ENERGY SECURITY OF PAKISTAN

Prospects and Challenges

Presentation to Ghulam Ishaq Khan Institute Mechanical Engineering Dept. October 26, 2011
PresenterAsimRiaz

I seek refuge of Allah from the outcast satan Indeed, in the creation of the heavens and the earth and (in) the difference of night and day, there are signs for men of understanding. We are here to make a difference Men who remember Allah, standing, sitting, and reclining and think deeply on the creation of the heavens and the earth; Our Lord! Thou hast not created this in vain! Glory be to Thee! Then give us salvation from the penalty of the hell fire.
Quran, Al-Imran-190-191

Allah is the protecting Guardian of those who believe. He brings them out of the darkness into the light... Quran, Bakrah-257
Prerequisite Problems
Hyperlink

Solutions

Concept of Energy Security

State of Energy Sector

Global Perspective

Way Forward

Reviewed by: Mr. Zakauddin Malik, Former MD and Chairman OGDCL Mr. Ashfaq Mahmood, Ex-Secretary M/o Water & Power Mr. Muhammad Raziudin, Former MD OGDCL, CEO ARL

OUTCOMES Independence Maintain degree of freedom in foreign policy Sustainable economic development Reduced risk interruptions to

Adequacy

Diversity
Energy Security

Reliability

The Economy is not vulnerable to external shocks

Viability

Affordability

Economic Growth Population Urbanization Rural Electrification Life Style DSM Energy Conservation Pollution Water Air Climate Change Global Warming Using R.E, Clean Coal technology, CCS, mitigation

Demand Growth

Supply Challenges

Policy Planning Technology

Conventional Oil, Gas, Coal Renewable Hydro, Solar, Bio Energy Options Indigenous Imported Oil & Gas Power Realization of Indigenous Resources Import options Vulnerability to Shocks, interruptions Step up exploration Security of supply is simply Energy Security

Environmental Impacts

Security of Supply

Ref: Dr. Steven E. Koonin, BP

State of Pakistans Energy Sector

 TOE stands for Ton of Oil equivalent and m Stands for Million so we write mTOE 1 TOE = 42 Giga Joules = 7.4 Barrels of Oil 1000 Liter Petrol = 0.86 TOE 1000 Liter Diesel = 0.98 TOE 1 MWh = 0.22 TOE @ 39% efficiency 1 TOE = 4.54 MWh@39%, 11.62 MWh@100% 1 Million Cubic Feet of Gas = 23.4 TOE
Hyperlink

Gas Oil Coal Hydro R.E

Geological Potential: 282 Trillion Cubic Feet Discovered: 54 TCF Produced: 26 TCF Remaining: 27.6 TCF Production: 1.45 TCF Reserve to Production (R/P) Ratio: 19 Consumption: 1.27 TCF
Geological Potential: 27 Billion Barrels Discovered: 1 Billion Barrel Remaining: 306 Million Barrel R/C Ratio: 2.3 R/P Ratio: 13 Net Oil Imports: 82% Production: 23.7 MB Consumption: 145 MB Geological Potential: 186 Billion Tons Proven: 3.45 Billion Tons Production: 3.48 Million Tons Consumption: 8.4 Million Tons 1.85% of Coal Potential is realized; 66% of Coal is imported in TOEs

Hydro-Electric Potential: 55,000 Megawatt (MW) Realized: 12% Installed Hydel Capacity: 6444 MW Remaining : 48,556 MW Solar Potential is 2.9 million MW, PV, CSP, Solar water heaters Wind potential is 346,000 MW with Gharo Corridor of 55,000 MW Small-Hydel potential 4,500 MW, Biomass, Biodiesel, Ethanol

FY: 2009-10 35
Electricity 0.4 mTOE
7.46 mTOE

Million TOE Gas

LPG

Oil
19.8 mTOE

30 25 20 Oil

Coal
4.62 mTOE

Total Supply 63.1 mTOE

15 10 Primary Electricity 5 Coal LPG 0

1995 2000 2005 2010

Natural Gas
30.8 mTOE

Source: HDIP, EYB 2010

0.042 % 19.2%
CNG 2.3 mTOE

E-10, E-10, 0.47 mTOE 5067, 0%

Agriculture, 2.2%, 0.85 mTOE

17.2 %

Petrol 2.06 mTOE

Diesel 7.64 mTOE

Transport 31.4% 11.65 mTOE

Industrial 39.7% 15.6 mTOE

63.5%

Total 38.8 mTOE

Commercial 3.4% 1.53 mTOE

Transformation Loss: 17.1 mTOE T&D Losses: 2.47 mTOE Non-Energy Use: 4.13 mTOE

Domestic 21.2% 8.36 mTOE

Source: HDIP, EYB 2010

Other Gov. 2.1% 0.786 mTOE

Losses End Use Final -Transmission Secondary -Processing -Conversion Primary -Mining -Drilling
Hyperlink

