1. Sanjay Kaul
The India-Pakistan Energy Mutual
Interdependence: a win-win
strategy
1. Introduction
2. The Energy predicament of Pakistan
3. Areas of India-Pakistan Energy Collaboration
a. Power
b. Renewables
i. Solar
ii. Wind
c. Coal
d. Oil & Gas
e. Pipelines
f. Low carbon Technologies
g. Energy Conservation
h. Geopolitics
4. Conclusion
5. References
Centre of
Policy
Initiatives &
Energy Studies
Chairman:
TNR Rao
Dy. Chairman:
BD Gupta
Executive Council:
Sanjay Kaul
Dr. SJ Chopra
Dr. P Diwan
Prof. GC Tewari
Strategic Analyst:
Mukul Saini

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Introduction
Since the Indus valley civilization, 5000 years ago, when people worked together to
build modern amenities like brick cities, road side drainage and multistoried houses to
present day India & Pakistan, where citizens are struggling for contemporary basic
amenities like Power, Gas & Water, history has seen a complete reversal of the times.
The successful completion of a democratic election process in Pakistan and arrival of
pro-reform veteran Nawaz Sharif presents an opportunity for the elected
representatives of the two countries to actively collaborate on ‘energy’, the most
important aspect of civilization and the guarantor of other fundamental rights of
freedom & equality.
The two neighbors have much to offer to each other. This paper presents a quick
overview of energy like Oil & Gas, Power and Renewables vis-à-vis Policy/planning,
regulatory affairs, training, technology, commodity market & trading for which India-
Pakistan can immediately work together.
The Energy predicament of Pakistan
Oil, Natural gas and Coal contribute equally to Pakistan’s energy mix. Like India,
Pakistan has limited reserves of the first two but has sixth largest reserves of coal (not
fully exploited). It is predicted that latters’ indigenous O&G reserves will be exhausted
by 2030. Gas production has already started to come down. It was to 39.2 billion cubic
metres (bcm) in 2011 from 39.6 bcm in 2010.
In Jun 2012, power shortfall reached a peak of 8,500 megawatts (MW) which was more
than 40per cent of national demand. The sector also suffers from gross inefficiencies
(including 30per cent transmission and distribution losses). The gap between revenue
and expenses has approached a whopping $ 4.5 billion. Consequently, the country
cannot afford to provide a regular supply of power.
‘Energy’ is a common subject in the purview of multiple ministries and agencies both at
state and national level. Absence of coordination and clear authority cascades the
problem.
Energy shortages have cost the country up to 4per cent of GDP over the past few years.
An estimated 400,000 jobs have been lost due to industrial load shedding. This is
deemed to worsen in future as Urban population would cross the 50 per cent mark in
mid 2020s.

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Areas of the India-Pakistan energy
collaboration
While imperfect, the 1960 Indus Water Treaty, between India and Pakistan, is an
example of the potential for consummating difficult but mutually beneficial agreements.
There are other avenues in Energy where the two nations can jointly work.
Power
Reducing power losses and framing policy & regulations is required. Pakistan is
dependent on imports for heavy power equipment and India is one of the leaders in
manufacturing them, including super critical technology based boilers and turbines up
to 800MW.India can also help in carrying out the Renovation and modernization of their
thermal, gas and hydro power plants as it costs less than almost 1/5th
of the capital cost
of a new Power Plant. India can also help Pakistan for the establishment of a national
load control center and other transmission facilities including supply of 765KV
equipment for sub-station and transmission lines.
The new plants take a long time to come up, but a quick solution could be to interlink
the power systems of the 2 countries by laying a 400KV line between Amritsar and
Lahore, a distance of about 50km and at a cost of about 50 crores (approx.). Such a
project was conceived couple of years ago but could not get implemented. Pakistan is
known to have large gas reserves & the installation of a gas based Power Plant in
Pakistan can even help India to get peaking power, if the power systems of the two
countries could be interconnected.
Renewables
Solar
Pakistan is blessed with huge power potential of more than 5-6 kwh per sq m per day of
radiation in Baluschistan followed by Eastern Sindh and South Punjab and can have
technically viable and financially feasible solar power projects. Close to 400 MW of
power load can be taken off the grid by using this.
India has the vast experience in PV system for lighting, water pumping and health
system. An indigenous industry for the manufacturing of PV cells is well established in
India and PV modules can be purchased at very reasonable price compared to the
international market. India will be ready for the transfer of technology of PV modules as
different African countries have benefited from it already. India can also provide
trainings for rural electrification using PV technology and can share its experience in this
regard.
Wind
A potential area for a joint venture is wind power plants in Punjab (Pakistan). India has
the fifth largest installed wind power capacity in the world and the associated learning

