Pakistan braces for harsh winter as gas shortages loom

Pakistan braces for harsh winter as gas shortages loom
Internally displaced people use a boat to cross the flooded area in Dadu district, Sindh province. (AFP)
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Updated 29 September 2022

Pakistan braces for harsh winter as gas shortages loom

Pakistan braces for harsh winter as gas shortages loom
  • Domestic shortfall predicted as surging LNG prices push Pakistan out of short-term market
  • South Asian nation relies on imports through long-term contracts with Qatar and ENI

KARACHI: Pakistan is bracing for a harsh winter this year amid skyrocketing prices of liquefied natural gas on the global market and record currency depreciation at home.

Analysts are warning of increasing gas outages during peak winter hours as the south Asian country struggles to meet domestic demand.

Pakistan needs 4.1 billion cubic feet per day (bcfd) of gas, with winter demand peaking to around 4.5 bcfd against local production of 3.22 bcfd. The shortfall is bridged through LNG imports.

Pakistan began importing LNG seven years ago. However, the price of the commodity on the international spot, or short-term, market has risen from lows of $2 per million British thermal units (mmBtu) in 2020 to highs of $57 in August this year after demand in Europe surged, pushing Islamabad out of the market.

At present, the country relies on imported LNG cargoes through long-term contracts with Qatar and Italian multinational ENI. The agreements allow the country to import about eight cargoes per month, four short of the required 12 to meet the shortfall.

An official from Pakistan LNG Limited, a state-owned entity mandated to import LNG, told Arab News on Tuesday that the country is currently importing long-term cargoes from Qatar and ENI.

With the spot LNG market out of reach, many Pakistani analysts predict shortages will make the coming winter tough for domestic gas consumers.

Pakistan imported its last LNG cargo from Qatar at $17 per mmBtu under a long-term supply agreement.

“Normally the demand in winter increases by around 1 bcfd,” Farhan Mahmood, head of research at Sherman Securities, told Arab News. “As this year Pakistan is unlikely to secure cargoes from the spot market, it is expected that shortfall and load shedding of gas will be higher than last year.”

He added: “With LNG prices currently hovering around $38 per mmBtu and the Pakistani rupee trading at historic lows amid depleting forex reserves, the government may not venture to import costly gas, rather it would prefer to save dollars.”

PLL did not receive any bid in response to a tender floated in July 2022 to import 10 cargoes of LNG.

Pakistan’s woes were compounded after Russia invaded Ukraine early this year, and European countries rushed to secure gas supplies from LNG-producing countries as Moscow slowed gas flows westwards.

The Kremlin has accused the West of triggering the energy crisis by imposing the most severe sanctions in modern history, a step Russian President Vladimir Putin said is akin to a declaration of economic war.

“The Russia-Ukraine war has also disrupted the international market and European countries have rushed to secure cargoes for winter as demand has increased substantially there,” Mahmood added.

However, some experts believe gas outages will be comparatively low this winter, with additional electricity generation compensating for the high demand.

“By December this year, some 1320MW of electricity will be added to the national grid with the commissioning of three coal-fired power plants in Thar, Sindh, that will compensate the gas demand,” Tahir Abbas, head of research at Arif Habib Limited, a Karachi-based brokerage firm, told Arab News.

“There will definitely be a shortfall of gas, but it will not be as severe as last year, keeping in view the additional electricity generation.”

Pakistan’s winter policy of diverting gas supplies from the power sector to domestic consumers also affects industrial production.

This year, the government is expected to encourage consumers to switch to electricity by offering incentives to save gas for industrial and heating purposes.

In another bid to secure long-term supplies of gas, PLL has invited bids for 72 LNG cargoes from international suppliers across a six-year period. The results of the tender will be decided on Oct. 3 when the bids are opened.

Pakistan’s LNG imports fell by 3.37 percent to $629.4 million during July and August compared with the same period last year.

Energy imports increased by 105.3 percent to $23.3 billion during the last fiscal year, including LNG imports, which rose by 90.6 percent to $4.98 billion, according to official data.
 

