Energy Security Plan 15 02 05 Final

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Information about Energy Security Plan 15 02 05 Final

Published on October 9, 2007

Author: Jade


Slide2:  Presentation to BY 15TH FEBRUARY, 2005 Slide3:  Sequence of Presentation SITUATION ANALYSIS WORLD / REGIONAL ENERGY REVIEW PAKISTAN ENERGY RESOURCES AND POTENTIAL ENERGY SECURITY PLAN OBJECTIVES ENERGY SUPPLY AND DEMAND PROJECTIONS SECTORAL ISSUES RECOMMENDATIONS CONCLUSION Energy Security Plan:  Energy Security Plan Task force constituted by the Cabinet (2001) Comprising Deputy Chairman Planning Commission. Secretary Industries & Production. Secretary Petroleum & Natural Resources. Secretary Water & Power. Secretary Scientific & Technological Research. Task Force Mandate To prepare an Energy Security Plan to include: Energy requirement upto 2010. Energy security enhancement measures. Energy mix, efficiency & conservations. Renewable energy promotion measures. Viability of an additional refinery. Proceedings of The Task Force:  Proceedings of The Task Force The task force has recently been activated and a number of meetings were held; all stake holders participated. The contributions made by Public and Private sector professionals are acknowledged especially PIP/OCAC, SSGC, PPAIF, ADB, study by Hagler Bailly, PAEC, WAPDA, DG(Mineral), DG(Gas), DG(PC), HDIP, AEDB, PSF, SCA and Energy Wing, Planning Commission. Situation Analysis:  Situation Analysis Pakistan lacks integrated national energy security plan for the 21st century. Low per capita energy consumption with only 14 million British Thermal Unit (mbtu) as compared to 92 mbtu for Malaysia. Per capita energy consumption is a key development indicators of “quality of life” of the population. To date, demand suppression strategy has been used which has perpetuated unavailability of energy. Unavailability of sustained and affordable energy to industry has suppressed economic growth and created declining tendency for industrial investment in Pakistan. World and Regional Energy Comparison :  World and Regional Energy Comparison (Year 2004, 1995 USD) Source: 1. British Petroleum – Statistical Review of the World Energy 2. World Fact Book 2004 Slide8:  Energy Utilization Per Unit of $GDP, 2003-04 Note: The above graph provides a comparison of energy units utilised to produce 1US$ of GDP. Slide9:  Country Primary Energy Mix, 2003-04 * Data: 2002 WORLD OIL RESERVES AT END 2003:  WORLD OIL RESERVES AT END 2003 Total World Proven Reserves: 1148.0 B. Barrels Pakistan: 0.3 B. Barrels *Ultimate Oil Recovery Estimate: 1800 to 3800 B. Barrels * (Source: Society of Petroleum Engineers.) Pakistan’s Ultimate Reserves: 27 B. Barrels. Source: British Petroleum, Review of World Energy, June 2003. WORLD OIL PRODUCERS:  WORLD OIL PRODUCERS Annual Crude Oil Production ( 2003) - (Million Barrels) Total World Oil Production: 27357.8 M. Barrels Pakistan : 22.6 M. Barrels Source: British Petroleum, Review of World Energy, June 2004. WORLD GAS RESERVES AT END 2003:  WORLD GAS RESERVES AT END 2003 Natural Gas Proven Reserves (Trillion Cubic Meters) Total World Proven Reserves: 175.78 TCM Pakistan: 0.80 TCM/ 8 TCM ( Ultimate) Source: British Petroleum, Review of World Energy, June 2004. WORLD GAS PRODUCERS:  WORLD GAS PRODUCERS Natural Gas Production ( 2003) - (Billion Cubic Meters) Total World Gas Production: 2618.50 B. Cubic Meters Pakistan: 34.12 B. Cubic Meters Source: British Petroleum, Review of World Energy, June 2004. PROVED COAL RESERVES AT END 2003:  PROVED COAL RESERVES AT END 2003 Total World Coal Reserves: 984.6 Billion Tonnes Pakistan: 185/3.3 Billion Tonnes Source: British Petroleum, Review of World Energy, June 2004. Fossil fuel reserves-to-production (R/P) ratios