable development, Harwood said.


---------

Pakistan: ExxonMobil Begins Drilling off Karachi Coast

https://worldview.stratfor.com/situation-report/pakistan-exxonmobil-begins-drilling-karachi-coast


What Happened: ExxonMobil has begun drilling for oil and gas 143 miles off the coast of Karachi in the Arabian Sea, Daily Pakistan reported Jan. 10.

Why It Matters: The operations mark the first time an energy company is conducting offshore exploration along Pakistan's coast. An ExxonMobil executive has said the company has been considering launching operations in the region because of Pakistan's growing energy demand.

Background: Only 15 percent of Pakistan's energy consumption is met by domestic production. High energy prices have significantly inflated the country's import bill and contributed to draining its foreign exchange reserves.


Riaz Haq said...

At Kekra I, 143 miles from #Karachi coast, gas flows can be as big as Sui field at 3 to 8 trillion cubic feet (TCF), or 25-40 percent of #Pakistan’s total #gas reserves.Well diameter is 18 to 24 inches. Current depth of 1900 feet. Good news by April. https://www.thenews.com.pk/latest/419865-kekra-i-gas-flows-can-be-as-big-as-sui-field

Ghulam Sarwar Khan, Federal Minister for Petroleum met Mr. Irtiza Syed, CEO, EXXON Mobil on Wednesday at his office.

Irtiza briefed minister about progress at Indus G Block.

According to a press release issued by the petroleum ministry, Ghulam Sarwar Khan said 2019 will be good year for all of us. Exxon Mobil has started spud in.



The well’s diameter is 18 to 24 inches. Right now they are at depth of 1900 feet, hence its ultra-deep exploration. It will give its first good news in March or April.

Exxon Mobil has given the target depth of 5500 feet. In March, Exxon Mobil will send a specimen to Houston for examination.

Similarly ENI will send the specimen to Milan in March. From April to May there will be a reasonable idea that this well contains oil or gas.

The discovery is anticipated to yield gas flows which can be as big as Sui field, with estimated reserves of 3 to 8 trillion cubic feet (TCF), or 25-40 percent of Pakistan’s total gas reserves.

Pakistan Exploration and Production (E&P) companies along with international partners have ventured into offshore territory of underexplored but promising Indus G Block for deep sea drilling endeavor.

The operator of the block, ENI has chartered, Saipem, a rig ship to drill the exploration well , located 230 kms South West of Karachi. ENI is an Italian company working in Pakistan since 2000.

This endeavor is a joint venture (JV) formed by ENI, Exxon Mobil, OGDCL and PPL to spud Kekra I exploration well in Indus G Block.

The exploration cost is estimated at 75 million dollars. Right now more than 200 people are working at the ship. After exploration, employment will be generated. If it will be a successful discovery, then for next 25 to 30 years, Pakistan can use this gas.

After its success, Exxon Mobil will spud in more wells. Till 2021 to 2022, a facility will be made here. Ghulam Sarwar Khan also invited Exxon Mobil for on shore exploration. He said that he will make ways easy for international investment.

For this purpose duties and taxes have been waived off on import of drilling equipment. During meeting, Stephen, Vice President, Exxon Mobil was also present.

Riaz Haq said...

Will rising demand, new exploration activity and a refresh of government policy bring renewed confidence in Asia-Pacific’s upstream industry in 2019? Wood Mackenzie’s research director Andrew Harwood shares his thoughts.

https://www.hellenicshippingnews.com/will-asia-pacifics-og-sector-join-the-global-recovery-in-2019/

Big exploration slowly returning
The need to fill new and old gas infrastructure will see the drilling of exciting offshore prospects across Australia, Brunei, Malaysia,Myanmar, Pakistan and Papua New Guinea. Some will be frontier deepwater exploration. But access to gas demand centres will be the primary driver of which prospects make the grade.

Our top three wells to watch in 2019 involve some of the world’s most successful exploration companies – hopes are high for sustained success:

• Offshore Pakistan, ExxonMobil and Eni will spud the ultra-deepwater Kekra-1 well in early 2019, targeting a carbonate play that could be a game-changer for the country’s burgeoning gas market.

• Repsol’s Rencong-1X well, offshore North Sumatra, Indonesia, is generating strong interest from potential farm-in partners. We expect a deal to be done before the well spuds in Q3 2019.

• In Papua New Guinea, Total’s Mailu-1 well is targeting a giant oil prospect in over 2000 metres of water, potentially opening a new ultra-deep offshore play in the Papuan Basin.

