International researchers identified that the natural gas demand during 2022 is expected to fall and remain subdued up to 2025. Europe’s surging pursuit of LNG to phase out Russian pipeline supply and limited global LNG export capacity additions raise the risk of prolonged tight markets. Faster development and implementation of clean energy transition strategies, mainly in mature gas markets, would ease price competition and assist emerging markets access supplies that can contribute to short-term improvements in carbon intensity and air quality.
Today’s record-high gas prices researchers also identified that, are depressing demand and causing some gas users to switch to coal and oil, while present sharp cuts in Russian gas flows to Europe are raising alarms about supplies ahead of the winter. It is also said that the turmoil is damaging natural gas’ reputation as a reliable and affordable energy source, casting doubts about the role it was expected to play in assisting developing economies to meet growing energy demand and transition away from more carbon-intensive fuels.
Statistics showed that the present developments have led to a considerable downward revision of gas growth prospects. Global gas demand is set to rise by a total of 140 billion cubic metres (bcm) between 2021 and 2025 less than half the amount forecast formerly and smaller than the 170 bcm increase seen in 2021 alone.
No doubt, Russia’s invasion of Ukraine has exacerbated the tightening supply of natural gas underway since mid-2021, further pushing up prices for consumers and leading to fuel switching and demand destruction. It also casts longer-term uncertainty on market prospects for natural gas, particularly in developing markets where it was to play a central role in energy transitions.
According to the government data, the indigenous supply of natural gas witnessed a fall of almost 5 percent and its contribution registered at 33.1 percent in the total primary energy supply mix of Pakistan. The available statistics for July-March FY2022 showed that an extensive gas network of over 13,513 km transmission, 155,679 km distribution and 41,231 km of services gas pipelines are available to cater to the requirement of millions of consumers. Statistics showed that the number of the consumer has increased from 10.3 million to greater than 10.7 million in Pakistan. The government’s strategies to improve indigenous gas production to meet the increasing demand for energy in the country proved effective.
Presently, the capacity of two Floating Re-gasification Storage Units (FRSU) to Re-gasified Liquefied Natural Gas (RLNG) is 1200 mmcfd. RLNG is being imported to bridge the widening gap between the supply and demand of gas in Pakistan. The average natural gas consumption has reduced from 3,723 mmcfd to about 3,565 mmcfd during July-March FY2022. This also includes 863 mmcfd volume of RLNG from July 2021 to March 2022. From July 2021 to March 2022, the two gas utility companies (SNGPL and SSGCL) laid 67 km gas transmission network, 3,244 km mains and 829 km service lines and connected 108 villages/towns to the gas network. During July-March FY2022, total 259,212 additional gas connections including 257,644 domestic, 1473 commercial and 95 industrial were provided across Pakistan compared to 304,573 additional gas connections offered during the same period in the last fiscal year. It is predicted that gas will be supplied to almost 736,060 new consumers during FY2023.
Experts recorded that gas utility firms have planned to invest Rs 27,669 million in transmission projects, Rs 77,484 million in distribution projects and Rs 8,746 million in other projects bringing the total investment to Rs 113,899 million during FY2023.
Statistics also showed that the consumption of natural gas in the power sector has reduced from 610 mmcfd to 560 mmcfd. The Use of gas in the domestic sector has also declined to 907 mmcfd during July-March FY2022 from 915 mmcfd in the same period the previous year. It is also identified that the commercial sector posted a fall in the use of gas and its consumption was recorded at 62 mmcfd during July-March FY2022.
Earlier it was 65 mmcfd during the first 9-month of FY2022. The Use of gas (CNG) in the transport sector has reduced to 49 mmcfd from 63 mmcfd. The consumption of gas in the fertilizer sector has also declined from 687 mmcfd to 684 mmcfd while the consumption in the general industry has increased to 439 mmcfd from 433 mmcfd. However, total consumption of gas has also reduced to 2,702 mmcfd during July-March FY2022 from 2,773 mmcfd during the same period in FY2021.
Experts presently recorded that Pakistan’s economy still remains critical and various economic indicators suggest that the condition could get worse. The country’s recent decision not to purchase oil and gas from Russia even after a shortage in Pakistan may not be just to please the United States (US). It may be a decision taken due to the downfall of Pakistan’s economy.
Sources recorded that the government of Pakistan will import 20,000 tons of extra gas from Azerbaijan during the next two months to meet its demand in Pakistan. Sources recorded that the Russian petroleum minister would visit Pakistan in January 2023 for holding negotiations on a contract for the import of crude oil from Russia.
The government was working on the TAPI gas pipeline project to import 1300 billion MF Gas yearly from Azerbaijan to meet the gas shortage in Pakistan. No doubt, our gas reservoirs are falling every year which causes extra pressure to import maximum gas to meet the demand. Russia had offered two of its eight kinds of crude oils, which were also processable at Pakistani refineries.
Unluckily presently frequent outages and low-pressure natural gas are being supplied to domestic consumers in Pakistan as it has been declared gas load shedding and low-pressure unconstitutional and illegal. It is also recorded that there was a wide gas supply-demand gap across Pakistan, but the companies were still trying their level best to provide the gas to domestic consumers.