LPG MARKET ANALYSIS:

To meet the growing demand, the country’s dependence om imported energy

products has increased by 5 percent during the last 4 years. The Pakistan energy
book year 2008, released by Hydro Carbon Development Institute, showed that the
shared on imported energy has risen to 35 percent in 2008 against 30 percent in
2004.

The share of LPG in energy consumption has only 1.5 percent. The demand of LPG
has increased by 14 percent in the last six years. Since the local production of LPG
has progressed at the rate of just 9 percent, therefore arose the need to enhance
imports to meet the domestic requirements.

Source 02~03 03~04 04~05 05~06 06~07 07~08

Field Plants 149,657 154,903 192,533 344,875 370,804 363,03

6

Imports 18,000 35,000 40,492 24,779 65,590 23,765

Total 372,701 415,302 452,508 582,628 648,572 601,59

2

Annual 4.24% 11.43% 8.96% 28.76% 11.32% -7.24%

Growth Rate
(%)

LPG Consumption by Sector:

Sector 02~03 03~04 04~05 05~06 06~07 07~08

Domestic 262,973 280,725 313,054 384,603 405,683 371,37

1

Commercial 52,493 56,506 103,231 164,418 190,721 192,60

4

Others 10,596 14,345 29,398 11,993 9,039

Total 326,062 351,576 416,285 578,419 608,397 573,01

4

LPG Demand Projection:

Year FY09 FY10 FY11 FY12 FY13

Potential 1,181 1,275 1,332 1,359 1,482
Demand

Market 656 700 671 971 1,080

Consumptio
n

Demand in
Thousand Ton

LPG – A BETTER FUEL THAN CNG

LPG Producers are suggesting the government to stop issuing CNG License for
compresses natural gas (CNG) filling stations and instead LPG in domestic ,
commercial and automobile market. Although government has slowed down this
process, there is a need to completely ban CNG license as natural gas reserves
were depleting.

Since the import of natural gas I very expensive and is not viable where as LPG can
be imported within a short span of time. Instead of supplying natural gas to CNG
stations, the government is planning to ensure the gas is provided to industrial
sector. Which are generating revenues and producing export surplus for the
country. Proving cheaper fuel will enable industries to complete international
markets and boost their exports, resulting in generating more revenue for the
country. In last winter, many industries had to shut down their plants due to non-
supply of natural gas. This non-supply of natural gas has resulted in closure of many
power plants and industries. LPG and CNG are both viable fuels with varying levels
of infrastructure. Following chart is showing the comparison between CNG and LPG
because of which energy consultants are expecting more rapid growth of LPG sector
as compared to CNG and now OGRA is on process of finalizing the commercial part
of LPG atuo station.

Parameter CNG LPG

s
Emissions Average 70% lesser petrol/diesel Average 90% lesser than
 petrol/diesel
Power Reduces by about 20% as gas Almost same as
carburetors are often used petrol/diesel vehicles
Large tanks average 6 times that of
Volume of petrol/diesel for same mileage:
Fuel Tank Same as petrol/diesel
additional weight and eats up boot
space
Conversion Taxi/Car: PKR 6,000 ~ 14,
Cost Taxi/Car: PKR 25,000 ~ 45, 000
000
Safety 200 ~ 245 bar, high pressure can be 5-7 bar, comparable to
a safety concern conventional fuel
Requires special equipment. A
Dispensing compressor alone cost PKR 20 Million Average LPG station cost
and a complete station could cost up PKR 4.5 Million
to 30 Million
Distribution & Easily transported by road
Transportatio Dependent on pipe line networks tanker equipment with
n PTO like liquid fuel
Network Heavily dependent on SN pipe line Easy to develop, lead time
Development networks, lead time is high is 5-6 months
Initial Average USD 250,000 and upwards
investment in for just a dispensing station with Average USD 65, 000
infrastructure compressor of suitable capacity
Global
Experience 5.0 Million Vehicles 10.0 Million Vehicles