U.S. and Pakistan Discuss Energy Sector Reform

Islamabad: U.S. Special Envoy and Coordinator for International Energy Affairs Ambassador Carlos Pascual was in Islamabad on Friday as head of the U.S. delegation at the fourth U.S.-Pakistan Energy Working Group meeting. Secretary of Water and Power Nargis Sethi and Secretary of Petroleum and Natural Resources Dr. Waqar Masood Khan co-chaired the annual Energy Working Group meeting.

The Energy Working Group meeting is part of an ongoing bilateral dialogue to help address Pakistan’s energy sector challenges, including power generation, fuel, gas, and reform priorities. At the conclusion of the meeting, the three officials announced that the United States government will fund an international consultancy to assist Pakistan in acquiring liquefied natural gas (LNG).

Secretary of Water and Power Sethi highlighted the need for an improved and sustained governance structure as a key element for a sustainable power sector and the steps taken so far. Special Envoy Pascual welcomed the Pakistani government’s commitment to the reform process, improving governance, improving the financial viability and efficiency of the power sector and energy sector in general, and attracting private sector investment in energy production and distribution. The Secretary of Water and Power expressed her appreciation for U.S. assistance under the power distribution improvement project and the energy efficiency programs.

Special Envoy Pascual also welcomed Pakistan’s adoption of the 2012 Petroleum Exploration & Production Policy, noting that it that has the potential to spur investment in exploration throughout Pakistan. Secretary Khan pointed out the imminent Pakistani oil and gas delegation meetings in Houston and London to promote the auction of licenses for 60 blocks (or exploration zones).

“Today, the United States government and the Government of Pakistan launched a new initiative to help Pakistan acquire liquefied natural gas more efficiently,” said Ambassador Pascual at the working group, “This initiative shows the United States and Pakistan working together on concrete actions to relieve Pakistan’s chronic shortage of electricity. It will accelerate the liquefied natural gas procurement process and offer a cheaper alternative to Pakistan’s current fuel oil imports.”

The LNG consultancy, which will commence work before the end of the year, will assist the Government of Pakistan in the terms and assessment of liquefied natural gas supply and delivery from international suppliers. The effort will speed the procurement process, saving the government the expense of fuel oil imports that are currently used to generate much of the nation’s electricity. The consultancy will also provide market analysis and technical assistance to the government’s implementer of LNG imports.
Beyond today’s agreement, the United States and Pakistan together are carrying out large-scale energy projects, that will add 900 megawatts of capacity to the power grid by the end of next year — enough to supply electricity to an estimated 2 million households. These projects include renovating the power plant at the Tarbela Dam; modernizing the generators at the Mangla Dam; upgrading the Guddu, Jamshoro and Muzaffargarh power plants; and building the Satpara and Gomal Zam dams. U.S. technical assistance is also supporting crucial policy and management reforms underway in the Ministry of Water and Power. These reforms are focused both on reducing the power grid’s technical losses and on increasing collections.