Tuesday, December 8, 2009

Pakistan load shedding, IPI, TAPI and what chance of change

While for many in the West the thought of fuel shortages is a “sometime” future thing, and there is enough energy supply around that there is little short term concern about, for example, having enough heat this winter. That, sadly, is not the case for many parts of the world, but in writing about them I have some caution in case I seem to be harping on the conditions in some countries, relative to the plight of others. The “Energy Shortage” website does not update information every day (looking at it on Dec 8th it was last updated on Nov 23rd) but the woes that it documents around the world consistently bear the same country names. And of these Pakistan is all too frequently at the top of the list. In the headline that day was the news that Karachi Electric Supply Company had confessed that it was load shedding customers for three hours every day. It had previously threatened to cut off power to local police stations if their power bill was not paid.

Yes this is that Karachi, Pakistan’s commercial center and also where
“Terrorists are fleeing to areas that are as far away as possible from the conflict and populated enough to hide,” Syed Mazhar Mashwani, Karachi’s senior superintendent of investigations, said in an interview. “In Karachi, they find places to shelter and it will take a couple of months to clean them out after the operation ends.”
It is apparently possibly soon to see fighting again. Yet they are having consistent problems with power supply!

Part of the problem has arisen with the need to maintain the power stations that supply the area. Two stations are currently down for “preventative maintenance” but as they return to power, they will be followed in succession by others.
the KESC has planned closure of two more units for overhauling in January for at least two months. The annual overhauling of Units 2 and 5 of the Bin Qasim plant will begin in January and continue into mid-February.

In March, the annual overhauling of Units 3 and 6 will be initiated and by the end of March all the six generation units of the plant will be available and be giving more than 900MW electricity for the next summer, said the sources.
The stations are largely powered by natural gas, which has not, locally, come down in price. For some years Pakistan has been seeking additional supplies, since they continue to come up short, and next year the anticipated shortfall is projected to be around 2 billion cu ft (BCF)/day . The hope has been for a pipeline coming from either Turkmenistan or Iran, with India being included as the customer at the end of the line in both cases. The Iranian project, which is likely to cost around $7.4 billion has had a fitful life. It has not been popular with the previous Administration because of the support that it would give Iran. It is now however, moving forward, with the Indian government sounding more positive.

Possible supply pipelines for India and Pakistan (Source EIA)

Perhaps this has been due to some pressure from Iran since they have already started the project with Pakistan with more than 60 miles of the 1,725 mile project already completed in Iran. The pipe will use 44-inch diameter tubes through Iran and Pakistan, dropping down to 36-inch in India, with a terminus in New Dehli. The target delivery is some 5.25 BCF/day, with initial supplies starting at around 1 BCF/day to both India and Pakistan scheduled initially for delivery in 2011.

In terms of Indian need this is anticipated to meet about 16% of demand, but with the possible current world glut, there are both positive and negative aspects to the deal (ppt presentation) and there is some concern that Iran does not have enough available gas to meet both this commitment and one of about 2/3 this size to the Nabucco pipeline.

The other likely source of gas (for both Pakistan and Nabucco) is Turkmenistan. That pipeline (shortened to TAPI) has had a long and varied history.
The 48-inch diameter pipeline will extend 790 miles (1,271 kilometers) from the Afghanistan-Turkmenistan border, generally follow the Herat-to-Kandahar Road through Afghanistan, cross the Pakistan border in the vicinity of Quetta, and terminate at Multan, Pakistan where it will tie into an existing pipeline system. A potential 400-mile (644 kilometers) extension from Multan to New Delhi is also under consideration. . . . Dauletabad Field is one of the largest gas fields in the world. DeGolyer & MacNaughton, an internationally recognized petroleum engineering firm, has thoroughly evaluated the field’s reserves. These evaluations clearly show that the field’s resources are adequate for project needs, assuming production rates of roughly 1.5 BCF of gas per day (15 BCM of gas per year) for 30 years or more. The Government of Turkmenistan has guaranteed deliverability of 25 TCF (709 BCM) of natural gas exclusively for this project. . . The proposed pipeline will carry natural gas at a rate of up to 2 BCF per day (20 BCM per year/700 BCF per year).
This “alternative” has also found more favor with the American Administration, since it would cut out the Iranians.

But by itself it won’t supply all of Pakistan’s needs, and while news reports continue to tout progress it is proving hard to get that final commitment from Ashgabat (the Turkmen capital). And with the pipeline running through Afghanistan before it gets to Pakistan, and with the possible withdrawal of troops from the region now being discusses, long term security concerns may slow progress yet again. And reports out of Ashgabat suggest that the West is still viewed with suspicion.

Deliveries to Iran through a new internal pipeline within Turkmenistan are supposed to start soon (feeding from the South Yolaton field) but the concern over the conflict in Afghanistan is also seen as limiting investment interest.

As that story concludes “the game continues,” (A reference to the “Great Game, ” immortalized by Kipling, between Britain (then – the West in general now) and Russia for influence in the region – particularly historically Afghanistan.) Unfortunately as it continues to play the folk in Pakistan are going to continue to be short of natural gas, which means more load shedding in Karachi.

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