ISLAMABAD, Jan 7: The government is anticipating the energy crisis to worsen in the next two years due to a 50 per cent increase in the demand and a rather slow improvement in the supply, it is learnt.

The power shortage that has been estimated to remain in the range of 1000-2000MW during the current year is likely to cross 3,000MW next year and to increase to about 5,300MW by 2010. Overall, Pakistan’s total energy requirement is expected to be around 80 million tons of oil equivalents (MTOE) in 2010, up by about 50 per cent from the current year’s 54 MTOE.

“Since four out of five major initiatives, originally planned for meeting this demand, are uncertain at present, the shortage could be anybody’s guess,” said a senior government official.

The federal government has decided to convene two back-to-back meetings on Tuesday to take stock of the situation. Prime Minister Shaukat Aziz will preside over a meeting of all stakeholders, including officials from the Planning Commission, ministries of water and power, petroleum and finance and power and gas utilities, and oil and gas producers and suppliers to examine repercussions and possible solutions.

Ahead of that meeting, Minister for Water and Power Liaquat Ali Jatoi will chair a meeting of oil and gas utilities to see how soon these shortages could be minimised and power plants on maintenance be brought on line.

An official, who is part of the team preparing for the prime minister’s meeting told Dawn that the energy shortage was severe and widespread in almost all areas, while different sectors contributed to each other’s problems. “Natural gas, power, and oil shortages were all posing risks to the economic growth in medium to long term period,” he said.

Adviser on Water and Power Riaz A. Khan said the situation was complex. He said the development of water resources would resolve the problem in the long run but in the short term there was a limit to constructing costly thermal power projects given their high economic costs.

He said the independent power projects currently under construction would not begin productions before 2009. The Orient Power Project, the Halmore, the Saif, the Sapphire and Water and Power Development Authority’s (Wadpa) new plants would be commercially operational in March 2009, he said.

A major shortfall is expected in natural gas supplies, another official said. According to an official energy demand forecast, the demand for natural gas, having about 50 per cent share in the country’s energy consumption, would increase by 44 per cent to 39MTOE from 27MTOE currently.

The government has planned to add an overall power generation capacity of about 7,880MW by 2010. Of this, about 4,860MW is to be based on natural gas, accounting for 61 per cent of the capacity expansion. However, the gas-based power expansion of about 4,860MW would remain in doubt since these estimates are based on three gas import options for completion in 2010, 2015 and 2020.

This means that the major part of about 4,860 gas-based plants would not be available and the difference would be met through other costly options. "Even if the physical work is started today, it will take at least seven years to complete a pipeline project", said a senior petroleum ministry official. He has no answer as to when a pipeline project could be taken in hand from now on. The fifth initiative of the Liquefied Natural Gas (LNG) import is expected to remain on schedule and start delivering about 0.3 billion cubic feet of gas (BCFD) by 2009 and another 0.5 BCFD by 2015.

Partly contributed by gas shortfalls, the power shortage is expected to be little over 5,250MW by 2010, said a Planning Commission official, adding that the oil demand would also increase by over 23 per cent to about 21 million tons in 2010 from the current 16.8 million tons. This would leave a total deficit of about nine million tons of diesel and furnace oil imports, he said. Since gas shortfalls were expected to be much higher, the country would need to enhance its dependence on imported oil, increasing pressure on foreign exchange situation, he added.

The government had planned five major initiatives to meet these energy requirements under the Energy Security Plan. These include three gas import pipelines, the Gwadar port as energy hub and the LNG import. However, four of these measures, including the three import pipeline projects, show no signs of progress for various reasons, while concentration on energy facilities in Gwadar would chiefly depend on security situation, besides oil and gas import pipelines.

Pakistan's gas reserves are 32.8 TCF at present with reserve-production ration in the order of 27 years - domestic production is not expected to grow substantially. The power sector demand represents 41 per cent of total gas consumption; general industries 24 per cent; fertiliser 7.8 per cent; domestic/commercial 22.8 per cent; and cement and the Condensed Natural Gas (CNG) 1.5 per cent and 2.8 per cent, respectively.

The demand growth has been up to 8.5 per cent in recent years and is expected to grow by about seven per cent with power industries and domestic accounting for 82 per cent. Gas demand already displays seasonal patterns with the national demand growing in winter beyond transmission capacity and large users mainly industries, power plants and cement are curtailed during winter months to ensure supplies to domestic, commercial and small industries or fertiliser. The annual production at present is about 1.16 TCF.

"The present government could not initiate any major project in the last seven years to meet future energy demand", said former secretary petroleum Dr Gulfraz Ahmad. The projects that were launched in the 1990s met the demand growth in the last few years, he said.

Former petroleum minister Usman Aminuddin said that Pakistan was currently in the midst of a severe energy crisis and development and gasification of Thar coal seemed the only hope in future.

According to the World Bank estimates, a gap (supply shortage) of about four per cent of the total demand was expected in 2010. Even though this would be met by the LNG imports, it would again increase to 20 per cent of the total demand. The Bank said that the indigenous gas supply would fall from 32.6 MTOE in 2010 to 20.7 MTOE in 2025, while the ‘gas supply-demand gap’ would rapidly increase as demand was expected to grow continuously, quadrupling in 2025. It said that the gas imports will represent almost 67 per cent of natural gas supply in 2025. One can, therefore, gauge the quantum of shortage in case import pipelines are not materialised.