From a licensing perspective, several countries are set to launch new bid rounds in 2019. But only those offering a fair balance of risk and reward will be successful in attracting new investment. Despite recent fiscal revisions in India and Indonesia, we expect lacklustre interest in their latest acreage offerings, and investor appetite is likely to be limited for other 2019 licensing opportunities in the Philippines, Bangladesh and Myanmar.

M&A maintains momentum
M&A spend grew over 60% to US$8.7 billion in 2018 compared to 2017. We expect 2019 to be flat with around US$8 billion of potential deals in the pipeline.

We expect to see divestments in Southeast Asia by primarily US-focused players, such as Hess, ConocoPhillips and Chevron, seeking to redeploy capital towards lower-cost, higher-return opportunities elsewhere.

With a steady supply of international oil companies (IOC) assets potentially becoming available, and the region’s national oil companies (NOCs) on the hunt for new partners to share financial and technical commitments, there should be no shortage of acquisition opportunities in 2019.

Deal activity in Australia is also likely to continue at a brisk pace, as LNG operators position themselves for the next wave of investment, and local producers look to take advantage of a tightening domestic gas market.

Asia-Pacific O&G Outlook 2019
Join the Asia Pacific oil and gas research team as they gaze into their crystal ball and run down some of their top themes and events to look for in 2019.

Fewer project sanctions
Contrary to global trends, 2019 looks a relatively low-key year for new project sanctions in Asia-Pacific. PetroVietnam’s Block B gas development and ConocoPhillips’s Barossa are the largest projects targeting FID over the next 12 months, but both are in danger of being pushed into 2020.

As attention in Australia’s LNG sector turns towards backfilling the existing Pluto and North West Shelf infrastructure, collaboration among operators is becoming a genuine option. Woodside’s Scarborough and Browse are the most likely medium-term candidates to provide new feedgas. But Chevron’s Clio-Acme development may leapfrog both with a surprise 2019 FID if commercial arrangements for third-party access to LNG infrastructure can be finalised. If so, it would be quite a turnaround for an industry not known for playing together in the past.

Riaz Haq said...

#LNG imports in #MiddleEast plummeting. 37% slump in 2018 & prolonged negative outlook is in contrast to region’s 2-year LNG #gas demand surge. Oil prices barely enough to balance the budget of #Gulf monarchies of #SaudiArabia, #UAE, https://www.bloomberg.com/news/articles/2019-01-30/the-middle-east-s-once-hot-lng-market-faces-a-decade-long-slump via @markets

The Middle East was a bright spot for global liquefied natural gas demand in 2015. Now imports have plummeted so much that it could take a decade to recover.

Last year’s 37 percent slump and the prolonged negative outlook is in contrast to the region’s two-year LNG demand surge that outpaced global growth, according to BloombergNEF and ship-broker Poten & Partners Inc. data. The Middle East is now expected to make up less than 4 percent of global imports for at least eight years.

There are only five importers -- Egypt, Kuwait, Jordan, the United Arab Emirates and Israel -- of LNG in the Middle East. Bahrain is expected to join the group this year.

Why are LNG imports falling?
Gas finds in Egypt and the U.A.E. reduced the need for the liquefied fuel, and Jordan increased cheaper pipeline imports. “Domestic gas resources have been the main reason for LNG imports being subdued,” said Fauziah Marzuki, a senior associate at BNEF. Locally produced “gas will always be preferred over imports, within certain cost parameters of course.”

Which countries are leading the decline?
Egypt, the region’s biggest LNG importer in 2016 and 2017, will halt purchases this year and may resume exports thanks to surging domestic supplies from the giant Zohr field. Jordan will rely more on pipeline imports from Egypt, trimming its need for LNG. Bahrain, the only country that will add import capabilities in 2019, isn’t expected to reach meaningful volumes until 2022, according to BNEF forecasts.

Fizzling Gas
Liquefied natural gas imports in the Middle East had a record drop in 2018

What does this mean for Qatari exports?
Qatar, the world’s biggest LNG exporter, has boosted its position in the Middle East’s shrinking market since 2016. The exit of Egypt from the scene will likely erode that status. Almost half of Egypt’s imports came from Qatar last year. Still, the region isn’t a major market for Qatar and growth in Asia will more than offset declines in the Middle East.

