HIGHLIGHTS:

• Pakistan’s energy demand over the next 15 years is expected to grow at a rate of between 4.4 to 6.1% per annumconsidering the expected economic growth. The 60.2 million TOE (tons oil equivalent) energy demand in 2007 is expectedrange between 115 to 148 million TOEs in 2022.

• Natural gas with a share of about 50% in total primary energy demand will remain the leading fuel followed by oil with ashare ranging between 24 – 30%. Coal’s share will increase from 7% in 2007 to 11% in 2022.

• The domestic energy supply which in 2007 was around 43.0 million TOEs is forecast to reach a peak of 54.2 million TOEsin 2013 and then decline to 43.0 million TOEs by 2022 primarily due to declining domestic gas supplies.

• Pakistan therefore faces a large and growing energy deficit, during next 15 years period. This gap will partly bridge by theplanned nuclear, coal and hydel projects, including a large dam. The remaining gap will need to be met with imports ofoil and gas since domestic production of these fuels is likely to be insufficient.

• Natural gas deficits are expected to occur from 2012 onwards, for which Pakistan will need to arrange gas imports throughcross-border gas pipelines and in the form of Liquefied Natural Gas (LNG).

• LNG therefore appears to be the more realistic gas import option for Pakistan in the near-to-medium term. LNG willalso have the advantage of providing the country with flexibility in sourcing gas from different countries. However, thisoption will require substantial investment in storage terminal, re-gasification and allied facilities, as well as long-term off-take agreements.

• The cross-border gas pipeline(s) a cheaper gas import option for Pakistan, however, subject to political uncertainty andexpected to start operation from 2015. Recently, some progress has been made in this regard.

• In view of expected petroleum product supply gap, it is expected that a number of new refining projects will also beimplemented during next decade.

• A detailed assessment of the port facilities in Pakistan will need to be carried out to recommend options for handling oflarger shipping vessels leading to competitive benefits through lower ocean freight rates.

• Increased dependence on imported oil and gas makes it imperative that Pakistan should formulate and implement its“strategic storage” policy for oil and gas stocks.

• There is also a need to bring significant improvement in the high conversion and transmission losses of the power sectoralongwith enforcement of energy conservation measures in all consuming sectors.

• For the longer term it is in the country’s national interest to develop its domestic energy resources including increasedonshore/offshore oil and gas production and sustainable development of the Thar coal reserves.

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I. PAKISTAN ENERGY OUTLOOK : AN OVERVIEW1.0 BACKGROUND

Energy plays an important role in socio economic development of a country and desired level of economic growth canonly be achieved if energy inputs at required levels are made available. Currently, the developing countries like Pakistanare facing challenges of meeting the rising energy demand due to expanding economy and population base, increasingurbanization and improvement in living standards. At the same time the domestic supply of natural gas the main energysource is expected to decline after 2013, while energy prices are continuously increasing.

At present Pakistan with a population base of 158.2 million is consuming 60.20 million TOE’s of primary energy. Around68% is being met from domestic resources (primarily natural gas) while remaining 32% of the primary energy requirementsare being met by imports i.e. crude oil / petroleum products and coal.

The current challenging circumstances require a thorough analysis of the energy consumption trend and assessment ofenergy supply position to enable development of a strategy to meet the widening gap in energy demand/supply of thecountry. It is in this background that Pakistan Institute of Petroleum (PIP) which represents all the segments of oil andgas industry took initiative of preparing the Pakistan Energy Outlook – 2006 covering the period 2005-06 to 2019-20.Now Pakistan Energy Outlook covering the period 2007-08 to 2021-22 has been developed.

2.0 BASIS OF FORECASTThe energy demand forecast presented in Pakistan Energy Outlook is based on the basic premise that energy demandand economic growth measured in terms of Gross National/Domestic Product (GNP/GDP) and value addition by mainsectors of the economy have direct relationship. Accordingly, a number of economic models were developed wherebythe historical consumption has been correlated with GNP/GDP sectors value addition/activity parameters and populationetc. In some cases the demand forecast has also been developed based on historical trend or assessment of futuregrowth/potential. Two cases of energy demand forecast have been developed based on annual GNP/GDP growth ratesof 4.5% Case-I and 6.5% Case-II. The case-I is based on historical growth and can be termed as a conservative scenariowhile case-II reflects the growth achieved during last five (5) years i.e. 2002-07.