-Industry -Domestic -Commercial - Agriculture

-Distribution -Transportation -Storage

-Transform

-Harvesting

PRIMARY ENERGY SUPPLY

CONVERSION TECHNOLOGIES
(FINAL ENERGY)

END-USE TECHNOLOGIES

DEMAND FOR ENERGY SERVICE

(PRIMARY ENERGY)

(USEFUL ENERGY)

Mining, e.g. Crude oil Natural gas Coal Imports, e.g. Crude oil Oil products Exports, e.g. Oil products Coal Renewables, e.g. Biomass Hydro Solar Wind

Fuel Processing Plants, e.g. Oil refineries Hydrogen Ethanol Power Plants, e.g. Conventional IGCC Solar Wind Nuclear CCGT Fuel cells CHP

Industry, e.g. Steam boilers Machinery Commercial, e.g. Air conditioners Light bulbs Households, e.g. Space heaters Refrigerators Agriculture, e.g. Pumps Tractors Transport, e.g. Gasoline car Fuel cell bus

Industry, e.g. Process steam Motive power Commercial, e.g. Cooling Lighting Households, e.g. Space heat Refrigeration Agriculture, e.g. Water supply Transport, e.g. Person-km

RESOURCE SUPPLY-COST CURVES

TECHNOLOGY COST AND PERFORMANCE

DEVICE COST AND PERFORMANCE

DEMAND PROJECTIONS

Thousand Tonnes of Oil Equivalent

Imports 21,640

Indigenous Production 43,269

From Stocks 113

Indigenous Energy Availability 64,909 Total Primary Energy Supplies 63,088

Nuclear, Hydro and Imported 7,455

Natural Gas 30,809

Crude Oil, Petroleum Products and LPG 20,202

Coal 4,622

Exports 1,523 Bunkers 411

Use in Transformation 20,188

Final Energy Consumption 38,768

NonEnergy Use 4,132 Coal 4,282

Lubes, etc. 427

Natural Gas 3,422 Coal 283

Transformation Losses 17,114

Electricity 6,055

Natural Gas 17,025

Petroleum Products and LPG 11,406

Energy Sector Own Use 606 Transmission and Distribution Losses 2,468

Consumption by Economic Sectors

Commercial Agriculture 768 Domestic 8,360 Industry 15,605 Transport 11,655 85 0 Other Govt.

Source: HDIP, EYB 2010

CNG Sector consumes only 8% of Gas but generate 30% of gas revenues for Gas utility co. High tariff

Where is our huge Coal, Hydel, Renewable potential?

Power 29% 7.1 mTOE

CNG 8% 2.3 mTOE

80% Population do not have access to gas pipeline yet 20% consume 17% of gas Domestic 17% 5.13 mTOE

Other 4% 1.2 mTOE

Fertilizer 18% 4.28 mTOE Gas Shortage 1.5-2 BCF /day

Gen. Industries 25% 7.5 mTOE

Fertilizer Sector is over subsidized

Source: HDIP, EYB 2010

Total Gas Consumption 1.27 Trillion Cubic Feet

10.00

8.00

Bcfd

6.00

4.00

2.00

Existing Gas Fields

0.00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

17
Source: ISGS

Supply
Total: 20.2 Million Tonnes

Oil Import Bill was 9.99 billion US$ in Financial year 2009-10 Oil Consumption concentrated in the transport and power sector i.e. 92.4%

Consumption

Oil for power sector must be replaced with Hydro and Coal power otherwise our economy will collapse and industry become a dead wood..
Source: HDIP, EYB 2010

Comments on Sectorial Fuel Prices Natural Gas pricing is not based on economic principle of scarcity and optimal utilization which resulted in misuse and misallocation of this precious resource Cheap pricing of Natural Gas is an entry barrier to Coal, Renewables and Hydel Domestic Gas is no longer a surplus resource; reserves are in sharp decline. LNG will affect WACOG significantly

 Subsidy to medium & rich Class Vehicles mostly noncommercial Affect on refinery mix, surplus naphtha Power Loss in engine Limited Range

Against

For CNG

Green Fuel Indigenous

CNG Industry has no alternative for Gas

Extensive Infrastructure & supporting Industry Commercial vehicle Conversion due to Price Differential

Reduces import bill Higher tariff

 Lack of Demand Side Management Tariff structure is not rational. Subsidies esp. cross subsidy to domestic sector and not targeted for poor Circular Debt due to subsidy, non-payment & pilferage Seasonality of Hydel power Shortfall in gas supply Fuel Oil supply issues due to financial constraints Lack of diversification in generation mix Poor Governance and Regulation High power system losses