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LONDON: Britain on Friday announced sanctions against 30 people worldwide, including Russian and Iranian officials, targeting those it deems responsible for acts of torture, sexual violence, and the violent repression of street protests.
The move came a day after France announced plans for new European Union sanctions against Iran over human rights abuses in its security crackdown on popular unrest there as well as its supply of drones to Russia before Moscow’s invasion of Ukraine.
The British government said its sanctions were coordinated with international partners to mark International Anti-Corruption Day and Global Human Rights Day. They encompassed individuals involved in activities including the torture of prisoners and the mobilization of troops to rape civilians.
“Today our sanctions go further to expose those behind the heinous violations of our most fundamental rights,” Foreign Secretary James Cleverly said in a statement.
Those sanctioned include Russian Col. Ramil Rakhmatulovich Ibatullin for his role as the commander of the 90th Tank Division, which has been involved in fighting since Russia’s invasion of Ukraine earlier this year.
The government said there have been multiple allegations made against serving members of the 90th Tank Division, including the conviction in Ukraine of a senior lieutenant on sexual abuse charges during the conflict.
Russia, which has said it is conducting a “special military operation” in Ukraine to eliminate threats to its security, has denied committing war crimes or targeting civilians.
Britain also sanctioned 10 Iranian officials connected to Iran’s prison systems. This included six people linked to the Revolutionary Courts that have been responsible for prosecuting protesters with sentences including the death penalty.
Nationwide protests that erupted after the death in police custody of 22-year-old Kurdish Iranian woman Mahsa Amini on Sept. 16 have posed one of the biggest challenges to the Islamic Republic since its establishment in 1979.
The British government sanctioned Ali Cheharmahali and Gholamreza Ziyayi, former directors of Evin prison in Tehran, which it said was a facility notorious for the mistreatment of both Iranian and foreign detainees.
The foreign office said the sanctions against 11 countries across seven sanctions regimes were the most that Britain has ever imposed in one package.
Britain also sanctioned figures involved in Myanmar’s military, which it said were involved in committing massacres, torture and rape.
Among those sanctioned by Britain were Myanmar’s Office of the Chief of Military and Security Affairs, which it said had been involved in torture since last year’s military coup, including rape and sexual violence.


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  • Moscow-Washington tensions lately soared over range of issues

MOSCOW: Russia said Friday that its ties with the United States were still in “crisis” despite a prisoner swap involving US basketball star Brittney Griner and Russian arms dealer Viktor Bout.
Tensions between Moscow and Washington have soared in recent months over a range of issues, peaking after President Vladimir Putin sent troops into pro-Western Ukraine.
“It is probably wrong to draw any hypothetical conclusions that this could be a step toward overcoming the crisis that we currently have in bilateral relations,” Kremlin spokesman Dmitry Peskov told the Izvestia newspaper.
Ties “continue to remain in a sad state,” he said, adding that talks with US authorities allowed “a Russian citizen, who was basically held captive by the Americans for 14 years... to return to his country.”
Dubbed the “Merchant of Death,” Bout was released Thursday in a prisoner swap in Abu Dhabi involving WNBA star Griner, 32, who was jailed in Russia for possessing vape cartridges with cannabis oil.
Bout, 55, was accused of arming rebels in some of the world’s bloodiest conflicts.
He was arrested in an American sting operation in Thailand in 2008, extradited to the United States and sentenced in 2012 to 25 years in prison.


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 MOSCOW: One man was killed after a massive fire on Friday destroyed a shopping mall on Moscow’s northwestern outskirts.
Authorities said the blaze at the OBI mall in Khimki outside the Russian capital was sparked by welding that apparently violated safety regulations.
The huge blaze erupted before the mall opened it’s doors to customers, engulfing the entire building of 17,000 square meters (183,000 square feet).
Officials initially said arson may have been involved, but later said it was due to unsafe welding.
A probe into the possible violation of safety rules has been launched.


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Updated 09 December 2022

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COLOMBO: Sri Lanka’s Parliament approved a budget Thursday that includes reforms aimed at improving the country’s finances as it attempts to recover from its worst economic crisis.

The 5.82 trillion rupee ($15 billion) budget includes a 43 billion rupee ($117 million) relief package for those affected by the crisis.

The budget provides for a restructuring of state-owned enterprises, reduced subsidies for electricity, and tax increases to boost state revenue based on proposals by the International Monetary Fund under a preliminary $2.9 billion bailout plan.