3.0 PRIMARY ENERGY DEMANDThe developed energy demand and supply forecast reveal that over the period 2008-22 the primary energy demand willgrow at a higher rate as compared to the rate achieved in the past despite high energy prices. The growing energy demandwill be met for the most part by conventional resources such as natural gas, oil, coal, hydel and marginally by nuclear andrenewable. The primary energy production (primarily) natural gas will show a declining trend as such the energy demand/ supply gap will widen with increasing dependence on imported energy.

Figure-1PAKISTAN: Primary Energy Consumption / Demand Pattern - Fuel Wise

Case - 1 Case- -2

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Pakistan’s total primary energy demand under case-I is expected to increase from 60.20 million TOEs in 2007 to 116.00million TOEs in 2022 and 147.50 million TOEs in case-II. During 1992 – 2007 primary energy requirements of the countryincreased at an annual growth rate of 4.8%. As per developed forecast the primary energy demand will increase at annualgrowth rate of 4.4% and 6.1% respectively under the two cases. Natural gas will remain a dominant fuel (i.e. 49% incase-I & 47% in case-II) fol lowed by Oil (Petroleum products), hydel, coal, etc. (Figure-1).

The oil (i.e. petroleum products) share in total primary energy demand is expected to decline from 30.4% in 2007 to24.2% (case-I) and 29.9% (case-II) in 2022. The oil (petroleum products) which during 1992-2007 achieved an annualgrowth rate of 3.1% is expected to show an annual growth rate of 2.2% (case-I) and 5.3% (case-II).

Coal’s share in the total primary energy requirements is expected to increase from 7.4% (2007) to around 11% underthe two cases of forecast. The country’s coal requirements during 1992-2007 have increased @ 5.1% while as per forecastthe coal requirements will increase @ 6.7% (case-I) and 8.5% (case-II). It may be mentioned that Government as partof development of indigenous energy resource base is aiming to increase Coal’s share significantly as the country has largereserves of coal at Lakhra (1.3 billion metric tons) ), Sonda (7.1 billion metric tons) and Thar (175.5 billion metric tons.However on ground progress with respect to the development of infrastructure and mining has been very slow.

Hydel, the cheapest sources of energy is currently contributing to the extent of 12.7% in country’s energy demand. Itsshare will increase 13.5% (case-I) and 10.6% (case-II). The annual growth in hydel energy will achieve a level of 5.3%in the two cases while historical growth was in the vicinity of 3.7%. It may be mentioned that the increase in hydel share/ growth will be primarily dependent upon construction of dams as per considered time frame. The nuclear and renewableshare will remain around 2.0% of the total requirements. The annual growth of natural gas will remain in the range of4.7% (case-I) and 6.2% (case-II).

Figure-2PAKISTAN: Primary Energy Consumption / Demand Pattern - Fuel Wise

Industrial and power (including own use & losses) are the leading consumers of primary energy followed by transportand residential / commercial sectors. Agriculture and Government/Defence sectors consume nominal volume of energy(Figure-2).

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In 2006-07 power sector was the leading sector with share of 29.1% in total energy requirements of the country. As perforecast the power sector share will decline to around 27% under the two cases. The power sector’s energy requirementshave been forecasted to increase at an annual growth of 4.2% (case-I) and 5.9% (case-II). The current deficit in electricity(especially in peak hours) is primarily due to non-execution of power generation projects (especially hydel), old powergeneration plant and high transmission & distribution losses (including theft).

Industrial sector is expected to become the leading energy consuming sector taking the position previously occupied bypower sector. Industrial sector achieved an annual growth rate of 12.1% during the last five (5) years as compared toannual growth of 5.3% achieved during 1992-2007 period. Accordingly, Industrial Sector’s share will increase from 26%in 2007 to 30% (case-I) and 30.9% (case-II) in 2022. The industrial sector energy demand is expected to increase @5.6% (case-I) and 7.6% (case-II).

Transport sector is currently consuming 17.2% of total primary energy requirements. This sectors’ share in primary energyrequirements is expected to decline to a level of 16.7% under (case-I) and 17.1% under (case-II) slightly lower then thehistorical share. It may be mentioned that during last fifteen (15) years the transport sector’s energy requirements increased@3.9%. As per forecast the energy requirements of transport sector will increase at an annual growth rate 3.7% (case-I) and 5.7% (case-II).