at end 2003:  Fossil fuel reserves-to-production (R/P) ratios at end 2003 Source: BP Statistical Review of World Energy 2004 Total Electric Power Industry Summary Statistics, 2004 (Jul-Sept):  Total Electric Power Industry Summary Statistics, 2004 (Jul-Sept) Net Generation (Million kWh) Total Energy Sources – 3,053,969 Regional primary energy consumption pattern 2003:  Regional primary energy consumption pattern 2003 Source: BP Statistical Review of World Energy 2004 Pakistan World primary energy consumption:  World primary energy consumption 37.33% 23.94% 6.04% 6715.2 9741.1 The Gap Between Supply and Demand:  The Gap Between Supply and Demand Source: SPE International (Society of Petroleum Engineers) Slide20:  Oil production becoming more important than exploration Inevitable shift to gas—both exploration and production Short to Medium Term Strategy Slide21:  World Energy Supplies (Long Term Strategies) Source: SPE International (Society of Petroleum Engineers) Slide22:  Price of oil is most likely to continue going up in the longer run even though there may be short periods of decline. Crude Oil Prices Source: Illinois Oil & Gas Association Slide23:  Natural Gas Prices in US $ Per MCF Slide24:  Price of Electric Power Sold By Country USD Source: KEEI-Energy Statistical Database *WAPDA Power System Statistics (28th Issue). Slide25:  Nuclear Generation Facilities - 2003 Source: JAIF, Nuclear Power Plants Slide26:  Share Of Nuclear Electricity Generation (2003) % Source: International Atomic Energy Agency. Slide27:  Nuclear energy consumption by area Source: BP Statistical Review of World Energy 2004 Average Annual Flow & Storage Capacity of Dams of Some Major River Basins:  Average Annual Flow & Storage Capacity of Dams of Some Major River Basins Dams(Height 15m+) built during 1950-2000 : 40,000 i.e 2 large dams per day. Source: Internet Information Data The Nile:  The Nile Mean annual flow discharge at Aswan, before and after construction of the Aswan Dam Aswan Source: United Nations University Press Slide31:  Skardu: MSL 8,000 Feet Source: WAPDA - Measurement at Kotri Barrage. Slide32:  Pakistan Primary Energy Mix (%age) Source:Pakistan Energy Year book 1996 1990: Hydro share 15% of total energy 37% of power 1995 (36.34 MTOE) 2004 (50.8 MTOE) Coal, Hydel, Nuclear, Oil, Renewable, Natural Gas, Natural Gas Oil Renewable Coal Hydel Nuclear Ultimate Energy Resource Potential Estimates (As of June 2004):  Ultimate Energy Resource Potential Estimates (As of June 2004) *Estimates based on scientific methods. (Ahmed. R. 1998, Hydrocarbon Resource Base of Pakistan, Pakistan Journal of Hydrocarbon Research Vol.10, p1-10) Hydrocarbon Power (Hydel) Pakistan’s Hydropower Potential:  Pakistan’s Hydropower Potential Energy Balance Sheet (Position as on June 2004):  Energy Balance Sheet (Position as on June 2004) * Difference transmission and distribution losses. World Fuel Ethanol Production:  World Fuel Ethanol Production Pakistan Ethanol Production 2004-05 Actual Projected Source: F.O. Licht 2001 vs. 2006 Energy Security Plan Objectives :  Energy Security Plan Objectives Ensure availability of sufficient energy on sustainable basis and at affordable prices to achieve planned GDP growth targets (2005/10 – average 7.4%; 2011-2030 – average 8%). Maximum utilization of indigenous resources (coal, gas, hydel nuclear, oil, alternate fuel like ethanol and renewable) to meet the growing demand on a sustained and affordable basis thereby providing energy security, sovereignty and sustainability. Promotion of R&D for improvement in energy efficiency and conservation and development of energy efficient appliances. Improve quality of consumer services and creating competitive environment to solicit maximum private sector