Attention needed for exploration
of untapped gas reserves
By AMANULLAH BASHAR
Feb 19 - 25, 2001
To meet the growing energy demands (estimated at 8 per cent per annum),
the government seems to have opted for an easy solution of importing gas instead of
developing the available resources in the energy sector.
Official sources confirm that against the prognostic reserves of 200
Trillion Cubic Ft (TCF) only 32.5 TCF have so far been discovered in Pakistan. Pakistan
Petroleum Ltd. (PPL) made first giant gas discovery in 1952. Later on significant
discoveries of Sui, Uch, Khairpur, Mari, Kandhkot, Meyal etc followed during 50s and 60s.
Upto July 2000, only 509 exploratory wells drilled which comes to 6 wells per 10,000 sq.
km against world average of 100 wells. So far the major part of exploration was confined
to Indus Basin while the highly rich Balochistan and offshore basins are virtually
unexplored in Pakistan.
In fact Pakistan is not short of gas supply, as even the discovered
resources have not been linked up with the main distribution system. The real bottlenecks
in the energy sector are the transmission and distribution system, which is an area, which
demands for investment on a massive scale. It sound strange that instead of tapping the
available resources, the government is thinking to import gas from the neighbouring
countries like Iran, Qatar and the Central Asian States. Obviously, the import of gas
which required construction of pipelines from the originating countries would naturally
involve foreign investment at a massive scale, the prices of gas which are so far within
reach of the people would also go beyond their capacity. It is okay to lay the gas
pipeline from Iran or any other country for export to India, however import for local
consumption may have its fallbacks on our economy. Importing gas may also hurt the
interest of the foreign investors in this sector. According to Usman Aminuddin, Minister
for Petroleum and Natural Resources, China has shown interest in joining Pakistan's
options for importing gas. He said that China has recently expressed interest in joining
one of these projects and Pakistan encourages other partners also. He was of the view that
in order to meet the growing demand in future; Pakistan was working on three options of
gas import from Turkmenistan, Qatar and Iran. Qatar's joining in with the Iran pipeline
may also be a possibility, he said. These projects are open for participation by any
He said that government has adopted two pronged policy of exploiting
the national potential through aggressive oil and gas exploration and prudent use of
discovered reserves by replacing imported oil with indigenous gas. The minister has
however sought investment in the augmentation of gas transmission network that entrails
laying large diameter 800-km long gas pipelines at an estimated cost of $700-800 million.
He said that government approved the conceptual plan prepared by SNGPL and SSGC. The
government also intended to undertake the projects related to development of gas storage
infrastructure. He disclosed that the government is considering revising the onshore
policy package to incorporate more incentives for investors. The minister said that gas
accounted for almost 38 per cent of energy demand with its 33 trillion cubic feet of
commercially discovered gas reserves, whereas the potential is estimated at 200 trillion
cubic feet in Pakistan.
The pipeline network of gas consisted of 7800km of transmission lines
and 55,000 km of distribution lines supplying gas to more than three million consumers in
the country. The present production of 2.4 billion cubic feet per day which is equivalent
to 350,000 barrels a day is far less than the demand in power generation, fertilizer,
industrial, domestic and commercial consumers. This shortfall in gas supply is mainly due
to limited capacity of the existing transmission and distribution network. Even otherwise
the gas companies would be unable to induct the imported gas into the existing
distribution system unless the transmission and distribution systems are expanded. The
expansion in this mechanism naturally demands for more investment whether from local or
The government was however expecting to add 1 billion cubic feet gas
per day after signing a gas pricing structure agreement with multinational companies for
newly discovered gas fields. The first new field Zamzama will come into production from
next month. The new gas fields would enable the government to convert oil-run power
generation to gas, which would be naturally less expensive when compared to oil.
It is a matter of great satisfaction that a major part of power
generation is likely to be switched over from oil to locally produced gas that would
certainly bring down the power generation cost. The power consumers in Pakistan are liable
to pay exorbitant charges of power consumption to WAPDA and KESC. People in Pakistan are
rightfully attaching hopes that electricity charges would certainly comedown to an
affordable level as a result of switching to indigenous fuel i.e. natural gas.