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Pakistan

 
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Pakistan

Energy

From 1947 to the early 1990s, the economy made considerable progress in the transformation from a wood-burning base to modern energy sources. The process remains incomplete. Bagasse (the woody residue left over from crushed sugarcane), dung, and firewood furnished about 32 percent of all energy in FY 1988. Some localities had been denuded of firewood, forcing the local population to use commercial energy sources, such as kerosene or charcoal. Domestic sources of commercial energy accounted for 77 percent of all commercial energy in FY 1990. The major domestic energy resources are natural gas, oil, and hydroelectric power. The remainder of energy requirements are met by imports of oil and oil products.

Crude oil production increased sharply in the 1980s, from almost 4.0 million barrels in FY 1982 to 22.4 million barrels in FY 1992. This increase was the result of the discovery and development of new oil fields. Despite this expanded production, however, about 28 million barrels of crude oil were imported annually in the early 1990s. The production from domestic oil refineries also rose in the 1980s, reaching 42 million barrels annually in the early 1990s. However, oil products imports accounted for about 30 percent of the value of all oil imports.

Pakistan vigorously pursued oil exploration in the 1980s and early 1990s and made a number of new discoveries. In the early 1990s, the most productive oil field was at Dhurnal in Punjab, accounting for 21 percent of total output in FY 1993. The Badin area in southern Sindh was the site of a number of discoveries in the 1980s, and its proportion of total output has continued to increase over the years. In the early 1990s, more favorable terms on pricing and repatriation of profits stimulated the interest of foreign oil companies. About twenty foreign companies are engaged in oil exploration, but poor security for workers and property in remote areas of Balochistan and Sindh remains a significant constraint on foreign investment.

The large Sui natural gas field in Balochistan was discovered after independence. Production at Sui began in 1955 and peaked in 1985. In the early 1990s, it remained the nation's most productive gas field, accounting for 46 percent of production in FY 1993. The second largest gas field, also located in Balochistan at Mari, accounted for 20 percent of all production. Twenty-five gas fields were operational in FY 1993. Natural gas recoverable reserves were estimated at 662.0 billion cubic meters, with an extraction rate in the early 1990s of around 14.0 billion cubic meters, up from 9.3 billion cubic meters in FY 1982 and 1.3 billion cubic meters in FY 1970.

Natural gas pipelines, in which the government owns controlling shares, link the Sui gas field and a few others to the main population centers and the major crude oil production areas. The southern pipeline leads from Sui to Hyderabad and Karachi, and a spur supplies Quetta. The northern pipeline branches at Faisalabad. One branch goes a little farther north of Lahore; the other branch is connected to the crude oil fields and supplies gas to Islamabad and Peshawar. There are plans for a new gas pipeline through which Iran would export natural gas to Pakistan.

Coal reserves were boosted substantially in May 1992 when a large coal field was discovered in the Thar Desert in Sindh. In early 1993, these reserves were estimated at 17 billion tons. However, much of Pakistan's coal has a low calorific value and a high ash and sulfur content, which limits its value. Output was 1.3 million tons in FY 1992, down from 1.8 million tons in FY 1982. The bulk of production is from small, privately owned mines whose owners generally lack funds, expertise, and interest in expanding output. A public-sector firm, the Pakistan Mineral Development Corporation, accounted for about one-fifth of output in the early 1990s. The corporation has six operational mines--at Degari, Sor Range, and Sharigh in Balochistan; Lakhra and Meting in Sindh; and at the Makerwal/Gullakhel complex straddling the border between Punjab and the North-West Frontier Province.

Hydroelectric power is an important domestic primary energy resource, and hydroelectric potential is estimated at around 10,000 megawatts. A large number of additional sites with major potential exist in the mountainous north, but the difficulty of access and the high cost of transmission to the populous south make development a distant prospect. A large proportion of hydrogenerators are located at two large multipurpose dams. The Tarbela Dam located on the Indus River in the North-West Frontier Province has an installed capacity of 2,164 megawatts, and the Mangla Dam situated on the Jhelum River in Azad Kashmir has an installed capacity of 800 megawatts.

In 1965 Pakistani officials contracted with the Canadian government for the supply of a 125-megawatt pressurized, heavy-water nuclear reactor, which in 1972 became operational near Karachi. This was Pakistan's only nuclear power plant in 1994, and its operating record is poor. In 1983 plans for a nuclear plant at Chashma, on the Indus River in Punjab, about 240 kilometers south of Islamabad, were announced. The construction of this plant was delayed, in part because of the reluctance of foreign governments to supply needed fuel and technology because of concern over possible military use of the atomic energy program. In 1993 Pakistani officials expected the plant to open in 1997 with a capacity of 300 megawatts. China is providing the necessary technology and materials for the Chashma plant. Pakistani officials expect that fuel for the plant will be provided by the uranium enrichment plant at Kahuta near Islamabad. Some observers, however, believe it is unlikely that the plant will be ready in 1997.

In FY 1992, the country had a total installed generating capacity of 9,293 megawatts, of which approximately 62.7 percent was thermal, 35.9 percent hydroelectric, and 1.5 percent nuclear. In FY 1991, industry consumed 34.2 of percent of electricity, households 31.7 percent, agriculture 21.4 percent, commercial businesses 4.3 percent, and other users 8.3 percent. A rural electrification program increased the number of villages having electricity from around 14,000 in FY 1983 to nearly 41,000 in FY 1992, leaving only about 5,000 villages without electricity. After the late 1970s, considerable improvement was made in transmission facilities. By 1983 a grid connected generators and urban centers of the more populous areas, largely in Punjab and Sindh. Installations of high-voltage transmission lines and other facilities helped reduce power losses. Nonetheless, in 1993 the World Bank estimated that 28 percent of electricity generated in Pakistan was diverted illegally in transmission and distribution, and even the government puts this figure at 12 percent.

In 1993 the government planned a rapid increase of generating capacity, in part through the expansion of existing hydroelectric and thermal units and in part through the construction of new plants. Nonetheless, observers expected shortages of electricity to continue in the early 1990s and probably longer. In much of 1993, both urban and rural areas experienced three power cuts a day lasting a total of around two hours. Industrial and commercial users are required to reduce consumption by an even greater amount, and they risk being disconnected if they violate "agreed-on levels." Peak demand for electricity is estimated to exceed the supply by around 30 percent.

In 1991 the power sector was opened to private capital, both foreign and domestic. In that year, a World Bank consortium that included investors from Britain, Saudi Arabia, and the United States agreed to finance a project for a new US$1.3 billion, 1,292 megawatt oil-fired power station at Hub Chowki in Balochistan, forty-eight kilometers west of Karachi. Construction began in September 1992. The consortium is responsible for the construction and operation of the power station, while its output is sold to the national grid. In 1992 the government announced plans to privatize the Water and Power Development Authority's thermal plants and area electricity boards, but in 1994 legal and political obstacles prevented implementation of this policy.

Some development of renewable energy sources has been undertaken, primarily for rural areas so isolated they would not otherwise have electricity in the foreseeable future. The aim is to upgrade village life while lowering urban migration, reducing reliance on firewood, and providing power to pump water for irrigation where possible. For example, a small family-owned biogas plant uses human and animal waste (from three or four water buffalo, for example) to produce around 2.8 to 4.2 cubic meters of gas a day for heating and lighting. Larger biogas plants serve a number of homes or a village. Construction costs are too high for most villagers unless the government underwrites installation.

Data as of April 1994

 

Pakistan - TABLE OF CONTENTS

  • Section - The Economy


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