Abstract
Pakistan has substantial natural gas reserves and a current reserves-production (R/P) ratio of 31 years. The base-case scenario for natural gas consumption reveals that, with no new discoveries, these reserves can meet demand for the next 18 years.
Furthermore, the country enjoys a respectable success rate for natural gas exploration, and with the right policies in place, domestic reserves can be developed to fulfill the incremental gas demand.
The country’s energy sector, particularly power generation, is heavily dependent on fuel oil. This dependence is seen as undesirable, because it is difficult for the already strained economy to bear the load of a rising fuel oil import bill, which has now reached $1 billion/year.
Natural gas is therefore the preferred option, and the government is pursuing a policy of substituting fuel oil with natural gas for electricity generation.
This article analyzes the general natural gas situation in Pakistan, focusing on its projected use, particularly in power generation. We forecast that a real annual gross domestic product growth rate of 4% warrants an annual increase of 5% in power generation, and with a moderate fuel substitution policy, natural gas consumption for power will grow at 8%/year. This translates into overall natural gas consumption growth of 6%/year.
Read the article here.
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