South Asia Investor Review

Nuclear power plants in Pakistan generated 15,540 GWH of electricity in 2021, a jump of 66% over 2020. Overall, Pakistan's power plants produced 136,572 GWH of power, an increase of 10.6% over 2020, indicating  robust economic recovery  amid the COVID19 pandemic.  Pakistan Electric Power Generation. Source: Arif Habib Hydroelectric dams contributed 37,689 GWH of electricity or 27.6% of the total power generated, making hydropower the biggest contributor to power generated in the country. It is followed by coal (20%), LNG (19%) and nuclear (11.4%).  Cost Per Unit of Electricity in Pakistan. Source: Arif Habib Nuclear offers the lowest cost of fuel for electricity (one rupee per KWH) while furnace oil is the most expensive (Rs. 22.2 per KWH).  Pakistan Electric Power Generation Fuel MiX. Source: Arif Habib Construction of 1,100 MW nuclear power reactor  K2 unit in Karachi  was completed by China National Nuclear Corporation in 2019, according to  me...

Oil consumption in Pakistan jumped 19% to 20.8 million tons in 2021, a strong indication of the country's economic recovery from the COVID-impacted 2020. In addition to oil, Pakistanis also consumed nearly 4 billion cubic foot of natural gas every day. Energy is fundamental to the functioning of any economy.  Pakistan Oil Consumption. Source: Arif Habib Pakistan's furnace oil consumption has been declining for several years as power producers continued to switch fuel to liquified natural gas (LNG) in recent years. However, the sudden jump in LNG prices forced them to use more furnace oil in  year 2021  than in 2020. There was also a big jump in diesel (HSD) and petrol (MS) with a rise in number of vehicles on the nation's roads.  Pakistan LNG Imports 2017-2021 in million tons    Pakistan Natural Gas Consumption in Billion Cubic Feet Per Day “Year 2021 proved to be remarkable for the automobile sector as there was a volumetric sales growth of 90% on a year-o...

Soaring LNG prices are adversely affecting Pakistan's balance of payments and threatening the nation's  post-COVID  economic recovery.  Pakistan's trade deficit has widened to nearly $12 billion in July-September 2021 quarter, up more than 100% from the same period last year. The nation's heavy reliance on expensive imported energy has been the main cause of prior balance of payments crises that have forced it to seek  IMF bailouts  more than a dozen times in the last 70 years.  Global LNG Prices. Source: The Peninsula Qatar   Pakistan: World's Fastest Growing LNG Market. Source: Bloomberg Global Commodity Price Increases The average LNG price for November delivery into Northeast Asia was estimated at about $32 per metric million British thermal units (mmBtu), up nearly 20 percent from the previous week, according to  the Peninsula Qatar publication . Price agency S&P Global Platts said on Thursday that its Japan-Korea-Marker, which is widely ...

Pakistani power sector is continuing its march toward cheap indigenous sources of electricity.  Hydropower  component has increased 22%, coal 57% and nuclear 8% while oil is down 54% and natural gas and LNG are down 32% and 15% respectively, according to  Bloomberg . These changes in power mix are expected to help significantly reduce power subsidies that run into hundreds of billions of rupees contributing to large annual budget deficits. Data From NEPRA. Courtesy Pakistan Today Coal's contribution to power mix now stands at just 21%, in spite of 57% increase in use of coal in Fiscal Year 2020. It is still almost half of the global average of 38% of electricity produced from coal. Overall, the contribution of fossil fuels in electricity generation is now about 54%, down from nearly 66% a few years ago. Pakistan Power Generation Mix. Source: Bloomberg Hydropower  and  natural gas  now contribute 32% each, making them the biggest sources of ele...

