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Capicity and Location

Diesel demand in Pakistan has surged, with HSD dispatches increasing by 25% year-on-year, while the country heavily relies on imported diesel, costing around 360 billion rupees annually. The methanol market is currently entirely reliant on imports, with local production not viable unless demand reaches 350K MT and prices drop significantly. The DME market presents an opportunity for Pakistan to reduce diesel dependency, with potential savings of over 200 billion rupees by utilizing local resources and established production technology.

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5 views

Capicity and Location

Diesel demand in Pakistan has surged, with HSD dispatches increasing by 25% year-on-year, while the country heavily relies on imported diesel, costing around 360 billion rupees annually. The methanol market is currently entirely reliant on imports, with local production not viable unless demand reaches 350K MT and prices drop significantly. The DME market presents an opportunity for Pakistan to reduce diesel dependency, with potential savings of over 200 billion rupees by utilizing local resources and established production technology.

Uploaded by

wajih9864
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© © All Rights Reserved
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Demand of Diesel:

HSD dispatches surged by 25% year-on-year, reaching 0.49 million tons in the same month. (1)
The latest value from 2022 is 139.15 thousand barrels per day, an increase from 132.73 thousand
barrels per day in 2021. In comparison, the world average is 145.67 thousand barrels per day,
based on data from 191 countries. Historically, the average for Pakistan from 1980 to 2022 is
122.99 thousand barrels per day. The minimum value, 41.37 thousand barrels per day, was
reached in 1980 while the maximum of 185 thousand barrels per day was recorded in 2017. See
the global rankings for that indicator or use the country comparator to compare trends over time.
(2)
Methanol availability in Pakistan:
1. The total market size of the industry is 150K MT currently. Methanol is being completely
imported with no local production at the moment.
2. The import price is in the range of $350 - $400 / Ton CFR.
3. Market for methanol is expected to grow with the current growth in the construction
industry but the growth rate is very slow for local production.
4. In the current market scenario, the production of methanol is not a viable option. The
demand should be a minimum of 350K MT to make any return on investment and the
market selling price should be in the range of $250 - $300/ Ton for any chance of
switching from imported to local buying. (3)

DME Market:
The global ether market size was valued at USD 9.41 billion in 2023 and is projected to grow
from USD 10.22 billion in 2024 to USD 20.32 billion by 2032, exhibiting a CAGR of 9.0%
during the forecast period. Asia Pacific dominated the dimethyl ether market with a market share
of 64.4% in 2023. (4)
If we look at Pakistan market size, Pakistan can become the big market of DME, annually 8
million tons of Diesel is consumed in Pakistan and demand of diesel is increased every year (Rao
et al., 2016). Pakistan import 60% diesel and cost of imported diesel is too high, Pakistan is the
developing country and cannot afford that high imported cost of diesel. Pakistan annually pays
360 billion rupees on importing diesel from other countries such as Saudi Arabia, Iran, Qatar,
Bahrain etc. as the result of annual consumption of diesel cost of import bill is also increased.
After 10 years the cost of diesel is increased to 600 billion rupees and after 20 years the cost on
import of diesel is reached to 1000 billion rupees. Pakistan can save over 200 billion rupees by
using DME. (5)
DME Capacity:
Our Plant production Capacity is 50000 tons per year.
Why?
 Pakistan possesses significant natural gas reserves, which can be utilized to produce
methanol, a key feedstock for DME.
 DME can diversify Pakistan's fuel mix, reducing dependence on imported fossil fuels.
 DME is a cleaner-burning fuel compared to traditional fuels like diesel and LPG.
 It significantly reduces harmful emissions, including particulate matter, sulfur oxides, and
nitrogen oxides.
 This aligns with Pakistan's commitment to reducing air pollution and improving air
quality.
 This can enhance energy security and mitigate the risks associated with fluctuating global
fuel prices.
 The technology for DME production is well-established and commercially proven.

Cite Location:
A strategic location for a DME production plant in Pakistan would be near the Thar Coalfield in
Sindh province. This region offers a unique combination of abundant natural resources and
supportive infrastructure. The presence of extensive coal reserves provides a reliable and cost-
effective feedstock for syngas production, which is a key intermediate in DME synthesis.
Additionally, the existing natural gas infrastructure in Sindh ensures a steady supply of another
crucial feedstock for methanol production.
Furthermore, the government's strong support for the development of the Thar Coalfield,
including investments in infrastructure and incentives for industries, creates a favorable
environment for setting up energy-intensive projects like DME production. This location also
offers potential for exporting DME to international markets, given its proximity to the port of
Karachi. (6)
References:
1) https://profit.pakistantoday.com.pk/2024/10/02/petroleum-product-sales-surge-20-in-
september-fueled-by-increased-demand/#:~:text=Petrol%20sales%20saw%20a
%20remarkable,an%208%25%20decline%20in%20dispatches.
2) https://www.theglobaleconomy.com/Pakistan/diesel_fuel_consumption/
3) https://ir.iba.edu.pk/research-projects-mba/256/
4) https://www.fortunebusinessinsights.com/dimethyl-ether-market-104309
5) https://www.tehqeeqat.com/downloadpdf/2038
6) https://file.pide.org.pk/pdfpideresearch/kb-103-local-coal-for-power-generation-in-
pakistan.pdf

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