2008-09 1 2. 3. 4. 5 6 7. Average Power System % Losses Thermal Generation Efficiencies Thermal Power Availability Demand Side Management Overheads Lines/ Transformer SAIFI (System Average Interruption Frequency Index) SAIDI (System Average Interruption Duration Index) Power System Capacity of PEPCO as on May, 2011
Installed Capacity Dependable Capability

2015 Targets not available Limited plans

Situation unaddressed

23.3% (10.3%-36%) 16%-34% 50%-60% Nil In large numbers 0 57089 22.9 5706194

CFL Scheme only. 13 14

Average System Capability of PEPCO as on May, 2011

Summer
12632 MW
Source: NTDC, PECPCO

Winter
10233 MW

20964 MW

18882 MW

By Type
Hydel 29.4%

Power Generation Total: 95,608 GWh

Nuclear 3.3% & Imported
WAPDA 50.0%

By Company

Other IPPs 11.7%

Liberty 1.6%

HUBCO 9.2%

Gas 29.4%
Rousch 3.4%

Oil 37.8% Coal 0.1%

KESC 8.4%

Uch 4.3% KAPCO 8.4% PAEC 3.0%

FY: 2009-10
MW

GDP average growth in this period was 7% compare to historic average of 5%

20,922 19,257 19,384 19,450 19,420 19,420 19,786

25,000 20,000 15,000 10,000 5,000

0

Installed capacity average growth was 0.21% in these 5 years. 163 MW added
17,399 17,498 17,799 17,798 14,818 15,658 15,662 12,969

95-96

96-97
Hydel

97-98

98-99

99-00

00-01

01-02

02-03

03-04

04-05

05-06

06-07

07-08

08-09

09-10

Thermal (WAPDA)

Thermal (KESC)

Thermal (IPPs)

Nuclear

Source: HDIP, EYB 2010

100%

29%
80%

Gas

51%

30%

60%

Oil
15%

37%

40%

Coal
53%

20%

Nuclear Hydel

30%

0%

Source: HDIP, EYB Database

7000 CAPACITY (MW) 6000 COMMULATIVE CAPACITY (MW) 5000 4830

6917 6536

MW

4000 2902

3000

2000 943

1928 1610 1292

1706

1000 239 239 0

428

667

381

1950-60

1960-70

1970-80

1980-90

1990-2000

2000-2010

2010-2012

YEARS
Source: Wapda

Note: Below 1000 cubic meter per capita; Pakistan becomes water starved country!
Source: Wapda

Total: 74,348 GWhr

Agriculture 13% Bulk Supplies Others 1% 6%
Just look at this! 46% of
Non-economic subsidized consumption

Domestic 46% Industrial 27%

Commercial 7%
Source: HDIP, EYB 2010

Constrained Power Shortage 5000 MW

19,000 18,000 17,000 16,000

Computed (2010-11) Supplied (2010-11) Computed (2009-10) Supplied (2009-10)

Load in MW

15,000 14,000 13,000 12,000 11,000 10,000 9,000 8,000 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Months
Source: PEPCO

45 40 35 30
Price/kWh

Demand MW 5,000 12,000 14,000 15,000 >15,000

Price Rs/kWh 1.25 11.11 14 Up to 39 Infinite

10.21 11.11
Rental unit is up to 80 times more expensive than Hydel. They say we will have Rental Power Plants but not Kalabagh

39.37

29.51

25 20 15 10 5 0 0 0.51

19.42 16.36 13.2

1.25 2000 4000 6000 8000

3.12 10000 12000 14000 16000

Hydel unit (Tarbela) Price per Unit (Kwh) and they say we wont build Kalabagh Dam

Load (MW)
Source: PEPCO

Generation

Transmission
PESCO

Distribution

Rental IPPs GenCos Nuclear Hydel Imports

Rental Contract

Capacity Purchase Price Energy Purchase Price Capacity Purchase Price Energy Purchase Price Flat Rate

CPPA

LESCO IESCO
MEPCO

Flat Rate Water Charges Agreement Terms

Generation Cost (G.C) Letter of Intent Renewable determined by NEPRA

G.C + Wheeling Chargers of NTDC

G.C + W.C+ Distribution QESCO Margin

HESCO

GEPCO FESCO

GoP approves the NEPRA tariff

Tariff Effective (Rs./kWh)

Determined

Notified

Difference

24-02-2007 01-03-2008 05-09-2008 25-02-2009 01-10-2009 21-12-2009 01-01-2010 01-07-2010 01-10-2010 01-11-2010 15-03-2011 06-05-2011

