..: INTRODUCTION :..

The location of Pakistan at the crossroads of Central Asia and the Arabian Sea has brought into spotlight its significance as an attractive market and a regional transit route for energy. Oil and Gas are the two major components of the energy mix which contribute 79% to the 63 million TOE of energy requirement in the country. The Government is formulating investor-friendly policies to increase the share of indigenous resources in the country. As a result of these policies, the Oil & Gas sector has attracted foreign direct investment of over US$ 700 million in 2008-09.

Pakistan is one of the largest consumers of gas in the region. It has a well developed and integrated infrastructure of transportation, distribution and utilisation of natural gas with 10,285 km of transmission and 93,961 km of distribution network. The two gas distribution companies plan to invest about US$ 400 million to increase the capacity of existing distribution network.

Up till now 725 wells have been drilled by various local and international exploration and production companies with 219 Oil & Gas discoveries, bringing the gas reserves to 30 TCF. An investment of US$ 1 billion was spent in drilling activities with 60 new wells drilled in 2008-09. At the same time, the crude oil recoverable reserves are estimated at 313 million barrels. The current production of oil is 66,532 barrels per day, whereas gas production is at 4 billion cubic feet per day.

Currently seven refineries are operating in the country with a refining capacity of 13 million tonnes per year.

Pakistan is now the largest CNG user in the world. Currently, 2700 CNG stations are operating with an investment of over US$ 1 billion, serving 2 million vehicles in the country.

LPG

LPG is environment-friendly and an economical fossil fuel available in the country. It is mainly used by the people living in remote areas, having no access to natural gas. Annual LPG consumption is 600,000 tonnes out of which 20% is met through imports. Total investment of US$ 200 million has already been made to develop the LPG supply infrastructure.

COAL

Pakistan has the 7th largest coal reserves in the world, estimated at over 185 billion tonnes of Coal. The country is producing 2.4 million tonnes of coal to meet the current coal consumption of 6.4 million tonnes while 4 million tonnes is imported to fulfill the energy requirement of the country. The Government has allocated an annual budget of US$ 25 million for the development of Thar Coal Infrastructure. Thar Coal project has the potential to cater to the increasing national energy requirement for decades with a relatively low unit cost.