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Natural gas crisis

August 08, 2012

 DR Asim Hussain, adviser to the prime minister for the ministry of oil and natural resources, has warned the nation, at a press conference, of severe gas shortages in the coming winter.

The question here is what role he played when he was the petroleum minister.

When he assumed charge of the ministry in April of 2011, he gave the nation good news of bringing LNG by December 2011. A few months down the line he announced that LNG would come in March 2012. As the winter of 2011 approached, he started talking like an expert about huge reserves of tight gas and shale gas and raised the hopes that solution to the natural gas crisis is round the corner.

Later on pushing the LNG date till June 2012, he started another bout of statements on IP and TAPI pipeline, once again keeping the hopes of the nation high. As if this was not enough, he declared LPG as the fuel of the future and had the SSGC buy an LPG terminal for Rs3bn. Since the demand of LPG fluctuates between summer and winter, the adviser, in order to create demand for LPG the whole year round, started pushing for LPG/air mix plants for the KESC and Kapco.

The cost of LPG/air mix is around $16 per mmbtu compared to furnace oil at $18 per mmbtu and natural gas at $4 per mmbtu.

The adviser recommended that the LPG/air mix be sold to these power companies on a weighted average basis. This will enhance the tariff of all consumers by 40 per cent, a definite kamikaze for the government.

This is the last proposal of the adviser that was sent to the ECC in the first week of July last and has been sent to a committee for further review. None of the above gimmicks, however, yielded any result.

The solution was simple, i.e., we could have put all the discovered fields, on mainstream, that have been lying capped for over two years and capable of producing 500 mmcfd natural gas.

If the processing of raw gas was outsourced, this could have been done in just one year.

He is now creating a national emergency and will ask for waivers from PPRA rules to procure LNG and spend $200m on retrofitting the LPG terminal that can never be completed by this winter.

The adviser, who chose to stay away from available solutions, is palpably responsible for the gas crisis in the country.