Experts oppose expansion of gas, LNG infrastructure in Pakistan

Our Correspondent
Thursday, Jun 23, 2022

KARACHI: International and local experts raised alarm on expansion of gas and LNG infrastructure in Pakistan in a webinar on Wednesday, saying it would pose threat to Paris Agreement goals and lead to a climate change crisis in the country.

Discussing findings of a research study by Recourse, a Netherlands-based non-profit organisation, experts urged the World Bank and International Finance Corporation (IFC) to stop investing in costly LNG imports and gas expansion and support Pakistani government to use its own indigenous, sustainable, and renewable sources of energy such as wind and solar.

The research study, titled ‘The Trouble with Gas in Pakistan: How the World Bank’s support for fossil gas has imperiled Pakistan’s transition to clean energy’ was launched in the webinar. It was organised by Alliance for Climate Justice and Clean Energy, a coalition of civil society organisations working on energy transition in Pakistan.

“The Work Bank and IFC continue to support gas and LNG expansion in Pakistan, leading the country to another unsustainable fuel-based energy model that is likely to lead to stranded assets,” said Fran Witt, senior consultant at Recourse.

“This is diverting much-needed funds away from investments in sustainable renewable energy,” she added.

Witt was of the view that gas could not be considered a transition fuel to cleaner energy systems, but a carbon-intensive high emitting fossil fuel, similar to coal, potentially diverting funds away from cleaner renewable alternatives.

Referring to proposed construction of an LNG terminal by Tabeer LNG Ltd. in Port Qasim, Abdul Rafay, Associate at Alternative Law Collective, said expanding gas infrastructures pose a costly threat to biodiversity and marine life. Mangroves, which are already in severe distress owing to unchecked industrial excesses in the area would be affected more, he added.

“The feasibility evaluation of these projects inevitably fails to factor in dangers to the environment posed by methane leaks and the cost needed to mitigate them,” he said.

Rafay was of the view that LNG floating units impede traditional fishing routes for local fishing communities, causing destruction to their livelihood.

“The outdated environmental impact assessment omits crucial details of the project and provides no clarity on why it has been allowed despite human settlements within a 4km radius.”

Haneea Isaad, Energy Finance Analyst at Institute for Energy Economics and Financial Analysis, a US-based think tank, said, “Pakistan’s inability to service fuel-related debt amidst rising fuel prices and a severely weakening rupee has not only led to fuel shortages in the power sector, but has also given rise to widespread load-shedding and rising energy bills.”

Isaad pointed out that Pakistan procures almost 44 percent of its LNG on the spot market, where recent volatility has led to the country procuring fuel upwards of $30/mmbtu, a cost that is directly transferred to the consumers, she added.

Average cost of electricity in the country has risen to Rs25/KWh from Rs15/KWh with no relief in sight for poor, she stated.

Isaad went on saying that the industrial sector face gas shortages, whereas rising costs lead to narrower profit margins. The current situation could have been avoided had the government diversified the energy supply by incorporating a higher share of renewables in the energy mix, she said.