National Workshop on Moving Towards Cleaner Fuels and Vehicles in Pakistan Organized by IUCN at Marriot Hotel, Islamabad : May

19, 2010

Experience of Pakistan in Moving Towards Cleaner Fuels and Vehicles

by

Hilal A. Raza
Director General & Chief Executive Officer Hydrocarbon Development Institute of Pakistan

Compressed Natural Gas (CNG)

Pakistans major initiative in cleaner transport fuels has been the introduction of CNG to replace liquid fuels The primary motivation of introducing CNG was energy security
Also achieved co-benefits of improvement in environment and ambient air quality

Global CNG Perspective

About 10 million Natural Gas Vehicles (NGVs) worldwide in 70 countries, growing at 30% per year International Association of Natural Gas Vehicles (IANGV) envisions 50 million NGVs by 2020 Pakistan has emerged as a global leader in CNG use leaving behind Argentina and Brazil

Pakistans Experience with CNG

(1/2)

CNG as transport fuel was started as an R&D project leading to demonstration and then commercialization of an environment friendly and cheaper transport fuel

It has been a great success in diversification of the national energy mix in a short period, promoting self-reliance
The imported oil was successfully replaced with indigenous gas

Pakistans Experience with CNG

(2/2)

CNG industry developed through a home grown initiative drawing upon investment of small private entrepreneurs without recourse to any major public sector expenditure or foreign investment Government policies and incentives played a pivotal role in the recognition, appreciation, development and penetration of CNG as automotive fuel Price differential between CNG and Gasoline has been the main driver

Early Barriers to CNG

Lack of stakeholders support
Resistance to non-liquid fuels Safety concerns Lack of sites in urban areas Slow entry of oil marketing companies (OMCs)

Governments Policy Initiatives

Strong policy commitment and institutional support Development of industry friendly CNG Rules Liberal licensing for CNG retailing Maintaining differential in CNG and petrol price Free market consumer price of CNG upto year 2008 Allowing import of used equipment to kick-start the industry Exemptions in import duty and sales tax on import of CNG machinery and conversion kits

Environmental Benefits of CNG

Sulphur and lead free fuel Clean burning, smoke free emissions Cleaner air and better atmospheres Reduced emissions
CO2 - 11% CO - 50 to 90%

Nox - 35 to 60%
HC - 28%

Reduced noise pollution, esp. diesel vehicles

CNG Industry in Pakistan Today

3,000 CNG Stations; 2.5 million NGVs

Rs 150 billion investment

120,000 new jobs

In 2008-09
Petrol consumption: 1.5 million TOE CNG consumption: 2 million TOE Foreign Exchange Saving: $ 1.14 billion

Current focus on diesel oil replacement

Growth of CNG as Transport Fuel

3000 Number of CNG Stations
817 45

300 CNG Used (MMCFD) 250 200

759 42 48 197 1949 1190 155

2500 2000 1500

202

150 100

475 158 43 24

40

1000
68 31 12

62

88 5 62 7 150

12

633 67

500

835 107

355

115 142 11 218 20 360

50
0

Pakistan is the largest CNG user country of the world, now promoting to replace diesel buses for better air quality in major urban centres CNG use during previous year CNG Stations upto prev. year Addl.CNG used during current year Addl.CNG Stations in current year

Local Manufacturing of CNG Equipment

Locally manufactured CNG equipment includes conversion kits, dispensers, priority panels, compressors and various accessories Many car manufacturers producing CNGPetrol dual fuel cars Hinopak, Isuzu, Ghandhara and Daewoo have started production of dedicated CNG buses

Current Issues and Challenges

Constrained availability of natural gas
Unbridled expansion of the Industry Ignorance about safety Informal sector growth Regulatory overburden on the industry

Addressing the Issues and Challenges

Minister for Petroleum and Natural Resources has constituted a CNG Board headed by him with membership from all stakeholders
A CNG Policy is being prepared by the Government that will lay down the future road map for the CNG industry

New Initiatives for Clean Transport Fuels

LPG
Ethanol/Gasoline Blend Ethanol/Diesel Blend Hythane

LPG
Mainly used as a domestic fuel in the areas where natural gas is not available Widely used in the informal sector as transport fuel

Federal Cabinet approved LPG as transport fuel in 2006 prescribing necessary safety provisions LPG auto-fuel industry is now at the take off stage

Ethanol/Gasoline Blend (E-10)

ECC of the Cabinet approved marketing of E-10 Motor Gasoline in May 2009 Ministry of Petroleum & Natural Resources notified E-10 as petroleum product and prescribed its specifications PSO has established 21 outlets for dispensing E-10 in Sindh at Karachi (17), Hyderabad (2), Nawabshah (1) and Larkana (1)

Ethanol/Diesel Blend
Diesel oil does not blend with ethanol except

with certain additive solubilizer

In India, Karnataka State Road Transport Corporation is running 2,500 buses using a foreign patented additive Experimental and demonstration project is

being examined to work out techno-economic

feasibility

Hythane
Hythane is a blend of CNG and Hydrogen in 80:20 ratio
We are on the learning curve to understand operational parameters and project cycle including availability of hydrogen

Thank you