5.13 5.58 8.35 8.35 8.35 10.09 10.09 10.35 9.57 9.57 9.57 9.57

4.25 4.78 5.58 5.63 5.88 5.96 6.65 7.05 7.19 7.29 7.44 7.58

0.88 0.80 2.77 2.72 2.47 4.13 3.44 3.30 2.38 2.28 2.13 1.99

Source

PSO

Genco

Meter

End Use
Circular Debt Rs. 350 billion Subsidy Rs. 250 billion

Process

Refine

NTDC

DISCO

Injections

GoP Spending\Exports\Investment

GDP

Firms
Rent Wages Profits
Land, Labor Capital Goods & Services Payment of Goods & Services

Households
National Income Taxation\Imports\Savings

Leakages

Hyperlink

Cost to the Industrial Sector Cost to the other sectors of industrial loss of Value Added Total cost of industrial load shedding to the economy Loss of exports Additional cost of Power self Generation Percentage loss of Production Loss of employment in the economy

Rs 157 billion Rs 53 billion Rs 219 billion Rs 75 billion Rs 32 billion 7% 400,000

Source: Trading Economics

Source: IPP estimates listed in Beacon House National University publication: State of the Economy Emerging from Crisis 2008

 Pakistans total GHG emissions were 310 million tones of CO2 equivalent comprising of CO2 54%, CH4 36%, N20 9% and others 1% in 2008 (Ref: National GHG Inventory) Responsible for 0.8 per cent of global GHG emissions Ranks 135th in the world in terms of per capita GHG emissions; Ranks 6th in population (Ref: GoP 2010) It ranked 16th out of 170 countries in a Climate Change Vulnerability Index (Ref: Maplecroft 2010) CO2 emissions per unit of energy consumption in Pakistan are among the lowest in the world Reason! Historically, our primary energy supply mix is about 50% Natural Gas with very low carbon footprint, 11% Hydel and 1.1% nuclear which are Carbon free

 Human Resource Development Governance of Energy Sector

Incompetence, nepotism and corruption Too many institutions involved in a activity area Lack of National Integrated Energy Plan Lack of financial and administrative autonomy

Regulators Role
Clarity of Role and Autonomy Lacks market development approach and monitoring Accountability Capacity Building Tariff Calculation and determination is formula based

 Reforms/Restructuring and Stalled Privatization

Energy Sector investment need cannot be met by the public sector alone Stalled privatization programs Vertical Integration Problematic; Unbundled, Now?

Irrational and Inefficient Tariff Structure

Untargeted Subsidies, Notified tariff are below recovery cost Failure of Government to pay subsidies on time No Protection to Economic Sector i.e. cross subsidy is given to domestic sector in both Gas and Electricity; Line losses, delivery Cost and pilferage/nonpayment are very high in domestic sector compared to Industrial

Pakistan's Energy Security

Global Perspective

6,000

5,000

Yet to Find

Reserves & Resources (bnboe)

4,000

3,000

Unconventional
Yet to Find

Unconventional
Proven
R/P Ratio

2,000

164 yrs.

Yet to Find
R/P Ratio

1,000

Proven
Oil

41 yrs.

Proven
Gas

R/P Ratio

67 yrs.

Coal

The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil. Sheikh Yamani, Saudi Oil Minister, 1962-1986
Source: World Energy Assessment 2001, HIS, WoodMackenzie, BP Stat Review 2005, BP estimates

3 Largets Energy M arkets (N.America + Europe + Asia Pacific) 22% 39%

ROW

12% 35%

90% 78% 61%

85% 88% 65%

10% Consumption OIL Reserves Consumption GAS

15% Reserves Consumption COAL Reserves

as the developed countries have 65% of proven coal reserves.

Source: BP Statistical Review 2006

Conventional Oil Reserves

Unconventional Oil Reserves

Reference: IEA 2005

Strategic Stakes

Economic Stakes

Control of Sovereignty National Inter Interest Dependent

Security of Supply

Oil & Gas Consumer

Industrialized Rich, Powerful

Corporate Control Military Power Petrodollar

LDC, Poor, Weak

World Bank

IMF Loan

This slide is reviewed by a leading senior Economist of Pakistan Civil Service

This slide is reviewed by a senior Defense Analyst

Muslims have 69% of Oil Reserve and 58% of Gas Reserve of the World; produces 40% of world agriculture production yet most of Muslim population live in state of poverty We hold key sea trade routes i.e. Straits of Hormuz, Straits of Malacca and Suez Canal Global economy rest on foundation of economical supply of plentiful Oil & Gas but Islamic beliefs strictly prohibits Non-Muslims to have presence in Arab world (esp. K.S.A) Hence, War on Terrorism is aftermath of unhappy marriage of Muslim Arab and West over Oil; So, Arab world (esp. K.S.A) will keep producing terrorists, Pakistan suffers from this! Osama used Tribal belt, USA used Tribal belt against Russia, History used these fighters since Alexander. Tribal people are born fighters with harsh & rugged lifestyle. Thus, solution is militarization of Tribal belt of Pakistan and Afghanistan and use it as instrument for Muslim World Energy Security. No wealth is yours if you cannot protect it