Pakistan National Electric Power Regulatory Authority (NEPRA) has cut electricity price by 2.99 rupees (2.7 U.S. cents) per unit under the fuel adjustment for the month of December, 2017, according to  news reports . This reduction brings the price per kilowatt-hour to Rs. 5.11 (4.60 US cents), down from Rs. 8.10 (7.30 US cents). Power Rate in Pakistan: Reduction brings the price per kilowatt-hour to Rs. 5.11 (4.60 US cents), down from Rs. 8.10 (7.30 US cents). The CPPA (Central Power Purchasing Authority) said total energy was generated at the cost of Rs. 25.24 billion, or  Rs. 3.52/unit  for the month of November, 2017. The reduction in the actual generation cost is mainly because of a decline in fuel prices, zero use of high-speed diesel in the power plants and higher contribution from the cheapest source – hydropower. The furnace oil (Rs. 9.03 per unit) has been replaced by domestic natural gas at  Rs. 4.49 per unit  and  liquified natural gas (...

Pakistan's Central Power Purchasing Agency's report shows that General Electric's 9HA-Class turbines produced only half of their capacity this August, according to Reuters. Power executives and government officials in the country said the GE turbines had operational issues like long outages and production delays. GE Turbine Problems: Bhikki Power Plant, Punjab, Pakistan The GE turbine problems affected three key plants – Bhikki of Punjab government and Balloki and Haveli Bahadur Shah of the federal government – with a total capacity of 3,600MW that are considered crucial to end  load shedding  within the ruling PMLN's 5-year term ending middle of 2018. Consequences For Pakistan: Pakistan's government is failing to deliver on its promise to end load-shedding this year because of serious issues with GE's 9HA-Class turbine. "It had terrible consequences because we lost a lot of power which would have come to the grid during the peak summer,"...

Pakistan joined the list of LNG importers last year and promptly became one of the world's fastest growing LNG markets, according to  Shell 2017 LNG report .  The South Asian nation has suffered a crippling  energy shortage  as demand has risen sharply to over 6 billion cubic feet per day,  far outstripping the domestic production of about 4 billion cubic feet per day. Recent LNG imports are beginning to make a dent in Pakistan's ongoing energy crisis and helping to  boost economic growth . Current global oversupply and  low LNG prices  are helping customers get better terms on contracts. Pakistan Gas Market Forecast. Source: Platts Global LNG Market: Pakistan, Egypt and Jordan together imported 13.9 million tons of LNG, more than the combined increase of 11.9 million tons by the most populous nations of China and India. The biggest increase in LNG exports in 2016 came from Australia, where exports increased by 15 MT to a total of ...

Pakistan has recently negotiated a good bargain with Qatar for importing $16 billion worth of liquified natural gas (LNG) . Pakistan will import as much as 20 million tons of the super-chilled gas annually from various sources including Qatar, enough to fuel about two-thirds of Pakistan’s power plants. Gas shortage has idled half the nation’s generators. A 75 percent drop in LNG prices since 2014 has  dramatically reduced the cost of the South Asian country’s energy needs, according to a Bloomberg report. LNG arriving in Pakistan from Qatar will fetch 13.37% of the preceding three-month average price of a Brent barrel (considering the present Brent price as a proxy, that would equate to $167.5 per 1000 cubic meters), according to a report in Azerbaijan's Trend News .  It translates to $4.50 per million BTUs. A comparison with Iran's gas deals with Turkey and Iraq indicates that Iranian gas will not be competitive with Qatari LNG on Pakistani market . In 2014 Iran was ...

LNG spot prices hit a new low of $4 per mmBTU as the supply continues to significantly outstrip demand. It's creating opportunities for Pakistan to get access to large supply of cheap fuel for its power generation. With softening demand from China and 130 million tons per year (mmpta) of additional LNG supply set to reach market over the next five years, gas research firm Wood Mackenzie sees continuing downward pressure on global LNG spot prices. LNG Price History Source: WSJ “The entire industry is worried because it is hard to tell when China’s demand will pick up again,” said an LNG strategist at a Malaysian energy company who attended the Wood Mackenzie conference in Singapore, according to Wall Street Journal . “Rising demand from smaller countries such as Pakistan, Egypt and Bangladesh is not enough to offset the declining demand from north Asia.” As recently as two years ago, LNG shipped to big North Asian countries like Japan and Korea sold at around $15 to $...