Exploiting Natural Gas Resources

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Natural Gas, with its 49% share, is a vital element of the total energy requirements of Pakistan.

Sadly, we are resorting to the import of gas from neighboring countries at a large scale to meet the deficit instead of realizing optimal potential of the remaining recoverable indigenous reserves. Pakistan has conventional prognostic gas resources of 282trillion cubic feet (TCF).

Currently, hardly 10% of the potential is being exploited as total proven gas reserves amount to 54 TCF. At present the average production of natural gas in the country is 4,058MMCFD (million cubic feet per day), whereas demand is much higher. Resultantly, committed supplies of gas are considerably short of the growing demand. The 10-year perspective National Development Plan 2001-11 had envisaged production of an additional 928 MMCFD natural gas by the year 2010-11 taking into account development of the new gas discoveries. However, the national target could not be achieved; resulting in massive gas load-shedding experienced this winter across the country.

Gas shortfall is thus projected to increase in the range of 2200-2900 MMCFD by 2015. The successive governments have offered extremely attractive incentives and concessions to investors for development and expansion of the oil and gas sector. Nonetheless, gas production during recent years remained static, and is now declining, for a variety of factors.

There are 44 blocks consisting of 158 associated and non-associated gas-fields operated by some 16 foreign and domestic companies. Petroleum E&P (exploration and production) companies have explored natural gas from different sites in their licensed areas.

Natural gas is produced from 98 major and small gas-fields located primarily in Balochistan, Sindh and Khyber Pakhtunkhwa. Significant discoveries of hydrocarbons have been made in recent years, which include a total of 150 gas discoveries, medium and small-sized.

The major discoveries include Safed Koh Block/Salsabil Gasfield with over 3 TCF recoverable gas potential, Manazalai Gasfield with economically proven reserves of 1.88 TCF and Makori Gasfield with proven reserves of 700 BCF (billion cubic feet).

Others include Tal Block (including Mamikhel and Maramzai fields) with projected production of 320MMCFD, Sheikhan Gasfield (Kohat) with potential of 105 MMCFD gas, Kadanwari Gasfield with projected production of 60 MMCFD, Mehar (Shahdadkot) of 50 MMCFD potential, Mubarak Block with a potential of 30 MMCFD and Zin Block in Dera Bugti, which is a large reservoir with a very prospective potential.

Associated gas discoveries have also been made at Kunnar Pasahki Deep field and Jhal Magsi with 15 MMCFD potential, Nim Concession/Noorai Jagir of 6 MMCFD, whereas Manazalai gas-field has recently started production of 250MMCFD gas.

Infact, the E&P sector is in the process of developing new oil and gas fields for many years but at a very slow pace and thus several gas discoveries have remained unutilized so far.

About 500 MMCFD gas was scheduled to come into gas supply network by 2010only from the five of the newly discovered fields. Nonetheless, commissioning of gas development gathering and processing projects, like Uch-II with a potential of 160 MMCFD, Sinjhoro with a potential of 31 MMCFD.

Kunnar Psahki Deep field located in Hyderabad Sindh is expected to produce upto 250MMCFD by 2013. In the first phase however, production and supply of 100 MMCFD gas has recently commenced from Kunnar Pasahki field. On the other hand, a large number of E&P companies bought field concessions years ago but have yet to begin exploration and development activities. The place of exploration and development of gas reserves is slow, primarily for the reason that drilling activities remained behind the target.

Besides the poor security situation in the prospecting areas there has been a total lack of will on the part of the private sector. There is a constant demand of the powerful lobby of the E&P companies for higher wellhead price.

Improving the gas pricing formula has resulted in manifold increase of gas tariff to the consumers while the E&P companies made windfall profits. Net profits after tax earned by the E&P sector during the first quarter of the year 2011-12 was Rs.36 Billion compared to Rs.27 Billion during the same period last year.

It is hoped that the Petroleum Policy 2012 would be implemented by the government in letter and spirit, aiming at realizing optimal potential of remaining recoverable indigenous reserves of natural gas.

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