Energy Rich Land locked Central Asia

Sea Route for China

Oil & Gas of Middle East Pakistan

Energy Starved Growing Economy of India Gawardar port

Proven Gas Reserves of worlds top 30 Gas Producing Countries

100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0%

Natural Gas may continue to be our major supply source in energy mix due to the extensive pipeline infrastructure i.e. transmission & distribution grid

World Gas Reserves: 6621 TCF BP Stats 2010

Option for I-P, Q-P and Central Asian Gas pipelines We have access to about one third of Worlds Gas

Reference: CediGaz

Ru ss ia Ira Sa Q n u a Un d i A tar ite ra d bi Ab Sta a u- tes Dh N ab Ve i ge i ne ri a zu Al ela In ge d o ria ne sia Au Iraq st ra Tu l rk Ch i a m in en a is No tan r M wa al y ay s Ka E i a za gyp kh t st Ku a n Uz w be ai ki s t Ca ta n na da Az Lib Ne e rb ya th ai ja er n lan ds In Uk d ia r Pa ai n kis e t Bo an li v Om i a Ro a m n an ia

Proven conventional gas reserves are fairly concentrated

TURKMENISTAN
TAPI Turkmenistan Segment = 145 Km Yoloten-Osman Gas Field

TAPI Pipeline 1,680 Km 3.2 Bcfd, 56 $ 7.6 billion IRAN

Herat

AFGHANISTAN
TAPI Afghanistan Segment = 735 Km

IP Pipeline - 1935 Km Iran Segment 1150 Km Pakistan Segment 785 Km

PAKISTAN
TAPI Pakistan Segment = 800 Km
Lahore

Char Rah Kandahar

Multan Quetta IP Iran Segment, 56 = 900 Km completed Iran Shahr IP Pakistan Segment = 785 Km 750 MMcfd, 42/48 $ 1.245 billion Nawabshah Iran Shahr to Mile 250= 250 Km to be completed Gwadar Sulaimanke Fazilka

Asaluyeh

Pak-Iran Border Delivery Point Mile 250

Source: ISGS

%
100 90 80 70 60 50 40 30 20 10 0

1.2 10.9 9.2

8 3

1.5 6

15 2 22

51 47.5 6

67 24

2.5 31.2 32 23

37

Pakistan
Oil

India
Gas Coal

China
Hydel Others

USA

US $

Pakistans energy mix to provide affordable and sustainable energy supplies at unsubsidized price to its economy by using of indigenous coal and hydel resources like China and India

Years

Source: World Bank

 Adequacy! Can our energy Supplies to meet demand on sustainable Basis? Diversity! our energy mix is diverse or not at present? Can it be made to diversify? Affordability! Our energy prices are competitive compared to world or not? Viability! Sector Governance and Institutional viability of our present mix and future mix Reliability! Are there any risks of physical interruptions in energy supplies?

Way Forward to Energy Security

Our Way is the Coal Way

There are no speed limits on the Road of Excellence

 Demand Side Management Opportunities

Standardization of Equipment & Appliances Legal framework for Energy Efficiency ENERCON to play its role, Introduce ESCOs in private Off Grid MW saved is better than MW for solar NEGAWATT!Solutions using R.E, Private Sector produced Use of Solar Water Heaters Differential Tariff, Smart meters, Prepaid Billing Mass transport systems Trust building on Demand side Management Successful Awareness Campaigns on DSM Control Power system line losses and UFG

Sector Domestic Households Commercial Sector Industry Agriculture Transport Other Government Sub Total Demand Transformation Total Major opportunities: Power , UFG, Appliances, DSM

Realizable Saving as % of Consumption in FY 2008 25.8% 23.9 % 11.1 % 19.6 % 13.9 % 2.7 % 15.4 % 13.8 % 14.9 % Potential saving 3 Billion US $ per year

 Single integrated Energy policy for all energy sectors i.e. upstream, downstream, R.E, nuclear, Coal etc Formation of Ministry of Energy is required as there is lack/difference of collective and integrated plan/view of the Country, Region and the World Merge M/o Water & Power and M/o P&NR to work under M/o Energy; OGRA & NEPRA merger to follow up M/o Energy must have representative of Planning Commission, M/o Finance, M/o Petroleum & Natural Resources , M/o Water & Power, Federal & Provincial representatives, Regulators, Industry and the consumer so as to form a structured group of professionals drawn from all public and private sectors entities of the country

