Thursday, November 30, 2023

Pakistan unable to diversify sources of energy to overcome crisis

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Reports state that Pakistan is looking for a new energy alliance to guarantee a consistent supply of electricity to homes and businesses. In order to combat the energy issue, Pakistan is attempting to diversify its energy sources. A group of Pakistani ministers including Musadik Masood Malik, Minister of State (Petroleum Division) visited Kazakhstan from November 8 to 11.

Pakistani ministers met with Akchulakov Bilat Uralovich, the energy minister for Kazakhstan, during the visit. In order to facilitate gas supplies from Russia through Kazakhstan and Kazakh investment in pipeline and refinery projects in Pakistan, the two sides discussed the possibility of connecting Kazakhstan’s existing natural gas pipeline network with the proposed TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline network.

Only if India joins the effort might initiatives like TAPI get off the ground. According to the report, Kazakhstan has declined to abide by Pakistan’s suggestions. Kazakhstan stated that they do not generate enough gas to be able to participate in the TAPI project in response to Pakistan’s request.

Additionally, the Kazakh side stated that while work is still being done on its own internal pipeline projects, it would not be able to provide funding for the Pakistan gas network. On the eve of the sixth CICA conference in 2013, Pakistan demanded that Kazakhstan be added to the TAPI project. Meanwhile, Kazakhstan had declined Pakistan’s proposal and emphasised that it lacked sufficient gas to deliver.

An energy crisis, soaring inflation, and a decline in remittances have all been problems for Pakistan. Exports from Pakistan decreased from USD 3 billion to USD 2.2 billion. Political and economic considerations in the Russia-Ukraine conflict have further influenced the energy market.

Pakistan aims to finish the Trans-Afghanistan Pipeline (TAPI) gas pipeline project. However, because of disagreements between the promoters and a lack of funding, the work is moving along extremely slowly. At an average cost of USD 12 per metric million British thermal units, Pakistan has been buying LNG (MMBtu). If Pakistan begins importing gas through the TAPI pipeline, the price would be approximately USD 6-7 per MMBtu and the country has 5% hares in the pipeline.

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