The LNG trilemma.

Recent debates in Pakistan over imported liquefied natural gas (LNG) have remained mostly political rather than professional. Unfortunately, energy czars like Shahid Khaqan Abbasi and Nadeem Babar focused on political point-scoring instead of finding solutions.

In fact, Pakistan has operated its gas system inefficiently and burnt its scarce molecules rather recklessly for decades. Energy issues remain more basic in nature like the risk of continued shortages, lack of reliability, affordability of gas and sustainability of economic growth largely fuelled by energy. Simply put, we've an energy trilemma at hand: security, sustainability and affordability.

Gas has been the backbone of the energy sector. However, indigenous sources of supply have not grown proportionate to demand. The recent addition of LNG has transitioned the gas sector from an enclosed self-sufficient market to one exposed to the realities of the global market. The shift has been abrupt and will change the way we operate the gas industry for years to come.

The focus on market liberalisation is not a new one. Open access markets will be influenced by multiple stakeholders like local gas producers, gas pipeline companies, gas importers, licensed gas marketing companies and so on. The dynamics of the gas industry will change fast. The government will have to take steps now to ensure a smooth transition to a more globally influenced marketplace similar to our experiences of the oil industry.

Competition from the private sector will help the government move away from providing subsidies to the mature textile and manufacturing industries

At present, Pakistan produces around four billion cubic feet per day (bcfd) of indigenous natural gas and has an extensive gas network of over 12,971km transmission, 139,827km distribution and 37,058km services gas pipelines to cater to the requirement of more than 9.6 million consumers across the country.

Natural gas constitutes 43 per cent of the country's energy needs, but shortages have become pronounced for almost a decade as domestic production has not kept pace with growing demand. This shortfall is brought about by a combination of depleting indigenous reserves and increasing demand. Due to rising demand from various sectors of the economy, particularly power, domestic, fertiliser, captive power and industry, the supplies are not sufficient enough. The demand-supply gap during 2018-19 was 1.44bcfd, which is expected to rise to 3.68bcfd by...