Promote LNG, LPG to end power crisis
Azhar Bukhari discusses energy sector opportunities with Chairman Associated Group (AG) Iqbal Z. Ahmed
Iqbal says Pakistan has potential to achieve energy independence if govt focuses on out-of-box solutions
By Azhar Bukhari
To overcome the energy crisis, the federal government should be encouraged to take daring steps, in good faith, and then let the chips fall where they may. This was the upshot of the discussion that took place with Associated Group (AG) Chairman Iqbal Z. Ahmed at its office in Lahore.
A quite cool and calm Iqbal, who has command on energy-related issues being faced by the country, spoke at length on the energy crisis. He strongly believes that creating jobs and economic opportunities are an effective way to combat militancy. “Creating and providing employment will prevent alienation and give people a reason to ensure that the system runs smoothly,” said Iqbal. “Pakistan has the potential to achieve energy independence, but this requires focusing on out-of-box solutions and facilitating local and foreign investors by providing more incentives,” he said.
The energy landscape in Pakistan is evolving quickly against a background of fluctuating energy prices and significant supply shortages. The country’s industrial and population growth rates have led to forecasts that Pakistan’s energy demand over the next 15 years may grow at a rate of between 4.4% to 6.1% per annum, resulting in a large and growing energy deficit particularly in the power sector, he maintained.
Elaborating on possible solutions, Iqbal said that part of the answer lay in better utilizing Liquefied Petroleum Gas (LPG), Liquefied Natural Gas (LNG) and Pakistan’s indigenous coal reserves. He said Pakistan has the potential to almost double its local LPG production and attract billions of dollars in foreign investment. “This substantial, additional local LPG production is being held hostage to frivolous litigation,” said Iqbal. He said that the Iran-Pakistan natural gas pipeline and the two LNG import terminals, including the one being set up by his company, would help narrow the gap between gas demand and supply, but would not eliminate it. “The Gas Management Policy 2005, which causes industries to close down during winter months, is a deeply flawed policy and needs an extensive overhauling,” said Iqbal. Of coal, Iqbal said that Pakistan has the seventh largest coal reserves in the world, yet not a single example of a coal-fired power plant that is a going concern. “Compared to India, the contribution of coal to energy mix is almost negligible,” he said, adding that utilization of coal has been talked about by several governments but has not yielded concrete results.
He strongly criticized theories which are presented to the government citing alternate resources as high-cost ventures and a hard task to achieve. He said that the import of fossil fuels was taking a large chunk of the country’s revenues and resulting in an increasing trade deficit. Statistics indicate that Pakistan’s continued reliance on fossil fuels to meet a significant portion of its primary energy demand has made the situation critical in a carbon-constrained future. In this context, policymaking requires new strategic thinking in terms of the energy mix, Iqbal said. “All political parties could sign off on a comprehensive energy plan after due consultations with stakeholders and then hold this plan as sacrosanct,” he said. “We’ve seen an unprecedented degree of cooperation between the government and opposition, and there is no reason why such cooperation cannot be extended to the energy sector.”
He said that Pakistan offered high returns on investment and this was the reason that foreign companies were investing their capital and resources in the country, particularly in the energy sector. “The fact that the economy was largely impervious to the social turmoil of the last few years is evidence of the fact that our economy is far more resilient than we like to think,” said Iqbal. “There is nothing worse than Pakistanis talking down their economy and their country, which then becomes a self-fulfilling prophecy.” He said there was a mighty disconnect between the perception and reality of Pakistan as a place to do business in. “We have our problems, but we are better off than many, many countries,” said Iqbal, adding that criticism of Pakistan’s economy, society and government should only be done on facts.
In order to promote LPG as a safe and economical automobile fuel, the Government of Pakistan deregulated the sector in 2000 to attract investment and give the LPG market a much-needed boost. It worked. Since then, the number of LPG marketing companies shot up 250% resulting in brisk competition, the sector attracted over US$200 million in investments, and an estimated 30,000 jobs were created. He said LPG is currently being used as an automotive fuel as well as in households and industries. “LPG is the very definition of a multipurpose fuel,” said Iqbal.
He said AG has set up Pakistan’s first LPG Autogas Station to retail product to motorists in a safe and professional manner. However, he said that the license to commence operations and provide affordable product to end-users was still pending with the regulator. “LPG is being used as an automotive fuel in 10 million cars worldwide, including in the US and UK,” said Iqbal. “This is the quickest way to eliminate illegal LPG decanting and encourage use of a highly environment-friendly fuel.” He said that delays at the licensing stage were discouraging local and foreign investors from a very promising market segment. “We are wasting opportunities here and sending the wrong message at a very critical time for the economy,” he said.
Profile
Iqbal Z. Ahmed is the Chairman of Associated Group (AG), which was founded by Mr. Z.Z. Ahmed (1910-1989), former DIG Police, in 1965. At present, it is one of Pakistan’s premier business houses in the energy sector.
Its flagship company Jamshoro Joint Venture Ltd (JJVL) commenced commercial operations in March 2005. In late 2007, AG installed and commissioned its 136MW Bhikhi Power Plant in District Sheikhupura. AG’s Power Division is developing innovative and results-oriented plans to enhance Pakistan’s installed electricity capacity. AG has won the rights to set up a 192MW power plant at Multan and an 110MW power plant at Guddu.