In 2007 residential / commercial sector’s share in energy consumption of the country was 14.8% with annual growth of5.8% during 1992-2007. During the forecast period this sector is set to grow @ 4.7% (Case-I) and 6.4% (Case-II). Thesectors share in the total primary energy requirements will accordingly be around 15%.

4.0 PER CAPITA ENERGY CONSUMPTIONPakistan per capita energy consumption achieved a level of 0.318 TOE’s in 2007 as compared to 0.267 TOEs in 1992.As per forecast the per capita energy demand in 2022 will be 0.561 TOEs (case-I) and 0.714 TOEs (case-II) (Figure-3).

Figure-3PAKISTAN: Per Capita Energy Consumption Trend

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II. ENERGY OUTLOOK: DETAILS1.0 FORECAST BASIS & ASSUMPTIONS

1.1 Demand ForecastAAs stated earlier, the energy demand forecast for 2008-22 has been developed with the help of econometric modelswhereby the historical consumption is correlated with the economic variable(s) e.g. GNP/GDP, sector(s) value addition,vehicle population, etc. Two cases of energy forecast based on economic growth have been developed:

• Case – I: (GNP/GDP @ 4.5% per annum)• Case – II: (GNP/GDP @ 6.5% per annum)

The energy forecast has been based on GNP/GDP and sector(s) value addition as it is an established fact that economicgrowth and energy demand are linked but the strength of the link varies from country to country and region to region.For example in case of Non-OECD countries economic growth has been closely correlated with energy demand. Onlyrecently with in the past decade or so economic growth has begun to out-pace the growth in energy use among theworld’s emerging economies. In case of Pakistan the relationship between economic growth and energy demand is verystrong as is evident from Figure-6:

As a first step the final energy demand forecast for each sector has been developed using regression models based onthe actual energy consumption of the sector over the past fifteen years. Several variables have been tested to identifythe key factor (s) that influenced the energy demand in each particular sector. The following variables were found significant:

Sector Key variable1. Residential/Commercial GNP2. Industrial GDP (Manufacturing)3. Agriculture GDP (Agricultural)4. Transport GDP (Transport & Storage)5. Govt./Defence (Government Expenditure)

In second step sector’s individual fuel forecast has been developed.

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In each case different growth assumptions were used for each key variable / sector. The following growth rates for thekey variables affecting energy demand in the economic sectors have been considered:

Since earlier worked out sector-wise energy demand forecast is the final energy demand. It does not include fuel (i.e.Gas, FO, HSD, Hydel, and Nuclear) consumption for power generation. The addition of energy consumption for powergeneration & associated conversion, distribution and transmission losses transform the earlier estimates into primaryenergy demand/requirements. This gross energy i.e. final plus energy consumed for generating final energy is termed asprimary energy. The relationship between the primary and direct energy is illustrated in the following diagram:

The primary energy input for power generation was then split into each energy source (natural gas, fuel oil, coal, hydel,nuclear, renewables) on the basis of assessment of different power projects expected to mature in the coming years. Theadditional power generation capacity has been assumed to be based on the following energy sources during forecastperiod:

- Hydel = 7,810 MW- Nuclear = 900 MW- Thermal = 4,920 MW for Case-I & 14,250 MW for Case-II- Coal = 2,500 MW for Case-I & 3,500 WM for Case-II- Renewables = 1,500 MW

The basis and assumption of T&D losses and conversion efficiency is as follows:

- The power transmission and distribution (T&D) losses as percent of electricity consumed in the country have beenassumed to reduce from the current high of 35% down to 33% by the year of 2017-18 through efficiency measuresinitiated by WAPDA. It is noted that this level would still be high compared with the international norm of 15-20% T &D losses.