participation. To improve the strategic oil reserves from 20 days to 45 days. Integrated coal mining & power generation and coal gasification to increase the indigenous coal share in the energy mix i.e. upto 20% in 25 years plan and lay the foundation for future share to go up to 50%. Energy Security Plan Objectives contd… :  Reduce dependence on imported oil through accelerated exploitation of indigenous resources. Resort to import of natural gas and LNG through multiple sources on best possible terms if indigenous resources fall short to maintain GDP growth. Improvement of Value Addition to energy consumption ratio through better efficiency – at least 10% improvements. Maximize indigenization of design and manufacturing of PME to minimize capital cost and O&M expenses. Facilitate establishment of refineries and petrochemical industry based on coal, gas and oil. Promotion of nuclear and renewable/alternate energy sources (wind, solar) to have 10% share in energy mix in 25 years. Promote human resource development to ensure availability of required manpower to achieve Plan objectives. Energy Security Plan Objectives contd… Slide39:  IMPACT OF DIFFERENT GROWTH RATES 4% 5% 6% 7% 8% 9% 10% 100 Energy Mix Plan Projections:  Energy Mix Plan Projections Energy Mix Plan Projections:  Energy Mix Plan Projections Percentage MTOE Energy Mix in Power Generation (%age):  Energy Mix in Power Generation (%age) 2010 2015 1995 2004 1% 1% Energy Mix in Power Generation:  2020 2025 2030 Energy Mix in Power Generation Power Generation Plan:  Power Generation Plan M.W Note: KANNUP to be retired in 2019 Slide45:  No of Licenses Granted Private 37 OGDCL 16 Total 53 No of E&P Companies Local 05 Foreign 14 Total 19 Overall success rate 1: 3.6 Slide46:  Petroleum Policy Zone Map ZONE-I ZONE-II ZONE-III ZONE-O * Basket of imported crude. Pace of Exploration (Oil & Gas) Activities:  Pace of Exploration (Oil & Gas) Activities Source: American Petroleum Institute. Drilling Targets:  Drilling Targets Pakistan (1999-2004): OGDC: 13 Rigs. Well Drilled: 59. Drilled per Rig: 4.53. Per Year 0.91 Private: 12 Rigs. Well Drilled: 199. Drilled per Rig: 16.58. Per Year 3.32 Note: Canada: 22,000 wells(2004); USA: 10,151 wells(4th Quarter 2004). Canada (Western): 265 Rigs added during 1994 to 2004.Total Rigs 700(W.Canada) Projected Coal Power Projects (MW):  Projected Coal Power Projects (MW) Comparison :  Comparison Slide51:  GEOPHYSICAL LOG SUITE OF NATURAL GAMMA AND LONG SPACE DENSITY SHOWING COAL INTERCEPTS IN BORE HOLE SB-13. (sb:3.xdp) GSP THAR COAL PROJECT SINGHARO-BHITRO BLOCK-II 1995-96 Slide52:  Coal Gasification Thar Coal Gasification A feasibility study at a cost of Rs. 126 Million to ascertain Techno-economic viability of Thar coal for gasification and extraction of chemical is expected to be completed by December,2005. In case of successful completion of the study , 100 MMCFD of synthetic gas will be produced by utilizing 3.6 Million Tones per year. Coal Gasification at Bhakkar A feasibility study at a cost of Rs.12.3 million for coal gasification plant at Bhakkar is expected to be completed by June 2005. On successful completion of the study around 3 mmcfd of gas with the consumption of 0.1 million ton per year will be produced for domestic and commercial use in Bhakkar town (Population 100,000). Projected Hydel Power Projects (MW):  Projected Hydel Power Projects (MW) New Hydro Power Projects (Capacity in MW):  New Hydro Power Projects (Capacity in MW) Slide55:  Projected Renewable Power Projects Additional availability through Solar products development to minimize energy imports Slide56:  Projected Nuclear Power MW Slide57:  *If 600 MW unit can not be provided by China, it will be substituted by a twin of 300 MW