How will this impact global markets?
Imports of LNG in the Middle East are dwarfed by Asia. Supply of the fuel -- driven by the U.S., Qatar and Australia -- is expected to rise almost 18 percent by 2030, and demand will grow more than double that rate. Even Kuwait, the region’s biggest importer, barely registers in global terms. Its imports are even less than the smaller markets in Asia such as Thailand, Bangladesh and Pakistan.

LNG Minnow
Middle Eastern countries to comprise just 3 percent of global demand in 2019

Riaz Haq said...

#Pakistan #energy #imports up 3.8% in nine months (July 2018-March 2019) of current fiscal year , led by liquefied natural gas (#LNG) , higher by 49.3% and crude oil up 15.19%. Cost of #petroleum product dipped 15.33% during the nine-month period. https://www.hellenicshippingnews.com/pakistan-oil-import-up-3-8pc-in-nine-months/

The country’s oil import bill went up 3.8 per cent year-on-year to $10.6 billion during 9MFY19, from $10.22bn in same period last year, according to data from the Pakistan Bureau of Statistics (PBS).

The rise in imported value of the petroleum group was led by surge in liquefied natural gas, higher by 49.3pc and crude oil 15.19pc. On the other hand, cost of petroleum product dipped 15.33pc during the nine-month period, whereas a 33.9pc decline was recorded in terms of the quantity imported, bringing the total down to 7.57 million tonnes.

The overall import bill during July-March FY19 fell by 7.96pc year-on-year to $40.75bn, leading to a 13pc decline in trade deficit to reach $23.67bn.

Barring petroleum and agriculture groups, all other categories saw their value of imports shrink during the period under review.

Food imports contracted 9.92pc to $4.73bn during July-March 2018-19, from $4.26bn in corresponding months last year. This decline was largely due to a 10.22pc fall in the value of palm oil, which decreased to $1.39bn in 9MFY19, from $1.54bn.

Import bill of the machinery clocked in at $6.74bn during the nine months, lower by 20.54pc, from $8.48bn in same period last year. The biggest contributor to the decrease was power generating machinery, which plunged by 49.09pc, followed by 17.26pc contraction is electrical and 8.86pc in telecom.

Similarly, transport group — another major contributor to the trade deficit – also receded during July-March FY19 as it posted a 35.7pc decline, with decrease in imported value of almost all sub-categories.

On the other hand, agriculture imports inched up by 1.6pc to $6.58bn, from $6.47bn on the back of 16.49pc increase in fertiliser, 13.32pc insecticides and 7.31pc medicinal products.

Textile exports inch up

The textile and clothing export proceeds posted a paltry growth of 0.08pc year-on-year to $9.991bn during 9MFY19, as against $9.983bn in same period last year.

Product-wise details show that exports of ready-made garments went up by 2.02pc, knitwear 9.29pc, bedwear 2.69pc while those of towels declined 1.85pc and cotton cloth 2.09pc.

Among primary commodities, cotton yarn exports dipped by 15.44pc, yarn other than cotton by 3.23pc, raw cotton 71.84pc whereas made-up articles — excluding towels — increased by 1.26pc and tents, canvas and tarpaulin gained 3.49pc in value during the period under review.

The slow growth in textile and clothing exports comes despite government’s support in the form of cash subsidies, special export packages and multiple rupee depreciations during the last year.
Source: Dawn

Riaz Haq said...

#Qatar emerges as front-runner for long-term #LNG deal for #Pakistan, one of the world’s fastest growing LNG markets. Pakistan is seeking long-term supply contracts for second LNG terminal, which can receive 600 million cubic feet per day of natural gas. https://reut.rs/2IHTHzT

Qatar has emerged as the front-runner for a long-term gas supply deal to Pakistan, a senior Pakistani official said on Friday, with the cabinet of Prime Minister Imran Khan set to decide in the coming weeks on an agreement.

Pakistan, with 208 million people, is running out of domestic gas and has turned to liquefied natural gas (LNG) imports to alleviate chronic energy shortages that have hindered its economy and led to a decade of electricity blackouts.

Qatar is already Pakistan’s biggest gas supplier after signing a 15-year agreement to export up to 3.75 million tonnes of LNG a year to the South Asian country. That 2016 deal supplied Pakistan’s first LNG terminal.

Emerging as one of the world’s fastest growing LNG markets, Pakistan is looking to secure a long-term supply contracts for its second LNG terminal, which can receive 600 million cubic feet per day (mmcfd) of natural gas.