GNP(fc)GDP(fc)GDP (Agriculture)GDP (Manufacturing)GDP (Transport & Storage)Government Expenditure

7.1%7.0%4.2%

11.2%5.0%5.6%

4.7%4.7%3.2%6.2%4.4%1.5%

4.5%4.5%3.0%6.0%4.0%2.0%

6.5%6.5%4.0%8.0%6.0%3.0%

Key Variable Historical Projected

5 Years Avg. 5 Years Avg. Case - IICase - I

F

DefinitionsA = Gross inputs of Energy (i.e. Primary Energy)B = Final (End) consumption of Energy

(Excluding Electricity)C = Input of fuel to power generation (PG)D = Electric energy generatedE = Electric energy sent outF = End consumption of electric energy

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- The conversion efficiency of primary energy to electricity produced in Pakistan has been improved from 34% to 36%in 2017-18. While it is recognized that the efficiency of future thermal plants is likely to increase due to combined-cycletechnology, nevertheless Pakistan will retain a certain level of low-efficiency sources such as hydel and coal in the energymix.

1.2 Supply ForecastThe domestic supply forecast has been based on long term production / supply data of natural gas obtained from DirectorGeneral Petroleum Concession (DGPC), estimated crude oil and coal production supply. In view of expected deficitsimport projects of gas in the form of Liquefied Natural Gas and through cross border pipelines as well import of crudeoil, petroleum products and coal have been considered.

2.0 FINAL ENERGY DEMANDPakistan final energy demand in 2022 is projected to achieve a level of 74.20 million TOE’s (case-I) and 96.49 millionTOE’s (case-II), more than the double of energy consumption of 36.50 million TOE’s in 2007. The final energy demandduring 2008-2022 as such will grow at an annual growth rate of 4.7% in case-I and 6.6% in case-II.

2.1 Fuel WiseThe fuel wise final energy demand shows that natural gas will maintain the largest share at 46% in 2022 under both cases,followed by petroleum products (28%), Electricity (15%) and coal (11%) in both cases

(Figure-7).

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• ElectricityThe share of electricity in country’s final energy demand will achieve a level of around 15% in 2022 as compared to 16%in 2007. Residential & Commercial sector is the largest consuming sector of electricity with a share of 54%, followedby Industrial (31%) and Agriculture (9%) sectors, while government/defence sector’s share in 2007 will be in the vicinityof 6%.

• Natural GasNatural Gas will be the largest consuming fuel during the projected period, with a share of 46% in total country’s finalenergy demand. Industrial sector will be the largest consuming sector of natural gas with 60% share in total natural gasdemand under case-I and 61% share under case –II. Residential & commercial sector’s share will be in the range of 26-28%. Natural Gas in compressed form (i.e. CNG) is expected to achieve a significant share in energy demand of transportsector. CNG demand in transport sector has been projected to be around 3.39 – 4.52 million TOE’s..

• CoalCoal demand primarily as fuel for industrial sector is expected to be around 8.31 million TOE’s (case-I) and 10.34 millionTOE’s (case-II) in 2022. Coal’s share in total final energy demand is projected to be around 11% under both cases.

• Petroleum ProductsPetroleum products demand is expected to increase from 11.72 million TOE’s in 2007 to 20.36 million TOE’s and 27.26million TOE’s in 2022 under case-I and case-II respectively, growing at an average annual rate of 3.2% (case-I) and 5.2%(case-II).

HSD is the biggest portion in petroleum products demand with shares of 57% (case-I) and 55% (case-II) in 2022, growingat an annual rate of 2.0% and 3.8% during projected period under case-I and case-II respectively. Gasoline is the secondmain fuel of petroleum product consumed in final energy consumption with a share of 10% in 2007 and is projected toregister a robust growth 6.0% (case-I) and 8.2% (case-II) per annum. LPG is projected to grow at an average annual rateof 9.1% (case-I) and 12.8% (case-II). On the other hand, SKO and FO are expected to reduce at with an annual growthrate of -0.9% and -1.9% respectively under both cases. While JP-4 and LDO expected to show the stagnant demandduring next 15 years.

2.2 Sector WiseIn sector wise final energy demand, industrial sector will maintain its dominant position throughout the historical andprojected period with a share of 47%, followed by transport (26%), residential & commercial (24%), agriculture (2%)and Govt/Defence (1%) sectors under both the cases. (Figure-8)

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• Residential and Commercial SectorThe most significant variables affecting Pakistan’s residential & commercial energy consumption/demand are growth inincome, the number of households and improvement of living standards. Energy demand in the residential & commercialsector is expected to grow at an annual rate of 4.7% (case-I) and 6.4% (case-II) against the average annual growth of5.8% during last fifteen (15) years (Figure-9).

