ISLAMABAD, Dec 4: Pakistan will begin facing gas shortfalls to the tune of 839mmcfd (million cubic feet per day) in 2010, which is expected to reach the 6,708 mmcfd mark by 2025.

Quoting these estimates from the government documents, officials of a foreign bank advised Pakistan’s top energy and financial authorities to go for the liquefied natural gas (LNG) imports and restructure electricity tariffs to attract LNG investors because cross-border gas pipeline imports carried a lot of political and economic risks.

This advice was given at a day-long Pakistan Energy Forum organized by ABN-Amro here on Thursday. The forum was presided over by Finance Minister Shaukat Aziz and attended by almost all top officials of the petroleum ministry, Wapda and other energy sector organizations.

The bank officials also suggested that two low-cost sources of energy, hydel and nuclear, could also not be offered to the private investors because of their highly-political nature.

They said Pakistan’s plans for the cross-border gas pipelines (from Qatar, Iran and Turkmenistan) contained extremely big political risks outside Pakistan and were very difficult to be sold to the international investors and financial institutions given their price tag ranging from $2-4 billion.

Contrary to that, the LNG prices were on the decline in the international market due to over production and some of their sources (Middle East) were in the close proximity of Pakistan and its shipping and transportation costs would be low. However, they did not mention how long the international LNG market would remain depressed.

Pakistan has been trying to replace high cost furnace oil with the increased domestic gas production and imported gas to minimize the foreign exchange loss. It has so far seriously pursued gas imports from Turkmenistan, Iran and Qatar through pipelines.

The ABN-Amro officials, however, said there were a lot of opportunities in the gas sector which suggested foreign investors and financial institutions to invest in the Pakistan energy sector.

Some of these opportunities included the growing power demand in view of economic growth, deregulation and privatization policies of the government, availability of a lot of domestic oil and gas reserves, investments for system expansion, attractive fiscal incentives, the improved financial profile of the gas utilities and positive outlook of Pakistan’s sovereign credit rating.

The forum was informed that the government had planned to construct gas storage facilities to ensure availability of gas during winter peak season to the northern part and power sector of the country.

Azam Khan, deputy managing director of the Sui Northern Gas Pipelines Limited (SNGPL), said the utility was new in the construction of the gas storages, but was jointly working with other partner to help avoid the inconvenience faced by the people during winter season.

He said domestic consumers faced gas loadsheddings particularly in the northern part of the country, including Islamabad, Peshawar, Abbottabad and some other parts of the NWFP and Punjab.

The SNGPL is working with the OGDCL for the supply of gas to the storage from their fields and the process would be completed in four-year time.

He said the company would also invite expert companies in the field of storage to help the SNPL in this plan. The main reason for the shortage is the seasonal swing in the demand of gas during the winters.

The demand of gas for domestic and commercial consumption increases from 26 per cent in summer to 68 per cent in winter. The current year demand for gas in the Northern Areas during the peak season is expected to be 398 mmcfd which would increase to 1,027mmcfd by year 2024-25, he said.

However, after the development of SADKAL gas field as underground gas storage facility and commissioning of Gurguri gas field at Kohat, the gas demand would be under control.

The SNGPL can supply 910mmcfd of gas from SADKAL and Gurguri to the Northern parts of the country. The gas storage would also be helpful to meet seasonal demand for power generation due to reduced output of hydropower plants in winter.

He said the increase in gas sales to power sector during the last year had replaced the import of oil worth $125 million. The SNGPL, he said, was undertaking a new project for the utilisation of 300mmcf additional gas to replace the 2.56 million tons of liquid fuel in power sector which would save another $410 million per year in fuel import.