Source:

August 22, 2010

Pakistan, experiencing its worst- ever flooding, will face increasing shortages of natural gas and electricity because of international sanctions against Iran and a contract dispute with an European energy supplier.

“Pakistan is desperate as it faces huge power shortages,” said Alexis Aik, head of the global gas team at FACTS Global Energy in Singapore. “It was looking to speed up liquefied natural gas imports, which are more viable than pipeline imports.”

The CHART OF THE DAY shows the proportion of gas relative to total energy used in Pakistan, India, China, Japan and Asia Pacific as a whole, based on data compiled from BP Plc’s Statistical Review of World Energy. Pakistan has traditionally been self-sufficient in gas, even as the fuel accounted for 52 percent of total energy last year, almost fivefold the Asia Pacific region’s average.

Self-sufficiency has become a liability amid almost a month of flooding, and the disaster means that Pakistan will fall short of the 38.2 billion cubic meters of natural gas it was forecast to produce this year, Aik said in an e-mail last week. Floods have submerged more than 17 million acres of farm land, forced production cuts at the nation’s largest gas field at Qadirpur and prompted the closure of pipelines and processing plants.

LNG imports, supposed to start as early as 2011 when the first terminal is built, will begin in 2014, Aik said, as the Supreme Court in April asked the government to restart the supply-contract process after questioning an agreement signed in February with Paris-based GDF Suez SA. Much of the LNG was expected to be shipped in from Qatar.

Separately, the $7.4 billion “peace pipeline” with Iran, scheduled to be finished by 2014 will be delayed by at least four years because of sanctions on trade with Iran imposed through the United Nations and U.S., Aik said. Construction on the Iran side of the border remains on pace for completion in 2011, Aik said. The two nations signed a contract in June which said Iran would supply the equivalent of 29 percent of Pakistan’s current consumption of natural gas.