Government asked to exploit all sources of energy

Exploration companies call for increasing wellhead gas price.

ISLAMABAD:

As the energy crisis has plagued the economy causing a loss of $64 billion in the last four years, the government should give top priority to power and industrial sectors by exploiting all sources of energy including gas import and coal mining and providing it to the industries in order to save the economy from collapse.

These were the views of energy experts who spoke at the “4th Oil and Gas Pakistan 2012 Forum” held here on Saturday.

MOL Pakistan Managing Director and Pakistan Petroleum Exploration and Production Companies Association (PPEPCA) Chairman Erno Liptak expressed dissatisfaction over the wellhead gas price of $6.6 per million British thermal units (mmbtu) set in the new petroleum policy for 2012 and said the price should be brought at a par with alternative fuels.

Liptak said the government should offer incentives to encourage exploration, adding it should also take measures to arrange one-window facility for the upstream industry.

Gas price for Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline is $14 to $15 per mmbtu while LNG price is being quoted at $16 to $18 per mmbtu. “Why wellhead gas price is just $6.6 in the new petroleum policy,” he asked and called for formulating a fair policy.

Speaking on the occasion, Independent Power Producers (IPP) Advisory Council Chairman Abdullah Yousuf said the growth of economy was directly linked with improvement in the energy sector. “We have failed to keep the momentum in oil and gas production, though demand has risen sharply,” he said, adding the distorted tariff regime should be corrected.

Everyone was after gas because of it being cheaper as the energy sector was not being managed in line with international norms and practices, he pointed out.

“We should prioritise sectors in supply of gas and need a policy shift.” The power and industrial sectors should be given priority while commercial and domestic consumers should be on second place, Yousuf suggested.

Former secretary petroleum Dr Gulfaraz Ahmad said Balochistan brought Pakistan on the world’s map due to oil and gas production, so the province must receive its benefits.

“Local people are better than personnel of Rangers and Frontier Constabulary in providing security for exploration companies,” he said and pointed out that poor law and order situation and insecurity had increased difficulties for the exploration companies.

Economist and former principal economic adviser of the finance ministry Sakib Sherani put losses caused by the energy crisis at $64 billion in the last four years.

He said pipeline and gas import projects were essential for the economy, but the country was facing financial difficulties. He also called for exploiting coal resources to produce cheaper power to tackle the energy crisis.

Khalid Iqbal, Consultant Policy Response of Policy and Research Institute, said the gas pipeline projects would bring peace in the region. “These projects will not only meet the country’s gas requirements but will bring neighbours closer due to more interaction,” he said and pointed out that the US was pushing Pakistan to go for the TAPI gas pipeline so that its companies could get contracts.

Published in The Express Tribune, May 13^th, 2012.