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Development of new natural gas fields with the help of foreign investors is proceeding, with
Pakistan's government expecting recently discovered fields to add about 1 billion cubic feet
per day (Bcfd) to Pakistan's natural gas production. Currently, fields in production include
Sawan at about 366 Mmcfd, Bhit at about 316 Mmcfd, and Zamzama in Sindh province
producing about 248 Mmcfd, but possibly able to produce 380 Mmcfd following a new gas
discovery in January 2004.
Pakistan's government restated its willingness to permit a natural gas pipeline linking Iran's
massive reserves to Indian markets across Pakistani territory. Pakistan would earn transit
fees for Iranian gas supplied to India and also would be able to purchase some gas from the
pipeline when and if its own demand was sufficient. While Iran and Pakistan have shown
great interest in the project, India has been reluctant to move forward as long as political and
military tensions with Pakistan over Kashmir persist. The issue was due to be discussed at
bilateral talks between India and Pakistan in June 2004, although negotiations are still
expected to be protracted and difficult. Iran is offering India that it will cover 60% of the
construction costs of the pipeline, but India remains wary of Pakistani access to its energy 124 supply. Indian officials said the plan could be considered if Pakistan can provide security
guarantees for the $3 billion project. Pakistan could earn about $600 million annually in
transit fees from the pipeline.
Another natural gas import possibility is an eventual link with the Dolphin Project, a scheme
to supply gas from Qatar's North Dome gas field to the United Arab Emirates and Oman, via
a sub-sea pipeline from Oman. Even though Pakistan has signed a preliminary agreement to
eventually purchase natural gas from Qatar, it remains to be seen how the initial stages of
the pipeline project go before a route to Pakistan can be conclusively negotiated.
Pakistan has 18 gigawatts (GW) of electric generating capacity. Thermal plants using oil,
natural gas, and coal account for about 70% of this capacity, with hydroelectricity (hydro)
making up 28% and nuclear plants 2.5%. Pakistan's total power generating capacity has
increased rapidly in recent years, due largely to foreign investment, leading to a partial
alleviation of the power shortages Pakistan often faces in peak seasons. Rotating blackouts
("load shedding") are, however, still necessary in some areas. Transmission losses are
about 30%, due to poor quality infrastructure and a significant amount of power theft.
Periodic droughts affect the availability of hydropower. With much of the Pakistan's rural
areas yet to receive electric power, and less than half of the population connected to the
national grid, significant power demand growth is expected in the long term, though in the
short term, Pakistan has some excess generation capacity.
The electric power sector in Pakistan is still primarily
state-owned, but a privatizat...
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This note was uploaded on 10/02/2010 for the course MBA 32343 taught by Professor Samghouri during the Spring '10 term at Karachi Institute of Economics & Technology.
- Spring '10