ISLAMABAD: After talking at length on his government’s performance in restoring economic growth and “eliminating loadshedding”, Prime Minister Shahid Khaqan Abbasi now turned his attention towards the oil and gas sector, touting increased consumption of primary fuels as a sign of economic health and growing industrial activity.

In 2013, he said, the total primary energy supplies of the country were 65 million tonnes of oil equivalent which in 2017 has increased to 85m tonnes of oil equivalent depicting an increase of 23 per cent.

It is expected that total primary energy supplies of the country for 2018 will be over 85mn tonnes of oil equivalent.

He recalled that the gas price for first slab of residential consumers was Rs106 per million British thermal units (mmBtu) in 2013 which now stood at Rs110mmBtu, showing a minor increase of Rs3.7 during the five years.

He said following the 18th Constitutional Amendment, a Model Petroleum Concessions Agreement was developed in consultation with all provinces and 46 new exploration licenses were granted during the present government tenure.

After approval of declaration of commerciality and field development plans, 51 new development and production leases had been granted in five years while 73 supplemental agreements were signed to convert old licences into the new regime under latest Petroleum Policy 2012.

He said during last five years, a record number of 446 new wells were drilled which included 221 exploratory wells and 116 new discoveries were made which showed a 50pc success ratio.

In the oil sector, 35,000 barrels per day oil production was added from the new and total production crossed for the first time 100,000 barrels per day. About 900 million cubic feet per day gas was added from new discoveries which, despite depletion effect of old fields, enabled the system to maintain the indigenous gas production above 4,000 mmcfd.

Gas production from some fields could not be previously commissioned due to non-establishment of processing plant on account of various reasons and the PML-N government established long-awaited processing plant at Kunnar-Pasaki Deep fields besides gas processing plants at Nashpa, Makori and Gambat South which together contributed in doubling the production of Liquefied Production Gas (LPG).

He said the Gas Development Surcharge distribution to the provinces stood at Rs73 billion in 2017 compared to Rs30bn for 2013. During the tenure, a record 1,700km of high pressure gas transmission lines were commissioned including augmentation project for transport of 1,200 mmcfd gas (regasified LNG) from Port Qasim to upcountry. In addition, two more South-North Gas pipelines are being pursed in collaboration with China and Russia.

On top of that, over 25,000km gas distribution lines and two million new connections were provided which increased the consumers from seven million to nine million. For the first time, he said the government adopted a merit policy where gas connections were provided on first come first serve basis.

He said import of LNG was a major success of his government as previous governments made five attempts to import LNG and none succeeded. He said two LNG Storage and Regasification Units of 1,200 mmcfd gas had been commissioned and LNG was being procured from international suppliers at most competitive rates through a mix of government-to-government contracts and competitive bidding.

The LNG flow has enabled the continuous operation of CNG stations, industry and fertiliser plants and was able to export 0.6 million tonnes of urea last year compared to one million tonnes imported in 2014.

Furnace oil utilisation in old power plants had been replaced with cleaner and competitive gas. In addition, new gas based power plants having 62pc efficiency have been established. The LNG utilisation in power sector is resulting in $1.5-$2bn saving on an annual basis on account of fuel replacement.

He said work on Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project has started, which was dormant since long and is expected to deliver gas in 2020. Moreover, sale and disposal of Liquified Petroleum Gas (LPG) has been made transparent through competitive bidding by elimination of old quota system and its prices reduced from Rs2500 per cylinder to Rs1200.

Cleaner fuels were introduced and new storages created besides introduction of pipeline from Karachi to Lahore being dualised from diesel alone to petrol as well to allow transportation of motor gasoline to avoid road congestions.

Also, a new White Oil Pipeline from Lahore to Peshawar was being constructed for transportation of diesel and petrol for which investment of Rs1bn would be made while import of furnace oil was being gradually eliminated and there would no import of furnace oil after 2019.

Pakistan Refinery Ltd was being converted into deep conversion oil refinery along with capacity enhancement from 50,000 to 100,000 barrels per day while two more state-of-the-art oil refineries of 250,000-300,000 barrels per day will be constructed including one by Parco Coastal Refinery project near Hub costing $5bn and an upcountry refinery project to be located near Lahore along with crude oil pipeline from Karachi to refinery location costing $6-7bn.

Published in Dawn, May 31st, 2018