Pakistan has already signed a five-year import deal with commodity trader Gunvor and a 15-year agreement with Italy’s Eni, but is seeking long-term agreements for about 400 mmcfd.

Pakistan has been negotiating with eight countries with whom it has signed inter-governmental agreements in recent years, including Qatar, Russia, Turkey, Italy, Oman, Azerbaijan, Malaysia, and Indonesia. A Saudi Arabian delegation representing state-owned Saudi Aramco has also shown interest in a gas deal.

The senior Pakistani official told Reuters that state-run Qatargas put forward the lowest bid for a long-term LNG supply contract that would have a price review after five or 10 years.

“Qatar has offered the lowest price,” said the official, declining to say the amount of LNG or the price offered by Qatar.

Pakistan’s cabinet is in the next week or two expected to decide if it will proceed with a government-to-government deal, when it will also decide on the size, he said.

Cash-strapped Pakistan is most likely to go with the cheapest supplier, in this case Qatar, officials have said. However, the government may choose more expensive rates to bolster its relations with a chosen country.

Khan’s cabinet could also choose to put out an open tender for long-term agreements, said the senior official. However, some energy officials believe direct government-to-government deals could offer better rates than tendering.

The Pakistani official added that Saudi Aramco may sign a long-term supply deal with Pakistan, potentially also providing some of the 400 mmcfd available at the second terminal. (Reporting by Drazen Jorgic; editing by Christian Schmollinger)

Riaz Haq said...

Gas shortage to increase by 157pc next fiscal year
Khaleeq Kiani Updated April 27, 2019

https://www.dawn.com/news/1478633

Gas shortage to increase by 157pc next fiscal year
Khaleeq Kiani Updated April 27, 2019 Facebook Count

With an addition of 700,000 consumers last year, Pakistan’s gas shortfall is estimated to jump by 157 per cent to 3.7 billion cubic feet per day (bcfd) in fiscal year 2019-20 — almost equal to total gas supplies at present.

The estimates have been made by the Oil and Gas Regulatory Authority (Ogra) that put the gas shortfall increasing almost continuously every year to 6.6bcfd by FY2028.

In its flagship “State of the Industry Report 2017-18”, the authority noted that the (natural gas) demand-supply gap during FY2017-18 was 1,447mmcfd and that this gap was expected to rise to 3,720mmcfd by FY2019-20. The regulator put the total gas demand at about 6.9bcfd in fiscal year 2019-20 compared to total supplies of about 3.2bcfd.

It said the demand would increase to 7.7bcfd by 2024 but domestic supplies would fall substantially to 2.3bcfd, leaving a shortfall at 5.5bcfd. The shortfall would practically be about 3.6bcfd in FY2024 as the gap would be partially met by about 1.9bcfd of imported LNG.

The domestic gas production would continue to decline from about 3.3bcfd at present to less than1.6bcfd by 2028 while the gas dem­and would keep going up to reach 8.3bcfd by that year. Ogra estimated that despite the induction of all the import options, including LNG, Turkmen­istan-Afgha­n­is­tan-Pakistan-India (TAPI) and Iran-Pakistan (IP) pipelines, the total supplies would decline to 3.7bcfd by 2028, creating a net shortfall of about 4.6bcfd, more than total supplies at present.

The regulator said the gap was rising because of higher consumption in almost all the major sectors particularly power, domestic, fertiliser, captive power and industry as the supplies were not keeping pace with higher demand.

Both the gas utility companies added around 0.7 million domestic, commercial and industrial consumers, in their respective systems, during fiscal year 2017-18. Consumer addition is incre­asing the gap between dem­a­nd and supplies, day by day. Especially in winter, the gas demand further increased and as a result the government is being forced to curtail supplies to various sectors.

Despite this, the natural gas is a major contributing fuel in the country’s energy mix. Its share in the primary energy mix is around 48pc.

There is a significant rise in demand and consumption of gas by residential and domestic consumers owing to price differential vis-a-vis other competing fuels, i.e. liquefied petroleum gas (LPG), fire wood and coal. The LPG presently accounts for about 1.3pc of the total primary energy supply in the country.

The current size of LPG market is around 1.3 million tonnes per year. The LPG consumption has increased by 5.88pc in 2017-18 compared to the previous year.

LPG consumption during FY2017-18, stood at around 3,508 tons per day. Local production catered for around 58pc, the rest was imported.