Power Sector
Public Private

US $ Billion
27.8 1.0

Source
W.G for 10th 5 year Plan Major investment in under implementation Hydro projects is proposed FODP ESTF Report 2010 Guestimates

28.8

Fuel Sector
- Oil & Gas Production and refining, LNG Import - Others Pipelines explorations & Coal sector, T&D 11.0 10.2

14.2

Total

50

Rs. 850 b/yr

 Gradually and systematically eliminate subsidies from domestic, refinery and fertilizer sectors Subsidies should be provided directly through support programs so as to avoid the benefit going to manufacturer, middle men and rent seekers Resolve Circular Debt Issue and prevent recurrence Attract Private Sector Investor Set up Energy Development Funds through Donors Develop Bond Markets , Banking Sector (exposure autonomy, innovative products) Unbundle and divest public energy sector asset Improve law and order, stop corruption

 Develop provincial consensus on promotion and development of hydropower generation Pre-feasibilities to be made in great number through donors and PSDP fund Develop run-of-river projects on massive scale through indigenous resources Strengthen engineering and design capacities of relevant institutions required for building large dams and related power equipment Develop financial capacities in lending institutions Power Policy to address evacuation for hydro power

Long Term 8-15 years

Dam
Bunji Basha Dam Dasu Kalabagh Kohala Neelam-J Munda

Capacity (MW)
7,000 4,500 4320 3,600 1100 969 740

Total

22,229

Name
Diamer Basha Golen Gol Neeium Jhelum Kurram Tangi Munda Kohala Keyal Khwar

Million US $

Project Cost in
8273 155.7 1629.5 668.7 900 2155 145.6

Capacity in MW
4500 106 969 83 740 1100 122

Installed

Project Time in years 12 5 9 4 6 6 7

Name
Phandar Dasu Bunji Akhori Lower Spatgah Palas Valley

Million US $

Project Cost in
70 7800 6838 3300 614 667

Capacity in MW
80 4320 7000 600 567 621 3600

Installed

Project Time in years 4 8 8 6 6 6

Political Dispute

Kalabagh No estimate

1 kWh =3412 BTU

No. of hours in the year i.e 365 days 24 hours

Units produced/year = 3,600

1 kiloWatt hours (kWh) is Billing Unit of Electricity

1,000

8760

0.5

Installed Capacity Conversion factor of (MW) of Kalabagh Mega to Kilo-Watt = 15,768,000,000 kWh

Assumption that Plant will operate 6 months per year

Unit Cost determined by NEPRA: Tarbela: Rs. 0.53 Ghazi: Rs 2.20 Mangla: Rs. 0.36 Ave. Hydel: Rs 1 IPP/Gencos: 9-17/kWh

Total Unit Produced/year Kalabagh Dam will save

(2 times US aid for war on terror)

2.5 billion US $/year

Thermal power producers:

compared to Thermal Power

Salient Features

Rental : 20/kWh (1$ 85.25 PKR)

Cheap Electricity: Rs- 1.50 per kWh Nearby Major Load Centers Water Storage worth tens of Billions Rs. Extended irrigation, Flood Control Restore capacity of Tarbela & Chasma Location is close to the National Grid

Concrete Gravity Dam (Build cost is less) Dam is connected to both Road/Rail Last Down Stream location for Dam before Indus enter in to Sindh plains Largest catchment area, Most diverse water source, Kabul, Haro,Swan, Indus

1. Flooding of Peshawar Valley including Nowshera Backwater effect of Lake would end about 10 miles downstream of Nowshera. 2. Area of Mardan, Pabbi and Swabi plains would be adversely affected creating water logging and salinity Lowest ground levels at Mardan, Pabbi and Swabi areas are 970, 960 and 1000 feet as compared to the maximum conservation level of 915 ft for Kalabagh operation pattern of reservoir cannot block the land drainage and cause water logging or salinity 3. Population Displacement Total population to be relocated is 120,320 of which 78,170 shall be from Punjab and 42,150 from NWFP.