units. Notes: Each year representation the start of the financial year I. Text in the boxes indicates the number of nuclear unit, its net capacity and construction period. The investment costs used to estimate generation costs are in 2004 prices, I.e. inflation effect has not been included. The average generation cost of this plan is estimated to be Rs. 2.76/kWh. Long-term Nuclear Power Plan C ( 10 additional units of 8,500 MW by 2030) Financing Arrangements for Nuclear Power Plan (Optimized for Least Burden on PSDP; 10 units of 8,500 MW by 2030):  Financing Arrangements for Nuclear Power Plan (Optimized for Least Burden on PSDP; 10 units of 8,500 MW by 2030) Note: The debt service of Govt. Loans through PSDP will be ploughed back in subsequent units. Uranium As Strategic Energy Resource:  Uranium As Strategic Energy Resource One Ton of Uranium metal in electricity production is equivalent to: 10,000 TOE 15,000 Tons of Standard Coal 21,000 Tons of Thar Coal In the last 40 years only 25% of the favorable area for uranium in Pakistan has been explored having estimated reserves of more than 11,200 tons. Cost of mining Uranium in Pakistan is comparable to international costs. ECNEC has approved a project worth Rs. 723 M for exploration of Uranium during the next five years. Using indigenous fuel (236 tons of Uranium) since 1980, KANUPP has generated electricity equivalent to 2.2 Million TOE. There is in built energy security in a Nuclear Power Plant. Fresh core of a 300 MW Nuclear Power Plant (CHASNUPP-1) contains Uranium fuel (3.5% enriched) adequate for 3 years of electricity generation. Slide60:  REO Karachi, 1993 REO Quetta, 2003 Mineral Centre Lahore 1971 QUBUL KHEL 1995 REO Peshawar, 1981 Uranium Mining Sites Uranium Favorable Area Regional Exploration Offices Occurrence of Uranium in Pakistan Slide61:  Unit working as Turbine Peak Hours Main Reservoir Downstream Reservoir Flow Direction Dam Off-Peak Hours Main Reservoir Downstream Reservoir Dam Unit working as Pump* * Using electricity from nuclear or other sources Flow Direction Worldwide Installed Pumped Storage Hydro Capacity in 2000: >70,000 MW Slide62:  Effect of Indigenization on Prices of Complete Thermal Power Plants 360 MW Maximum cost savings would have been achieved at 60% indigenization, had it been pursued with the help of foreign technology partners already lined up from USA (GE), Western Europe (GEC Alsthom + Deutche Babcock) and China (CMEC). Max. generation cost less than 4 cents/unit Slide63:  (26-34%) (16-20%) (30-36%) I=7%,II=12%,III=16% I=25%,II=35%,III=45% I=30%,II=50%,III=70% I=30%,II=40%,III=55% Overall Phasing I=25%,II=37%,III=55% (13-18%) Slide64:  Energy Demand Projections by Fuel MTOE Slide65:  INDIGENOUS SUPPLY PROJECTIONS MTOE Nuclear Hydel Renewable Coal Gas (Committed) Gas (Anticipated) Slide66:  ENERGY SUPPLY DEMAND GAP MTOE Note: Greater explorations as proposed should result in increased indigenous supplies and narrow the demand-supply gap. The dependence on imported energy would accordingly go down and timely adjustment for import of fuel taken to reduce outflow of foreign exchange. Gap Imported Oil Indigenous Supply Demand Slide67:  ENERGY GAP COVERAGE STRATEGY MTOE ( Including Nuclear, Hydel, Renewable, Coal, Oil & Gas) Indigenous Supplies Slide68:  Low pace of exploration and drilling activities in oil and gas sector. Law and order situation hampering exploration activities specially in Balochistan and NWFP. Delayed decision on major dams. Non utilization of hydro potential on canals. Coal development is neglected for over 50 years despite major finds at Thar, Lakra and Sonda Jherak due to lack of capability and proper institutional set up. Limited development of nuclear technology for power generation. Non-Development