The share of re-gasified LNG in the overall gas supply increased to 23pc in FY 2017-18. The total gas consumers were more than 9.2m by the end of FY2017-18, including 6.3m in the SNGPL network and 2.9m in the SSGCL network.

The power sector was the main consumer of natural gas during FY 2017-18, consuming 37pc, followed by domestic sector 20pc, fertiliser 17pc, captive power 10pc, industrial sector 9pc, transport 5pc, and commercial sector having 2pc share.

Punjab had the highest 50pc consumption, followed by Sindh 39pc, Khyber Pakhtunkhwa 9pc and Balochistan 2pc. Natural gas supplies during the year stood at 4.357bcfd, of which Sindh supplied 50pc, whereas Khyber Pakhtun­khwa, Balochistan and Punjab supplied 12, 11 and 4pc respectively. The remaining 23pc of gas was imported in the form LNG.


Riaz Haq said...

#Pakistan #oil #import bill surges in 10 months. Oil imports up by 4% year-on-year to $11.899 billion due to the rise in global oil prices. Liquefied Natural Gas (#LNG) imports soared by 46.06%, while that of liquefied petroleum gas LPG plunged 5.2%. https://www.hellenicshippingnews.com/pakistan-oil-import-bill-surges-in-10-months/

While the overall imports declined slightly during the first 10 months of the current fiscal year, the country’s oil import bill went up by four per cent year-on-year to $11.899 billion, Pakistan Bureau of Statistics reported.

The import bill of three sectors—agriculture, textile and oil posted positive growth, while imports from almost all other groups including machinery-related items contracted during the months under review.

The PBS data for July-April period showed the overall import bill during the 10-month period declined by 7.88pc year-on-year to $45.47bn.

Product-wise data showed that petroleum group imports rose 4.1pc, to $11.89bn during the period, with the largest surge coming from crude oil, up 14.3pc.

The cost of petroleum products’ imports dipped 14.38pc during the 10 months, whereas a 13.87pc decline was recorded in terms of the total quantity imported; bringing the total down to 7.42 million tonnes.

On the other hand, Liquefied Natural Gas (LNG) imports soared by 46.06pc, while that of liquefied petroleum gas plunged 5.2pc.

The data for the period shows a changing trend in the imports, with machinery-related imports registering a marginal decline, and oil imports — including LNG — bill increasing in large part due to the rise in global oil prices.

Machinery imports, for July-April FY19, plunged by 21.06pc to $7.49bn, from $9.49bn last year led by shrinking textile- related imports and power generating machinery at 7.46pc and 52.03pc, respectively.

However, mobile phone imports also dipped by 6.86pc while those of construction machinery declined 34.67pc. Transport group, another major contributor to the cumulative trade deficit, also witnessed a steep fall of 34.89pc during the period under review. The months saw a dip in imports of almost all transport-related items. Food imports — the second leading contributor to the total import tally — shrank 9.85pc during the period under review.

The country’s food imports dropped by 9.85pc to $4.7bn in the first 10 months of the current fiscal year, as compared to the imports of $5.216bn recorded during the same period last year.

Product wise details show import of palm oil witnessed a sharp decrease of 10.99pc; pulses 2.3pc; milk, cream and milk food 10pc; spices 5.5pc; soybean oil 34.3pc; sugar 25.46pc; and other miscellaneous food commodities 9.41pc. The import bill of tea recorded a nominal increase of 0.61pc during the period under review.

Textile exports inch up: Textile and clothing exports proceeds posted a negative growth of 0.02pc YoY to $11.12bn during the 10 months whereas cumulative textile proceeds during the period under review also posted marginal decline of 0.11pc YoY to $19.16bn.

Product-wise details show that exports of ready-made garments went up by 3.21pc, knitwear up 8.76pc, bed wear 2.4pc, whereas towel exports declined 1.39pc, while that of cotton cloth declined by 2.7pc in value.

The slow growth in textile and clothing exports comes despite government’s support in the form of cash subsidies, special export packages and multiple rupee depreciation during the last year.

Among primary commodities, cotton yarn exports declined by 15.78pc, yarn other than cotton by 0.29pc whereas made-up articles — excluding towels — increased by 1.15pc, tents, canvas and tarpaulin up by 1.41pc with proceeds from raw cotton dipping by 67.2pc during the period under review.
Source: Dawn

Riaz Haq said...