To overcome the energy crisis, the federal government should be encouraged to take daring steps, in good faith, and then let the chips fall where they may. This was the upshot of the discussion that took place with Associated Group (AG) Chairman Iqbal Z. Ahmed at its office in Lahore.
A quite cool and calm Iqbal, who has command on energy-related issues being faced by the country, spoke at length on the energy crisis. He strongly believes that creating jobs and economic opportunities are an effective way to combat militancy. “Creating and providing employment will prevent alienation and give people a reason to ensure that the system runs smoothly,” said Iqbal. “Pakistan has the potential to achieve energy independence, but this requires focusing on out-of-box solutions and facilitating local and foreign investors by providing more incentives,” he said.
The energy landscape in Pakistan is evolving quickly against a background of fluctuating energy prices and significant supply shortages. The country’s industrial and population growth rates have led to forecasts that Pakistan’s energy demand over the next 15 years may grow at a rate of between 4.4% to 6.1% per annum, resulting in a large and growing energy deficit particularly in the power sector, he maintained.
Elaborating on possible solutions, Iqbal said that part of the answer lay in better utilizing Liquefied Petroleum Gas (LPG), Liquefied Natural Gas (LNG) and Pakistan’s indigenous coal reserves. He said Pakistan has the potential to almost double its local LPG production and attract billions of dollars in foreign investment. “This substantial, additional local LPG production is being held hostage to frivolous litigation,” said Iqbal. He said that the Iran-Pakistan natural gas pipeline and the two LNG import terminals, including the one being set up by his company, would help narrow the gap between gas demand and supply, but would not eliminate it. “The Gas Management Policy 2005, which causes industries to close down during winter months, is a deeply flawed policy and needs an extensive overhauling,” said Iqbal. Of coal, Iqbal said that Pakistan has the seventh largest coal reserves in the world, yet not a single example of a coal-fired power plant that is a going concern. “Compared to India, the contribution of coal to energy mix is almost negligible,” he said, adding that utilization of coal has been talked about by several governments but has not yielded concrete results.
He strongly criticized theories which are presented to the government citing alternate resources as high-cost ventures and a hard task to achieve. He said that the import of fossil fuels was taking a large chunk of the country’s revenues and resulting in an increasing trade deficit. Statistics indicate that Pakistan’s continued reliance on fossil fuels to meet a significant portion of its primary energy demand has made the situation critical in a carbon-constrained future. In this context, policymaking requires new strategic thinking in terms of the energy mix, Iqbal said. “All political parties could sign off on a comprehensive energy plan after due consultations with stakeholders and then hold this plan as sacrosanct,” he said. “We’ve seen an unprecedented degree of cooperation between the government and opposition, and there is no reason why such cooperation cannot be extended to the energy sector.”
He said that Pakistan offered high returns on investment and this was the reason that foreign companies were investing their capital and resources in the country, particularly in the energy sector. “The fact that the economy was largely impervious to the social turmoil of the last few years is evidence of the fact that our economy is far more resilient than we like to think,” said Iqbal. “There is nothing worse than Pakistanis talking down their economy and their country, which then becomes a self-fulfilling prophecy.” He said there was a mighty disconnect between the perception and reality of Pakistan as a place to do business in. “We have our problems, but we are better off than many, many countries,” said Iqbal, adding that criticism of Pakistan’s economy, society and government should only be done on facts.
In order to promote LPG as a safe and economical automobile fuel, the Government of Pakistan deregulated the sector in 2000 to attract investment and give the LPG market a much-needed boost. It worked. Since then, the number of LPG marketing companies shot up 250% resulting in brisk competition, the sector attracted over US$200 million in investments, and an estimated 30,000 jobs were created. He said LPG is currently being used as an automotive fuel as well as in households and industries. “LPG is the very definition of a multipurpose fuel,” said Iqbal.
He said AG has set up Pakistan’s first LPG Autogas Station to retail product to motorists in a safe and professional manner. However, he said that the license to commence operations and provide affordable product to end-users was still pending with the regulator. “LPG is being used as an automotive fuel in 10 million cars worldwide, including in the US and UK,” said Iqbal. “This is the quickest way to eliminate illegal LPG decanting and encourage use of a highly environment-friendly fuel.” He said that delays at the licensing stage were discouraging local and foreign investors from a very promising market segment. “We are wasting opportunities here and sending the wrong message at a very critical time for the economy,” he said.
Profile
Iqbal Z. Ahmed is the Chairman of Associated Group (AG), which was founded by Mr. Z.Z. Ahmed (1910-1989), former DIG Police, in 1965. At present, it is one of Pakistan’s premier business houses in the energy sector.
Its flagship company Jamshoro Joint Venture Ltd (JJVL) commenced commercial operations in March 2005. In late 2007, AG installed and commissioned its 136MW Bhikhi Power Plant in District Sheikhupura. AG’s Power Division is developing innovative and results-oriented plans to enhance Pakistan’s installed electricity capacity. AG has won the rights to set up a 192MW power plant at Multan and an 110MW power plant at Guddu.
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