of renewable energy specially wind and solar. Indigenous gas will be short supply by 2010 if domestic potential not fully exploited. Issues Issues (contd.):  Issues (contd.) Absence of indigenous design, engineering, technology and manufacturing inputs. Slow development of deeper reservoir at Sui (1 TCF of gas) and slow pace of work at Tal Block near Kohat (3.5 to ----- TCF). Conservation not yet exploited as resource. Considerable energy losses/ wastages due to poor/old equipment design/make. e.g electric steel making in Pakistan consume 700-800 kwh per ton vs 250-300 kwh in advanced countries. An estimated amount of at least 20% of total energy consumption is wasted. (Amount USD one billion). Refining capacity is short of demand for HSD and some other petroleum products. 16 gas fields having estimated reserve of 2TCF lying dormant(majority in Sindh). Under capacity dispersal of Ghazi Brotha Hydro Power Plant due to lack of transmission infrastructure. Vary low capacity utilization of installed IPP’s (Hubco: 22.4%), (AES-Pak Gen:34%, AES-Lalpir: 12%) resulting in higher overall energy cost. Slide70:  Maximum utilization of indigenous natural resources : Oil & Gas: Maximize exploration. Number of exploratory and development wells to be drilled be increased to at least 150 / 200 wells per year in the first instance. More concession area be awarded to companies with good track record. New oil and gas discoveries to be developed on fast track. Improve law and order situation (Balochistan and NWFP). Increase the pace of oil and gas exploration in off shore areas (Balochistan and Sindh). Increase number of drilling rigs significantly from 25 rigs to at least 50 and ensure optimal utilization. Recommendations Slide71:  Maximum utilization of indigenous natural resources (Contd): Revise petroleum policy for on-shore and off-shore exploration to make it more attractive. Fair compensation to local population to encourage them to facilitate exploration and discoveries. Expedite development of deeper reserves of Sui (1 TCF). Expedite development of Tal (Kohat) which has potential to meet the entire demand of north of Pakistan. Encourage Pakistani companies including OGDCL for exploration in other countries. Encourage Pakistan gas utilities to participate in overseas projects for gas transmissions and distribution network. Recommendations Recommendations (contd.):  Recommendations (contd.) Hydel Power (to increase from 6460 MW to 32660 MW). Decision on large dams One large dam to be developed/constructed every ten –twelve years Slide73:  Bhasha Noshera Jashil Gah Gilgit Kala Bagh Attock Skardu Dasu Slide74:  Investigations on Skardu/Katzara to be initiated for its construction to start 2025. WAPDA to undertake a study for maximizing Hydel power generation from all rivers particularly mighty Indus (theoretical head available 8000 ft +) with water flow of 60 to 100 MAF in order to identify strategy and projects for increasing the Hydel power share. A combined study with PAEC would be desirable to also maximize Hydel Power at peak hours using pumped storage. Decision to fast track small and medium dams like Thakot (about 500 mw) by encouraging joint ventures of WAPDA, NWFP Govt. and private parties. Decision on mode of financing for execution of Neelum-Jhelum power project needs to be taken immediately. All Oil and Gas power plants be installed through private sector on BOT. The double digit growth of Large Scale Manufacturing has resulted in higher demand of electricity in some Industrial belts of Pakistan. WAPDA, KESC and PPIB must respond to this challenge and Fast Track the Private Sector Oil/Gas Power Projects to meet this additional demand. Encourage Public-Private partnership or BOT for Power