Unsustainable government debt, a severe balance of payments crisis and the impact of the COVID-19 pandemic led to a shortage of essentials such as fuel, medicine and food, and soaring prices have caused severe hardships for most Sri Lankans. Many have lost their jobs because businesses have become unsustainable.

The government announced in April that it was suspending repayment of nearly $7 billion in foreign debt due this year. It has since entered a preliminary agreement with the IMF, which has agreed to provide $2.9 billion over four years depending on the willingness of Sri Lanka’s creditors to restructure their loans.

Sri Lanka’s total foreign debt exceeds $51 billion, of which $28 billion has to be repaid by 2027.

The economic meltdown triggered a political crisis in which thousands of protesters stormed the official residence of the president in July, forcing then-President Gotabaya Rajapaksa to flee the country and later resign.

President Ranil Wickremesinghe, who succeeded Rajapaksa, has somewhat reduced the shortages of fuel and cooking gas, but power outages continue, along with shortages of imported medicines.


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Updated 08 December 2022

Frustration in Romania and Bulgaria after Schengen rejection

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  • Now some observers warn that both countries face a rising tide of euroscepticism as they remain outside the coveted zone
  • At Giurgiu, on the Romanian-Bulgarian border, a queue of trucks several kilometres begins forming from dawn

GIURGIU, Romania: After more than 10 years waiting to be admitted into the Schengen zone, Bulgaria and Romania were once more turned away after two EU countries vetoed their admission.
Now some observers warn that both countries face a rising tide of euroskepticism as they remain outside the coveted zone through which passport checks are not normally required.
Romanian Prime Minister Nicolae Ciuca spoke of his “profound disappointment” after Austria blocked their admission.
In Bulgaria, President Rumen Radev regretted what he described as the “internal borders” he said were being put up with the European Union bloc.
Their failure to win admission to the Schengen’s vast zone of free movement means that the long lines at various border crossings will continue.
At Giurgiu, for example, on the Romanian-Bulgarian border, a queue of trucks several kilometers begins forming from dawn.
Jaded long-haul drivers speaking to AFP in early December in Giurgiu, on the Romanian side, told of long hours waiting for the customs checks before they could enter Bulgaria.
Alexandru Birnea, 36, a long-haul driver for 13 years, said joining the Schengen zone would improve the lives of thousands of truckers.
“We would like to avoid losing all this time and therefore money in endless queues so that we can get back to our families more quickly,” he said.
But his pessimism about the outcome of the vote turned out to be well founded.
The European Commission has long expressed its wish for a widened Schengen zone.
But while tourist hotspot Croatia received the green light on Thursday, Romania and Bulgaria were left out in the cold.
Both countries joined the European Union back in 2007, before Croatia. Both countries met the technical criteria set out by Brussels.
But both countries were asked to make progress on judicial reform and anti-corruption efforts and were monitored for improvements.
When that process ended, both countries were hopeful that they had cleared the final hurdle. improvements.
But Austria hardened its stance, denouncing an influx of asylum seekers that it said could grow if the Schengen zone expanded.
“The migratory flows do not pass through Romania,” but mainly through Serbia, Romanian Interior Minister Lucian Bode argued.
He pointing to the nearly 140,000 migrants on the western Balkan route recorded by the European agency Frontex since January.
Prime Minister Ciuca said Austria’s refusal was based on “incorrect” figures.
But for political analyst Sergiu Miscoiu, Austria’s veto was more a reflection of internal political pressures, given the rise in polls of the far right there.
The Netherlands finally changed its position and gave Romania the green-light after long being opposed. But it maintained its concerns about “corruption and human rights” in Bulgaria.
Dutch Prime Minister Mark Rutte said last week that he wanted to be assured that no-one could “cross the border with a 50-euro note.”
Bulgarian Interior Minister Ivan Demerdzhiev rejected what he described as “insulting” remarks, especially given the “exceptional efforts” they had made to meet Brussels’ demands.
Bulgarian weekly magazine Capital commented: “We expect the impossible from the poorest and most corrupt country in the EU: don’t let migrants pass through (the country), but give asylum to every migrant who enters,” it remarked.
And analyst Miscoiu warned that a negative vote could “strengthen the euroskeptics, especially in Bulgaria, which has already had four elections in the past two years.”
Romanian president Klaus Iohannis also warned that rejection “might compromise European unity and cohesion, which we so need, especially in the current geopolitical context.”

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