KARACHI: Former prime minister and minister for petroleum Shahid Khaqan Abbasi on Thursday, while addressing a conference on Pakistan’s energy crisis emphasised the importance of natural gas as a short to medium term solution for the country’s energy woe’s.
Abaasi said that during his tenure as the minister of petroleum, pros and cons of all primary energy sources were discussed in detail, adding that during these discussions natural gas ticked all the metrics relative to other primary energy sources.
According to a presentation shared during the conference, natural gas has the least adverse effect on the environment, it is efficient, available and requires relatively lower capital investments compared to other energy sources.
“[Natural] gas is generally purchased on long term agreements”, said Abbasi adding that such agreements limit risk for the suppliers, and ensure long term sustainability in terms of availability.
On the other hand, Abbasi also discussed the drawbacks of other energy sources. “Fuel oil is highly environmentally damaging and the plants are inefficient”, he said adding that the slightest changes in price can result in billions of dollars due to the scale of the whole sector.
The former prime minister also alleged that the Pakistan Tehreek-i-Insaf (PTI) government has entered into unfavourable contracts with Independent Power Producers (IPP), distribution companies (DISCOS) and external suppliers due to which Pakistan has lost billions of rupees.
He blamed the current energy shortage on lack of planning and incompetent negotiations by the PTI government.
“A three year contract offering less than $4.5/mmbtu was forgone by the government”, he alleged, while adding that a lower price was available due to the covid glut and low global demand, instead the government opted for spot cargo at a price of $30/mmbtu.
He further alleged that the PTI government could have saved $5.3 billion if it had initiated well thought out and planned negotiations with the concerned parties.
Abbasi explained that rather than producing energy in Pakistan through inefficient methods and unfavourably negotiated contracts, the country would be better off importing Liquified Natural Gas (LNG) and producing electricity compared to the currently negotiated contracts.
He further said that Pakistan has some of the most efficient gas power plants in the world supporting the argument that more gas would solve the country’s energy problem in the most cost effective way.
Answering a question related to the use of renewable energy sources, Abbasi said that renewables cannot be a viable option due to scale and volume limitations. “Biogas, solar and wind energy all seem very feasible and viable options, however the scale and volume required to maintain a stable grid can’t be found in renewables,” he said.
As the seminar went on Mr.Khaqan was especially critical of the DISCOS, stating “circular debt is in reality pure loss”. Apart from line losses and theft the DISCOS are unable to recover the payments due on the electricity they have supplied to consumers, incurring“pure losses”.
Commenting on the management, Mr.Khaqan said “the CEO’s [of DISCOS] might be gifted engineers, they are not competent enough to run multimillion dollar companies”. This statement supports his argument leaning towards privatization of the DISCOS to improve the situation.
During the Q&A session questions about feasibility of renewables were also asked from Mr. Khaqan, who was clear and pragmatic in his answer stating that “…the scale and volume required to maintain a stable grid can’t be found in renewables”.
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