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curve with it. Similar ambient and wind conditions both in
Rajasthan in India and Thar in Pakistan allow the usage of similar turbine type. Hence,
Pakistan will greatly benefit from joint ventures in wind power.
Coal
There is Non-utilization of vast indigenous resources of Punjab (Pakistan) which is the
world’s single largest continuous Coal field extending over an area of 10,000 Sq KMs.
Phased development can lead to 400 – 600 mt /year coal mining in 20 years. All of
Pakistan’s energy requirements can be met in 2020 – 2030 scenario. India can not only
extend its learning curve in coal extraction but its western states’ thermal power plants
can become customer to Pakistan coal.
Oil & Gas
A meeting of the Experts’ Group on Trade in Petroleum and Petrochemical Products,
between India and Pakistan, held on 17-18 July 2012, in New Delhi, explored options in
the hydrocarbon value chain. Pakistan identified three fuels that it wants to import from
India initially: furnace oil, diesel and natural gas. As mentioned above, due to its severe
electricity shortage, Pakistan wanted to begin imports of these fuels from India
immediately. It wants to import diesel only after 2014, when its term contract with
Kuwait Petroleum Corporation expires.
Given the severe gas crisis in Pakistan, Islamabad also proposed imports of natural gas
from India. The Pakistani proposal was for supply through a pipeline from Jalandhar, at
market rates exclusive of transportation and other charges. For Indian gas marketing
firms, the deal is lucrative as they have idle pipeline capacity.
Earlier, the Gas Authority of India had also offered Pakistan a deal to import natural gas
from India in a plan to extend the natural gas pipeline running from the West Coast to
Bhatinda, through the Dahej-Vijaipur-Dadri-Bawana-Nangal-Bhatinda pipeline to Punjab
and into Pakistan. This needs a nod from Ministry of External Affairs before a proposal is
made from Pakistan.
Refineries close to border (Bathinda refinery: HPCL- HMEL and Indian Oil Corporation
(IOC) respectively) offered to examine the feasibility of constructing two petroleum
product pipelines; one between HMEL’s Bathinda refinery and Lahore, and the other
from IOC’s Jalandhar tap-off point to Lahore. The final decision in each case would be
subject to commercial viability and other considerations. Others are Barmer
petrochemicals and RIL Jamnagar refinery.
TAPI and IPI pipelines can connect the energy dense Caspian Sea region and Iran to
energy guzzling South Asia. Pakistan & India should swiftly work towards making them a
reality.

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Low carbon technologies
Given the inevitable dependence on coal of the economies of the region, joint
cooperation between India, Pakistan, Bangladesh, and the United States on carbon
capture and sequestration projects could be an important step in regional technical
development and could address a long term environmental concern.
Energy conservation
Energy intensity in India has declined by 20-25 per cent over the last decade with
initiatives like Smart Cities by Ministry of Urban Development, GOI would certainly go a
long way in this direction. Plans are on the paper to convert at least 70 cities into smart
cities with million plus population in India. They would entail several features like
carbon neutral status and intelligent transport. Growing urbanization in Pakistan calls
for similar action where it can work with India.
Geopolitics
The geopolitical dependencies that Pakistan has with China, Iran, Afghanistan, US,
Middle East and the internal pressures of Extremism, Army supremacy, call for a very
fine and difficult balancing act, bordering on the impossible. Nawaz Sharif’s would have
to utilize all his past experience of being in power and in the opposition for finding a
common ground to begin with.
Conclusion
Despite immense scope for intra-inter regional energy projects there has always been
inhibitions and obstacles to cooperation. The continuous failure to utilize these
opportunities by policy makers is not only tragic and represents renunciation by
leadership. Number of projects involving cross border trade in coal, hydro-electric
power, petroleum products, thermal energy, renewable energy, bilateral and regional
electric grid interconnection has the potential to be economically viable. The proposal of
three regional natural gas pipelines would be definitely beneficial for all. This in short
term would provide greater access to energy for people on both sides of the border and
a deeper sense of energy security for the two countries and would bind the two nations
by a common energy aorta.

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References
http://www.brookings.edu/~/media/press/books/2012/energyandsecurityinsouthasia/energyan
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irrelevant
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Pakistan.pdf
http://online.wsj.com/article/SB10001424052970203806504577182301242396574.html
http://www.thenews.com.pk/Todays-News-3-172328-Pak-India-investment-regime-demanded
http://www.nbr.org/research/activity.aspx?id=323#.UY9y7bVHLzw
http://www.slideshare.net/Ultraspectra00/energy-sector-pakistan
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http://propertyobserver.in/2013/01/30/then-smartphones-now-smart-cities/#=smartper
cent20citiesper cent20technologiesper cent20per cent20india