Natural gas and Electricity are the main fuels of residential & commercial sector with shares of 53% and 35% respectively.During the forecast period the natural gas demand of this sector is expected to grow at an annual rate of 4.1% and 5.4%under case-I and case-II respectively. On the other hand electricity demand is expected to grow at an annual rate of 4.8%(case-I) and 6.4% (case-II).

LPG is also being consumed as cooking fuel in residential and commercial sector and its share will increase from 5% in2007 to 10% (case-I) and 14% (case-II) in 2022. While kerosene and coal consumption is very nominal.

Fiture - 9

• Industrial SectorPakistan's industrial sector was consuming 43% of country’s total final energy consumption in 2007. Under both the casesit will consume around 47% of country final energy demand in 2022. The sector’s energy demand during 2008-22 as suchwill grow at an annual growth rate of 5.6% (case-I) and 7.6% (case-II), significantly higher than the historical growth of5.3% per annum (Figure-10).

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Among the fuels being consumed by this sector, natural gas currently has a dominating share of 51%. This share willincrease to 58/60 % in 2022, while annual growth rate under case-I will be 6.5% and 8.6% under case-II. Despite all thetalk of increased utilization of coal (specially Lakhra & Thar), the coal’s share will decline from 26% in 2007 to 24% (case-I) and 23% (case-II) in 2022. Oil’s share in sector’s energy demand will decline from around 10% in 2007 to around 7%in 2022 is grow in oil demand is projected at 3.7% (case-I) and 5.5% (case-II). Electricity with a share of 11% is expectedto grow at 5.4% and 7.2% per annum under case-I and case-II respectively.

• Transport SectorThe transport sector’s share of Country’s final energy demand will decline from 30% (2007) to 26% (2022) under thetwo cases. This sector’s energy demand is expected to grow at an annual rate of 3.7% and 5.7% under case-I and case-II respectively (Figure-11).

The fuels being consumed by this sector include diesel, CNG/LPG, gasoline and jet fuel. Bulk of the fuel demand of thesector is expected to be generated by road transportation as currently it is consuming 87% of sector’s energy requirements.Diesel is being primarily consumed by heavy vehicles i.e. trucks, tractors & buses. Its demand during the forecast periodwill increase 1.4% (case-I) and 3.2% (case-II). Light vehicles i.e. cars, motorcycles & rickshaws are consumingCNG/LPG/Gasoline, while Jet fuel is being consumed by aviation industry.Figure - 11

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The light vehicle fuel comprises of three fuels i.e. gasoline, LPG and CNG. Two wheelers are consuming gasoline and theirshare in sector’s gasoline demand is expected to increase from 52% in 2007 to 81% in 2022 as motorcycle populationis increasing at high rate i.e. 14% during last five years.

It may be mentioned that gasoline which sometime back was perceived as rich man’s fuel and accordingly highest rateof taxes were levied will become middle/lower class fuel as bulk of it will be consumed by two (2) wheelers owned andoperated by members of middle/lower middle class. Three (3) wheelers are currently consuming gasoline and LPG inratio of 70:30 and it may be mentioned that CNG penetration in three wheelers is in initial stage. The four (4) wheelersare consuming CNG, gasoline and LPG with the ratio of 69:26:05 respectively

(Figure-12).

Light vehicle fuels share in sector’s energy demand will increase from 26% in 2007 to 34% in 2022 under both cases.CNG will remain as a dominant fuel and its share will remain in the range of 50 – 52%, while its demand is expected togrow at an annual rate of 7.3% and 9.3% under case-I and case-II respectively. Gasoline will also maintain the share ofaround 44% primarily due to high growth rate of two wheelers. On the other hand the LPG’s share is expected to declinefrom 6% in 2007 to 5% (case-I) and 4% (case-II), while its demand will grow at an annual rate of 5.1% (case-I) and 6.4%(case-II).

• Agriculture SectorThe agriculture sector is currently consuming small volume of energy i.e. 0.811 million TOE’s. This volume will achievea level of 1.60 million TOE’s (case-I) and 1.32 million TOE’s (case-II) in 2022 with annual growth during 2008-22 of 2.5%(case-I) and 3.4% (case-II). The main fuels being consumed are electricity, LDO with shares of 82% and 18% respectively.The growth in sector’s electricity demand is expected to be in the range of 3 - 4% per annum.