generation on canals and other mini/micro hydel be taken up by Provinces with indigenous manufacturing of plant & equipment (Total about 700 mw on about 800 Sites). Recommendations (Contd.) Slide75:  Coal (Share to be increased to at least 19% (about 20,000 MW) by 2030 and 50% by 2050) Establishment of national integrated coal mining and power generation authority like WAPDA (Could be a J.V. of GOP,GOS and Local/foreign private sector). Coal gasification be expedited. Good quality coal import to be encouraged only for short term for mixing with local coal to increase coal consumption. Simultaneously establishment of washeries by private sector to be encouraged for improving quality of local coal. Nuclear (Capacity to increase from 400 MW to 8800 MW.) Greater emphasis on nuclear power resources; PAEC to enhance indigenization capability to maximize local content to reduce capital cost. Capacity of units to be increased from 300 MW to 600 MW and then to 1000 MW, which size should be standardized for future. President and Prime Minister may like to use their good offices to encourage participation of other countries like Germany, France and USA in the installation of power plants. Recommendations (Contd.) Slide76:  Alternate energy (Wind & Solar) TREC Development of wind and solar energy be encouraged and at least 5% of total national power generation capacity be met through these resources by 2030 (i.e. 9700 MW). Development of solar products like solar lights, solar fans, solar cooker, solar geyser, etc be encouraged through private sector. Energy Conservation Necessary laws be enacted for: Energy efficient building designs. Use and manufacturing of energy efficient appliances. A mechanism be developed by the ENERCON to monitor strict compliance of energy conservation laws. Promote co-generation technologies to conserve energy. Minimizing energy wastage and maximizing energy efficiency. Encourage production and use of Ethanol from molasses for mixing with petrol. Demand side management in power sector for optimum utilization of installed capacity. Low power rate to agriculture tube wells during off peak hours through special meters. Recommendations (Contd.) Slide77:  Recommendations (Contd.) Laws and taxes designed to encourage self energy generation by domestic sector like use of solar heating, solar geyser etc. and sparing valuable natural gas for industrial growth. Promote efficient cooking stoves (chullas) in villages to conserve fuel-wood. Early finalization of formal negotiations to arrive at the best and most economical solution out of three alternatives (Iran, Qatar and Turkmenistan). Pipeline gas should be available by 2010. Gas utilities be allowed and facilitated to import LNG through private sector on BOO, BOT basis to meet the gap up to 2010 and continue to fill the gap thereafter. No government guarantees proposed. Strategic oil reserve be increased to 45 days from the present level of 20 days. To ensure growth of manufacturing sector, petrochemical industry must be established through setting up of naptha cracker. Additionally some oil gas fields, fully or partially be dedicated e.g. Kohat (Tal and Shakar Dara Block) and Dhakni Condensate Field. For this purpose proper study must be undertaken for incentivizing this sector in national interest. Slide79:  Recommendations (Contd.) Captive power for industries and new industrial estates be facilitated. Gas from dormant fields be utilized as CNG for supply to far flung areas. Increased share of coal and hydel in the energy mix will decrease the cost of energy supply thus boosting industrial development. President/Prime Minister may kindly use their good offices to encourage and revive interest of Japan (and South Korea) for establishing