4. No surplus water to fill Kalabagh reservoir Annual average wastage of water is 21 MAF to Sea. Kalabagh Reservoir will be filled up with 6MAF only, which will gradually be released to the provinces. 5. Anxiety the project would render Sindh into desert Dams dont consume water but only store water during flood season and make it available on demand basis. Infact, Sindh will get extra 2.25 MAF for irrigation... 6. Sea Water intrusion estuary would accentuate Data shows that sea water intrusion seems to be at its maximum even now, and it is unlikely to be aggravated further. Annual average release of even 8.6 MAF below Kotri will be possible to stop the Sea water intrusion

 Hydroelectric Generation at least 26,000 MW by 2025. Implement the Wapda Plan, include Kalabagh Renewable Energy resource i.e. Solar & Wind potential for power generation may be very tempting but public sector funding to it should be avoided till technology matures in the world and price goes down. Moreover, these sources are intermittent hence need backup batteries. The battery technology is still very primitive in the world Leave Wind & Solar for private sector only! Hydro power technology is reliable & established, used for decades i.e. divert limited public funding from solar & wind to Major Hydel Power Projects

 Stepped up E&P activities for Oil & Gas by improving drilling intensity from present i.e. one well /1376 sq. km Have a formula of making the local population as shareholders in Oil & Gas production areas Law & Order situation and terrorism should be addressed appropriately Proper well head gas pricing to attract investor Enhanced Oil Recovery, In Fill Drilling, Tight Gas R&D projects to promote and accelerate the exploration activity in unexplored area of the country in order to fill in future energy gaps

ONSHORE Zone I: (High Risk High Cost) Zone II: (Medium Risk High to Medium Cost) Zone III: (Low Risk Low Cost)
Punjab ZONE-II ZONE-II ZONE-I ZONE-III Balochistan Sindh N.W.F.P
J&K Disputed Territory

Oil & Gas Exploration & Production Policy 2009

Non-performing Exploratory Licenses due to security reasons OFFSHORE Zone 0: Indus & Makran
Shallow

ZONE-O

Hyperlink

Super Deep

Deep

 Prioritize use of gas in the following order:

1) Industry 2) CNG* 3) Power generation 4) Commercial 5) Domestic (using economic principle)

Eliminate Cross Subsidy in Gas Sale Price i.e. Domestic and Fertilizer sector Expand Oil importing facilities
Up-gradation of Port Qasim Development of Gwadar Port

Build strategic relationship with crude suppliers and diversify supply source Minimize use of Fuel oil for power generation and industrial usage as its supplies are expected to be restricted and with volatile pricing

 Import of energy
Gas Import
Pipeline
IPI Central Route IPI Coastal Route Qatar Deep Sea Route TAPI

LNG

Oil Import Electricity Import

Tajkistan Iran

Import of Coal Import of LPG

Year

Future Nuclear Cumulative Power Plants to (MW) be added to Grid K-1 and C-1 340 MW (C-2) 340 MW 340 MW 1000 MW 1000 MW 1000 MW 415 755 1095 1435 2345* 3345 4345

2011 2011 2016 2017 2019 2021 2022

The Pak-China link needs to be kept engaged and strengthened Chinese supply capability limited to 300 MW size but larger 1000 MW size possible after 2-3 years NPPs require about 7 years in construction. (Energy Project Cycle) Enhance exploration and infrastructure for mining

Source: Integrated Energy Plan, M/o Finance, GoP

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 Development of energy sector esp. Coal & Hydel requires tens of billions of Dollars investmentt. It is paramount to create the enabling environment for investor through: Develop the Human Resource Requirement is paramount for every sector of energy
Qualified, competent and trained Human Resource Consistencies and Quality of Policies i.e. Energy, Trade, Economic, Foreign, Security & Environment Transparency, Impartiality, fairness, reasonableness, Merit appointments, Systematic & effective implementation, faster decisions, policy shifts, regulatory changes, capacity building

Revamp the selection and screening process, the salary structure, recognition and reward system, behavioral issues of energy sector organizations

Umar bin Khattab (R.A, Al-Farooq) once gathered people and asked them to make a wish. They wished that this room may be filled with gold & silver and they spent it in path of ALLAH. He asked them again to make a wish they said may this room is filled with jewels and diamonds and they spent it in path of ALLAH. He didnt like and asked them again. They gave up and asked O Umar tell us what do we wish, fill this room with what? He said I wish that ALLAH fill this room with men like Abu-Ubaidah ibn al Jarrah and I send them all in path of ALLAH. The people thanked Umar R.A for this wonderful advise
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 The primary use of coal is power generation worldwide Today the world gets more than 38 % of its electricity from coal, China generate 80 %, India generate 66%, USA generate 60% and Pakistan generate 0.1% electricity using coal which is cheap and economical In the Asian region 45 % of power is generated from coal, which is expected to increase to 60 % by 2020 Advanced technologies for coal gasification, clean coal technologies, fuel cells and syngas conversion etc are available but very expensive at present Pakistan should focus on conventional open cast integrated mining i.e. power plant near the mine mouth

 Area of the field: Distance from Karachi: Coal seam thickness: Coal seam depth: Potential Reserves:

9000 sq. km 380 Km 0.2 -22.8m 114-203m 175 Billion Tonnes

Coal category is Lignite having calorific value between 6,200-11,000 BTU/lb, it has high moisture i.e. 47%, ash5.75%, low sulphur-1.2% and volatile matter-33% There are three aquifers at an average depth of 50m, 120m (above seam) and more than 200m (below seam) which needs hydrological solution. Dune sands, silt stone cover, very high stripping ratio and high moisture content in Thar Coal make Thar mining and power generation challenging

 The climate of Thar is arid and rating to cool winters and dry and warm summers Rainfall is the only source of fresh surface and ground water. The rainfall is limited and occurs during the monsoon season from June-Sept. with a high intensity and low frequency The desert itself let flourish natural vegetation of all kinds after rain All the tropical crops are grown round the year Wild life of Thar desert viz; deer antelopes, black buck, wild ass, and peacock are world wide famous

1 2

Block I Engro Sindh Coal Mining Company (40% Sindh Government; 60% Engro) 1200 MW Cougar Energy (Australia) Under Ground Coal Gasification Project 400 MW Bin Daen Group (UAE)) 1000MW Under Ground Coal Gasification Project Dr Samar Mubarakmand 100MW Oracle, PLC (UK) 600MW Block III B, VII & VIII

Available for Investment

Feasibility study due in June 2010; Strip mining and power generation potential 4000MW, 24 million tons/year for 30 years. PEPCO has also Signed MOU for 1200MW Power Plant Drilling License awarded to an Australian firm Pilot Burn planned in 36 months; Technology planned is Ergo Exergy ; 400MW planned; Integrated Coal to power project, 1000MW planned; currently exploring possible partnerships to carry out feasibility studies. 100 MW planned by the end of 2012. Currently unit gasifier being constructed, technical team has been mobilized and desktop studies for gas handling completed. Strip mining; 600MW planned. ESIA completed; anticipate mine commencement Dec. 2011. Available for Investment

3 A 4

 Thar Coal potential can provide Hundred Thousand (100,000) MW of electricity for more than two (2) centuries Equivalent to about 617 Billion Barrels of Oil, Worth 30 trillion US $ @ 50$/Barrel More than 2 Saudi Oil reserves Pricing mechanism must provide minimum 16% return on investment for Thar Coal Fired Power Plant Open Cast mining at the depth of 145 meter with 3 aquifers will be challenging, So Thar is Medium to Long term option Provide necessary infrastructure and development in Thar area i.e. water, road & security Develop policy for Integrated Coal Mining/Power Put professionals of coal field at the helm

24

Pakistan Energy Resource Potential

Legend Blocks Drill Holes Villages Track

Minham Bamnia Bhil Jo Tar Meghe Jo Tar
24

BLOCK III Saleh Jo Tar

Kharo Bhitro

Bamnia Bhil Jo Tar

Sonalba Jagirharho

Singharo

Vakrio BLOCK II

BLOCK IV

Thae Jo Tar

Jinde Jo Tar

Islamkot
24

Varvai Mula Jo Tar BLOCK I Sinhar Vikian Tilvai

A

Khario

Oil

Gas

Coal Measured Coal Indicated Coal Inferred

24 70 10

Dhinkario

Mattu Jo Tar

Kikari

70 20

70 30

 Energy Sector is in a critical state Energy Efficiency & Demand Side Management to get the highest priority Prepare to live with planned load shedding Pay for what you Consume policy must be adopted i.e. remove subsidies Actual availability of resources for Investment may be much less than planned mainly due to lack of financing & investment, war on terrorism and resulting law & order situation due to the aforementioned war Militarize the Tribal belt of Pakistan & Afghanistan and use it as instrument for Muslim Worlds Energy Security. United Muslim Army under control of OIC like NATO. It will end the terrorism! It is imperative to realize Wapda plan of Hydroelectric Generation of 26,000 MW by 2025 also include Kalabagh Dam. Resolve all disputes! Develop Thar Coal, energy secured for centuries Integrated Energy Planning is the need of the hour Improve Governance, No Corruption, HRD is the Key

We must understand that the existence and secure future of Pakistan do not depend on nuclear deterrence and properly guided missiles but on planning and management of our resources by properly guided men.
(Men who make the difference article by Asim Riaz)

Prepared by: Mr. Asim Riaz, B.Sc Double Math-Physics, B.Sc Mechanical Engineering, Master in Energy Management Participated in developing and validation of Pakistan Integrated Energy Model (Pak-IEM) Member Editorial Board of Pakistan Journal for Hydrocarbon Research (PJHR) Contact: +92-345-5100667; asim78@gmail.com

I seek refuge of ALLAH from the outcast satan

And you shall see the angels surrounding the Throne (of ALLAH) on all sides, glorifying the praise of their Lord; and judgment shall be given between them with justice, and it shall be said in the end: Praise be to ALLAH, the Lord of the Worlds!
Quran, Az-Zumar, 75

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