• Government/Defence SectorThe energy demand of government/defence sector is expected to achieve a level of 1.06 million TOE’s (case-I) and 1.23million TOE’s (case-II) in 2022. The sector’s energy demand during 2008-22 as such will increase @ 2.0% and @ 3.0%respectively. Electricity growing at an annual rate of 3.3% (case-I) and 4.8% (case-II) will be the leading fuel followed bypetroleum products (including Jet fuel, Gasoline, Kerosene, HSD and FO) will remain stagnant the outlook period.

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3.0 PRIMARY ENERGY DEMANDThe discussion presented in earlier sections pertained to final energy i.e. energy consumed by end-consumers/sectors.However, in order to generate/provide the final energy significant volume of energy is consumed/lossed during processing,transformation, generation and as feedstock. This gross energy i.e. final plus energy consumed/lossed for generating finalenergy is termed as primary energy.

In 2007, the country’s primary energy consumption was estimated to be around 60.20 million TOE’s as compared to29.94 million TOE’s in 1992. The primary energy consumption during 1992-2007 as such increased at an annual growthrate of 4.8%. Over the years the power generation losses, feedstock and transmission & distribution losses share in totalprimary energy has around 39% during last fifteen years.

Figure - 13

Pakistan’s total primary energy demand under case-I is expected to reach at a level of 116.00 million TOEs in 2022 and147.50 million TOEs in case-II. As per developed forecast the primary energy demand will increase at annual growth rateof 4.4% and 6.1% under the two cases respectively. Over the next fifteen years the power generation conversion losses,feedstock and transmission & distribution losses share in total primary energy will assume to reduce from 39% in 2007to 36% in 2022 (Figure-13).

During the outlook period, Coal is projected to grow at the fastest rate of around 6.7% (case-I) and 8.5% (case-II),followed by natural gas at 4.7% and 6.2% under case-I & case-II respectively. The oil products is expected to show anannual growth rate of 2.2% (case-I) and 5.3% (case-II), while hydel and nuclear will grow @ 5.3% and @ 7.8% perannum respectively.

Natural gas will remain a dominant fuel in country’s primary energy requirements (i.e. 49% in case-I & 47% in case-II).The demand is projected to increase from 29.31 million TOEs in 2007 to 57.07 million TOEs (case-I) and 69.36 million

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TOEs (case-II) in 2022.

Oil products is the second major consuming fuel in Pakistan and the demand is projected to increase from 18.30 millionTOEs in 2007 to 28.05 million TOEs in 2022 under case-I and 44.04 million TOEs under case-II. This level of increase isprimarily due to increased requirements of furnace oil by power generation. The oil products share in total primary energydemand is expected to decline form 30.4% in 2007 to 24.2% (case-I) and 29.9% (case-II) in 2022.

Coal’s share in the total primary energy requirements is expected to increase from 7.4% (2007) to around 11% underthe two cases of forecast. Hydel is currently contributing to the extent of 12.7% in country’s energy demand. Its sharewill increase 13.5% (case-I) and 10.6% (case-II). Nuclear and renewables share in total primary energy demand (Figure-14 & 15).

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es

57.07

mm

toes

GAS,

Hyd

el,

15.6

9 m

mto

es

Coa

l,12

.48

mm

toes

21

PAKISTAN

ENERGYOUTLOOK

PAK

ISTA

N :

PRIM

ARY

EN

ERG

Y D

EMA

ND

- 20

21-2

2C

ASE

- II

Nuc

lear

,1.

57 m

mto

es

Rene

wab

les,

1.09

mm

toes

Oil

Gas

Coa

lH

ydel

Nuc

lear

Rene

wab

les

30%

49%

7% 13%

1%--

Shar

e of

Ene

rgy

Mix

30%

46%

11%

11%

1% 1%

(60.

20 m

mto

es)

(115

.95

mm

toes

)20

0720

22

69.3

6 m

mto

esG

AS,

Hyd

el,

15.6

9 m

mto

es

Coa

l,16

.74

mm

toes

Oil,

44.0

4 m

mto

es

4. 0 ENERGY SUPPLY SOURCES4.1 Domestic Supply

The natural gas, hydel, nuclear and renewables are 100% locally produced energy sources, while crude oil, petroleumproducts and coal are produced locally as well as imported.