strategic oil reserves at Gwadar. In view of escalating energy prices particularly of oil we must develop/acquire hydrogen fuel cell technology for commercial applications. PAEC have the human capital to undertake this assignment (feasibility for the project has already been approved by CDWP). The project needs to be expedited. Pakistan has done well using CNG for cars. We need to fast track the introduction of CNG for the entire public transport to reduce our dependence on imported oil. Slide80:  Sugar mills have 2000 MW of available capacity during off-crushing season. This capacity with some modification of boilers can and should be made available on national grid. Incetivize/legislate production and mixing 5% of ethanol in petroleum. Facilitate through appropriate policy support, the establishment of economic size refineries (coastal at Khalifa point preferably as joint venture with China and at Kohat to refine crude from Tal field). Establish indigenous capacity to firmly estimate the underground potential and reserves of oil and gas (UET Peshawar project already approved by CDWP. It needs to be fast tracked). Transmission and distribution system needs to be properly planned and put in place in time enabling full capacity utilization and insuring uninterrupted energy needs to the end users. To Ensure speedy decision making for implementation of the approved “Energy Security Plan” Cabinet Committee on Energy should be reactivated and a Steering Committee of key stakeholders set up to assist CCE and to steer and coordinate all aspects of the Plan. Recommendations (Contd.) Slide81:  Proposed Financing Plan (2005-2030) Requirement of additional power generation 143,310 MW NOTE: Proposed Federal PSDP 2005-06 to 2009-10 around Rs. 1600 billion (USD 27 Billion) Slide82:  Energy Plan is realistic, doable and a must to achieve the desired growth rate for the next 25 years to make Pakistan an industrialized and knowledge economy as envisioned by the founding father and the President and Prime Minister. Conclusion Slide83:  THANK YOU Slide85:  LNG PRODUCTION & SUPPLY CHAIN Host Government Gas Fields Gathering + Processing LNG Liquefaction Shipment LNG Terminal – Bin Qasim Desalination / Other Customers KESC / WAPDA / IPP’s Storage Re gasification SSGC Gas Net Work SCOPE OF CONTRACT FOR SUPPLY:  SCOPE OF CONTRACT FOR SUPPLY LNG FOB LNG DES GAS SUPPLY TAIWAN, MEXICO (Buyer only commits to grty quantity purchase) JAPAN, KOREA (Buyer sets up own LNG terminal, and contracts LNG shipment) JAPAN, INDIA, USA (Buyer contracts for LNG purchase, shipment and sets up own LNG terminal) % of world LNG trade SELLERS ROLE BUYERS ROLE EXAMPLES Slide87:  Sources of LNG LNG trade will expand rapidly, with most new supplies coming from OPEC countries Source: International Energy Agency - World Energy Outlook 2004 Twelve countries having liquefaction facilities: Abu Dhabi, Algeria, Australia, Brunei, Indonesia, Libya, Malaysia, Nigeria, Oman, Qatar, Trinidad, Tokyo and U.S.A. Slide88:  Exports Imports Source: World oil and gas review 2002 by Eni WORLD GAS EXPORTS ROUTES FOR LNG United States Market Towards Japan From United States Asian Market European Market Trinidad and Tobago KARACHI, PAKISTAN FUTURE POTENTIAL LNG HUB PROPOSED LNG IMPORT PROJECT Slide89:  PROPOSED LNG IMPORT PROJECT LNG PRICES HAVE DECLINED RAPIDLY OVER LAST FIVE YEARS OVER 30% OF WORLD’S NATURAL GAS RESERVES ARE AROUND THE PERSIAN GULF AREA, IRAN AND QATAR ARE LEADING POTENTIAL EXPORTERS RECENTLY CONTRACTS HAVE BEEN SIGNED AT US$ 3/MMBTU A 500 MMCFD LNG TERMINAL COSTS AROUND $400 MILLION, TIME PERIOD 4 YEARS FSRU OR REFURBISHED LNG TANKER AS ALTERNATE TO TERMINAL CAN ALSO BE USED AT MUCH REDUCED COSTS ($200 MILLION) AND/OR THRU LEASING. APPROX TIME PERIOD 