Powering #Pakistan. There is enough #coal at #Thar to cater for the #energy needs of the nation for two centuries. Imported #LNG #gas costs about 40% higher than Synthetic Natural Gas (#SNG) produced from Thar Coal. #power #electricity https://www.pakistantoday.com.pk/2019/07/15/powering-pakistan/#.XS3_3iOqyAc.twitter

BY DR FARID A MALIK

Pakistan is finally on the world Coal Map. On July 08, 2019 power generated from Thar Coal entered the national grid; electricity is now being produced by combustion of the local Lignite. At 175 billion tons this is one of the largest coal deposits of the world. The coalfield is spread over 9,000 square kilometers. It was discovered in 1996 by a joint investigation of Geological Survey of Pakistan (GSP) and United States Geological Survey (USGS). It is an important milestone, now that power can be generated by using indigenous fuel. Currently I am working on building an energy system based on this coal by using 21st century technologies.

In 1952 another important event took place when natural gas was discovered at Sui. With 12 trillion cubic feet (TCF) this was the largest deposit of its time. The Government of Pakistan (GoP) established a joint venture company called Pakistan Petroleum Limited (PPL) that pumps out gas from this resource. Two public sector companies distribute gas across the country. Sui Northern Gas Pipelines Limited (SNGPL) brings gas upcountry to Punjab and KP while Sui Southern Gas Company (SSGC) covers Sindh and Balochistan. The pipeline is spread over 20,000 kilometers, it is a state of the art system designed and built by local expertise. For fifty years (1952 to 2002) the energy needs of the nation were catered for by this source. Unfortunately due to misuse and mismanagement the resource has been depleted before its time. It is down to 2TCF now. Gas is being imported from Qatar to meet the shortfall of about 2000 mmcfd. The price of this imported gas at $11.4 per mmbtu is unaffordable. In the US this gas is sold at $3 per mmbtu.

Sui Gas was the energy gift of the founding fathers of Pakistan while Thar is our contribution to the coming generations which will long be cherished and utilised

There is enough coal at Thar to cater for the energy needs of the nation for two centuries. This resource can power Pakistan to prosperity. Mining of coal was the major challenge which has been overcome by a joint venture company formed by ENGRO and Government of Sindh (GoS) called SECMC (Sindh Engro Coal Mining Company). Coal is mined and then delivered at site to a power generation company called ENGRO Powergen Thar.

As Chairman Pakistan Science Foundation (PSF), I started working on the development of Thar Coal in 2004. In August 2018, after 14 years I stood at the bottom of the mine to touch the black gold for the first time. It was a dream come true. Sui Gas was the energy gift of the founding fathers of Pakistan while Thar is our contribution to the coming generations which will long be cherished and utilised.

No nation can prosper without covering its energy needs. Imported fuel cannot ensure sustainability. Rising costs of power and gas have substantially increased the cost of production rendering our exports non-competitive. The fuel advantage that we once had no longer exists. The black gold at Thar can revive the much needed competitiveness. Coal is being mined in Block II by SECMC while a Chinese consortium has started to dig in Block I. Thar Coal Energy Board (TCEB) has thus far demarcated 14 blocks for exploration.

Imported Liquefied Natural Gas (LNG) costs about 40% higher than Synthetic Natural Gas (SNG) produced from Thar Coal. Above ground gasification after mining is an established technology. There are several plants in Germany, South Africa, China and the US where coal is being used to produce multiple products that include; gas, fertilizer, diesel and chemicals. Pakistan can benefit from this know how that already exists.

Riaz Haq said...

#Italian, #Chinese major petroleum companies vie in #Pakistan's mega #LNG tender worth $5 billion to $6 billion. Pakistan to be a big growth driver in global LNG demand. Wood Mackenzie estimates the country will need 25 million tonnes a year. #energy #gas https://reut.rs/2LB7SbJ

Eni and PetroChina’s Singapore unit were joined by the trading arm of Azeri state oil company SOCAR and commodities trader Trafigura in placing offers, the sources said.

Pakistan LNG, the state-owned company that issued the tender, declined to name any bidders.

“The technical bids for our long-term LNG supply tender were received and opened yesterday. Evaluations are underway,” it said.

SOCAR Trading SA confirmed it had bid. Trafigura said it does not comment on tenders. A spokesperson noted Trafigura was a stakeholder in the terminal due to receive the tendered LNG.

“Trafigura owns 150 (million cubic feet a day) of LNG import capacity in that facility, which is key to its plan to supply LNG and gas to Pakistan’s private sector,” the spokesperson said.