Gas Crisis in Pakistan

Gas is the third-largest energy source consumed around the world. Pakistan has less than a 1 per cent share in world gas consumption. It meets its energy demand through imported and indigenous resources in the ratio of 44:56. Natural gas and imported LNG contribute more than 40 per cent to the country’s current energy mix, including gas resources used in electricity generation. In recent years, the demand for gas has increased rapidly in Pakistan. However, gas exploration and production have declined, and the LNG operational and regulatory framework is weak, leading to a nationwide shortage and increased supply costs.

Chart 1. World Energy Consumption by Source

Chart 2. Pakistan Energy Consumption by Source*

Source: IEA and Pakistan Energy Yearbook.

* Gas, Oil, & Coal share does not include these fuel shares used in electricity generation.

Chart 3. Pakistan Gas Reserves and Production

Source: BP Statistical Review 2021.

PAKISTAN NATURAL GAS SECTOR

In the upstream, 15 gas exploration and production companies work in 55 gas fields spread throughout the country.

The gas distribution and transmission are mainly owned and operated by two state-owned companies _ Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL). A few independent pipelines from Mari and Uch also supply gas to nearby power and fertiliser plants. SNGPL and SSGCL are listed companies with the majority of shares owned by the government.

After the colossal gas discovery in Sui in 1952, the GOP started developing a gas transmission and distribution network. The transmission network (13714Km) and distribution network (183407Km) are spread across four provinces’ main urban areas. The gas exploration/production industry and gas distribution/transmission industry lack competition in Pakistan.