2 TO 2½ YEARS LNG LANDED COST (INCLUDING ASSET AMORTIZATION) PER THOUSAND CUFT US $2.50-2.75 WHILE NATURAL GAS US $5.50 (USA). LNG cost %wise Source: Total, Gaz de 3.5 – 4.1 2.8 – 3.4 Gas production: Reservoir to LNG plant, gas processing, associated pipelines (15 to 20 %) LNG plant: Gas treating, liquefaction, loading and storage, LPG and condensate recovery (30 to 45%) Shipping: 10 to 30 % Receiving terminal: Unloading, storage, regasification and distribution (15 to 25 %) 2.5 – 3.00 Projected VALUE CHAIN Slide90:  BRITISH PETROLEUM (UK) FULLY INTEGRATED SUPPLIER SHELL PETROLEUM (DUTCH / UK) “ MITSUBISHI (JAPAN) SHIPMENT & SUPPLY COMPANY ASIA PETROLEUM (PAK) PROJECT DEVELOPERS GRANADA GROUP (USA) “ AMZ SECURITIES (PAK) PROJECT FINANCER/ DEVELOPER FOTCO (PAK) TERMINAL / SUPPLY COMPANY ENGRO –VOPACK (PAK/DUTCH) EXISTING TERMINAL FACILITIES MITSUI/NICHIMEN (JAPAN) SHIPMENT/SUPPLY & PROJECT DEVELOPER SINGLE BOUY MOORINGS (DUTCH) MANUFACTURER / LEASING OF FSRU / TANKERS TRACTERBEL (BELGIUM ) INTEGRATED EPC COMPANY SSGC CAN ABSORB AROUND 300 MMCFD FROM 2007-8 TO COVER UNCONSTRAINED DEMAND REQUIREMENTS OF NEW / PROPOSED INDUSTRY EXPRESSION OF INTEREST FROM POTENTIAL PROJECT DEVELOPERS LNG IMPORT OPTION Slide91:  Implementation Agreement PROPOSED LNG IMPORT PROJECT STRUCTURE SIMILAR STRUCTURE AS FOR LPG PROJECT-JJVL. SUCCESSFULLY IMPLEMENTED BY SSGC WITHOUT GOP FUNDING OR GUARANTEES INTEGRATED PROJECT DEVELOPER / J.V NETWORK AT BIN QASIM OR Slide92:  Recommendations The import of LNG as an interim arrangement and additional security besides import of pipeline gas. The supply demand deficit in natural gas can be managed by import of LNG for Bin Qasim power generation, new IPPs and other consumer in Karachi area. The existing supplies of Karachi area is 800 MMCFD including major consumers like 250 MMCFD for power,70 MMCFD for fertilizer and 40 MMCFD for Pakistan Steel Mills. The equivalent quantity of gas available to SSGCL system from Sawan and Maino gas fields can be swapped to SNGPL system to meet the demand deficits in Punjab and NWFP. The LNG import may cost about US $ 2.75-3.5 per MM BTU at Karachii port. (The existing well head gas prices for Zone –III is US$ 2.5 per MMBTU). The LNG import project will be executed by private sector on BOO basis with government facilitation within a period of two and half years. SSGCL will have to guarantee of minimum quantity 300 MMCFD at least for 10 years (No Government guarantees proposed). Slide93:  THANK YOU Conclusion:  Conclusion We have seen the number of large dams (those at least 15 meters high) climb from 5,000 in 1950 to about 45,000 today. This means that for the last half century, we have been building on average 2 large dams per day. We don’t have a good count on smaller dams, but they likely number somewhere in the 800,000 range. The reservation behind these dams are capable of storing nearly 20 percent of total annual global runoff. And as is often the case, this global figure masks great variation and extremes among individual river systems. Lake Nasser, behind Egypt’s Aswan Dam, for example, is able to store fully two year’s worth of the Nile’s flow PRIMARY ENERGY CONSUMPTION:  PRIMARY ENERGY CONSUMPTION Million Tons Oil Equivalent (2003) Total World Energy Consumption: 9741.4 MTOE Pakistan: 44.8 MTOE Source: British Petroleum, Review of World Energy, June 2004. Thar Coal Field Important Data :  Thar Coal Field Important Data What Can Fill The Gap?:  What Can Fill The Gap? Source: SPE International (Society of Petroleum Engineers) Gas Reservoirs Around the World – 5000 TCF of World Gas Reserves Unconventional Reservoirs – Heavy Oil – Tight Gas Renewable Resources – Wind – Solar Fuel Cells

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