Pakistan faces heightened risks to its energy supply following disruptions to Liquefied Natural Gas (LNG) shipments caused by the closure of the Strait of Hormuz, prompting renewed consideration of coal, hydropower, nuclear power and renewable energy as alternatives.
A report released at Gastech’s 54th annual event found that Qatar and the United Arab Emirates (UAE) account for about 99 percent of Pakistan’s LNG imports, which are used mainly for power generation, fertiliser production and industrial activity.
LNG makes up about 30 percent of the country’s overall gas supply, according to the report, titled The Outlook for Gas and LNG Markets in Asia.
The disruption has highlighted the need for Asian countries, including Pakistan, to strengthen energy security and make domestic power systems more resilient to external shocks, the report noted.
It recommended accelerating investment in utility-scale solar, wind farms, commercial rooftop solar and energy storage.
It also identified gas storage, adjustments to power-generation mixes and greater flexibility in gas-fired plants as possible measures to improve resilience.
The report noted that countries were considering larger operating reserves to help grids respond to unexpected disruptions.
Strategic fuel stocks could also be expanded for transport and electricity generation, while greater cross-border electricity trade could help countries manage temporary shortages.
The conflict involving Israel, the United States and Iran, which began in February, and the resulting bottleneck in the Strait of Hormuz, have highlighted the geopolitical sensitivity of global gas and LNG markets, the report noted.
Shipping uncertainty and volatile prices could also significantly increase electricity-generation costs in Pakistan.
Amid the supply concerns, Universal Gas Distribution Company (UGDC) held discussions with international companies on potential gas-storage projects, long-term LNG supplies and gas-distribution opportunities in overseas markets, its chief executive officer, Ghiyas Abdullah Paracha, told journalists.
“We have got understanding with some companies that have shown interest in building gas storage facilities in Pakistan. Some companies have shown keen interest in long-term LNG contracts with UGDC,” he said.
Paracha added that UGDC’s participation at Gastech was aimed at presenting Pakistan’s gas-sector reforms and the opening of its gas market to private-sector participation.
