Pakistan's Gas Import Plans Hit by Floods, International Sanctions

Strategic Insights -

Pakistan's efforts to meet its increasing energy demand have been severely affected by the ongoing floods, which have damaged infrastructure and disrupted gas production. The country, which was forecast to produce 38.2 billion cubic meters of natural gas this year, is now likely to fall short of its target due to the devastating floods. The situation has become more critical as international sanctions against Iran and a contract dispute with a European energy supplier have also impacted Pakistan's gas import plans.

Key Takeaways:

  • Pakistan's gas production is expected to fall short of the 38.2 billion cubic meters target due to the ongoing floods, which have damaged infrastructure and disrupted gas production.
  • The floods have submerged over 17 million acres of farm land, forced production cuts at the nation's largest gas field at Qadirpur, and prompted the closure of pipelines and processing plants.
  • Pakistan was planning to speed up liquefied natural gas (LNG) imports, which are more viable than pipeline imports, but the start of LNG imports has been pushed back to 2014 due to a contract dispute with a European energy supplier.
  • The "peace pipeline" with Iran, scheduled to be finished by 2014, will be delayed by at least four years due to international sanctions on trade with Iran.
  • Iran has been one of the three aid providers for Pakistan, sending 330 tonnes of basic items, including tents, foodstuffs, and medicines, to the country so far.
  • Pakistani authorities are facing huge power shortages, and the government is desperate to find alternative energy solutions.

Statistics:

  • 38.2 billion cubic meters: Pakistan's forecasted natural gas production for the year.
  • 17 million acres: The amount of farm land submerged due to floods.
  • 2011: The year when the first LNG terminal was supposed to be built.
  • 2014: The new estimated start year for LNG imports.
  • $7.4 billion: The cost of the "peace pipeline" with Iran.
  • 4 years: The delay in the completion of the "peace pipeline" due to international sanctions.
  • 330 tonnes: The amount of aid sent by Iran to Pakistan, including tents, foodstuffs, and medicines.

Sources:

  • "Pakistan is desperate as it faces huge power shortages," said Alexis Aik, head of the global gas team at FACTS Global Energy in Singapore.
  • Bloomberg News
  • The Financial Daily