Proficiency of food security and oil, gas must be improved.

Byline: Tauqeer Hassan Khan

Pakistan is an agrarian economy, which places great emphasis on national food security and self-sufficiency in grain production. With fast rising population, it has become increasingly important to improve crop yields through improved farm economics and production efficiencies.

Although fertilizer input is only one of the many factors that influences crop yields and food prices, it is still an important one. Other factors of equal, if not more, importance are seed quality, farming practices, water availability and weather conditions. Nevertheless, synthetic fertilizer has a very prominent role in feeding and sustaining the world's 7.7 billion people. Synthetic fertilizers, especially Urea, DAP, NP, NPK, CAN etc. are produced by converting a fossil fuel based feedstock into ammonia using the Haber Process. The main feedstock used to produce fertilizer in Pakistan is natural gas.

Every year, approximately 8-9 million metric tons of fertilizer is consumed by Pakistan's farmers, out of which 7.5 million metric tons is produced indigenously. The fertilizer sector consumes approximately 250,000 MMSCF natural gas every year (17% of total natural gas consumption). Therefore, making natural gas effectively a lifeline to sustain the country's economy as well as feed its growing population. 80% of this feedstock is coming from one natural gas field (not on network), which is continuously depleting. Addition of natural gas consumers (non-fertilizer) has resulted in further accelerating the fast depletion of this reservoir. As the reservoir approaches its end of life, great uncertainty awaits the food and agriculture sector in Pakistan.

Network based fertilizer plants not only face seasonal outages due to lack of supply, but some plants also require heavy subsidies against the expensive imported RLNG to compete in the local fertilizer market. After the government's recent decision to reduce the GIDC at a token value - yet to be notified, indigenous feed gas would be available at about 0.7-2.0USD/MMBTU. It is expected that if fertilizer manufacturing is entirely shifted to RLNG, which is available at about 10-11USD /MMBTU, fertilizer prices would sky-rocket and Pakistan's self-sufficiency in even grain production would be gravely threatened.

In the past 02 decades, industrial and transport natural gas consumption has increased significantly, driving Pakistan's economy upwards. Unfortunately, addition of new reserves and EandP...