Natural Gas is the main source of domestic energy followed by petroleum products (Oil), coal, hydel, nuclear andrenewables are the other sources of primary energy.

Figure - 16

The natural gas share during 2007-22 will decline from 68% to 29% while crude oil/LPG share will slightly increase from9% to 12%. Coal share will increase from 4% to 15% during next fifteen years. The other energy sources (Hydel, Nuclearand Renewables) share will fluctuate between 17% to 44% (Figure-16).

4.2 Energy DeficitAs stated earlier, Pakistan primary energy demand is expected to reach a level of 116.00 million TOEs (Case-I) and 147.50million TOEs (Case-II) in 2022. As compared to the primary energy demand the domestic supply of energy is expectedto achieve a peak level of 54.20 million TOEs in 2013. In subsequent years the supply will show declining trend reachinga level of 43.00 million TOEs in 2022. The gap in primary energy demand/supply in 2022 is estimated to be around 73.00million TOEs in Case-I and 105.00 million TOEs in Case-II (Figure-17 & 18).

PAKISTAN

ENERGYOUTLOOK

22

Ener

gy D

eman

d/G

DP

Inde

x

1991

-92

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

23

PAKISTAN

ENERGYOUTLOOK

PAKISTAN

ENERGYOUTLOOK

24

4.3 Natural Gas DeficitNatural Gas is the most important energy source for Pakistan, currently meeting over 50% of the country’s energy needs.With demand for natural gas outstripping domestic supplies, the deficit in the natural gas demand/supply position isexpected to start from 2012 under both cases I & II. In 2022 natural gas deficit is estimated to be around 44.56 millionTOEs (case-I) and 56.86 million TOEs (case-II) (Figure-19 & 20).

Technically a deficit already exists since additional gas is not available for the power and industrial sectors until 2012 whenLNG imports and cross border natural gas pipeline expected to begin from gas rich countries of middle-east and centralAsia, and the shortfall is being met with increasing quantities of imported fuel oil.

4.4 Oil/Petroleum Products DeficitThe current deficit in crude oil and petroleum products is expected to grow in view of increased furnace oil requirementsfor power sector and demand on diesel in transport sector.

(Figures in Million TOEs)

4.5 Energy ImportsBased on the demand/supply analysis, it is expected that over 60-70% of the energy demand of the country in 2022 willbe met by gas, oil and coal imports with consequent adverse impact on country’s economy as cost of imported energywill be significantly higher than the domestically produced/supplied energy.

CASE-I - DEFICIT IMPORTS (million TOEs)

22.8

29.5

28.0

2006-07 Actual

2011-12

2016-17

2021-22

3.7

5.5

5.5

5.4

27.9

36.2

44.0

Case-II

(17.3)

(24.0)

(22.6)

(22.4)

(30.7)

(38.6)

Case-I Case-II

18.3 (14.6)

Case-I

Year Petroleum Products Local Crude Oil Petroleum Products Demand & LPG Supply Deficit

14.6

17.3

24.0

22.6

-

4.1

19.8

44.6

2006-07 Actual

2011-12

2016-17

2021-22

17.4

24.3

48.0

73.1

Year Natural Gas Crude Oil /

CoalTotal

Petroleum Products Imports

2.8

2.9

4.2

5.9

25

PAKISTAN

ENERGYOUTLOOK

PAKISTAN

ENERGYOUTLOOK

26

27

PAKISTAN

ENERGYOUTLOOK

The earlier presented outlook clearly indicates the need to enhance the pace of development of indigenous resources(especially coal, hydel & renewables) on war footing and also proceed to execute the LNG and cross border natural gaspipeline(s) projects. At the same time the country has to modernize the energy infrastructure (specially electricity) touse energy wisely by embarking upon an energy conservation program and significantly reduce the transmission distributionlosses (including theft).

14.6

22.4

30.7

38.6

-

4.1

28.0

56.9

2006-07 Actual

2011-12

2016-17

2021-22

17.4

29.7

63.8

104.7

Year Natural Gas Crude Oil /

CoalTotal

Petroleum Products Imports

2.8

3.2

5.1

9.2

PAKISTAN

ENERGYOUTLOOK

28