OGDCL taps Pakistan’s first-ever tight gas project

ISLAMABAD: The Oil and Gas Development Company Limited (OGDCL) on Monday announced the successful start of early commercial production from Pakistan’s first-ever tight gas project at Nur West Well-1, located in Sindh’s District Sujawal.

Previously, high costs and limited technology had impeded the development of unconventional energy sources.The Nur West Well-1 is currently producing 1.5 million standard cubic feet per day (mmscfd) of gas with a wellhead flowing pressure of 1,050 PSI. The gas, sourced from the lower guru formation’s ‘A’ sand, has been seamlessly integrated into the Sui Southern Gas Company Limited (SSGCL) network. This integration is expected to enhance the national gas supply infrastructure and contribute to the stability of Pakistan’s energy supply.

Initially, conventional testing methods during the drilling phase did not yield favourable results. To overcome this challenge, OGDCL employed hydraulic fracturing, an advanced technique that proved crucial in achieving production viability. This innovative approach highlights OGDCL’s commitment to utilizing cutting-edge technologies to maximize resource potential.

OGDCL has also developed a comprehensive tight gas exploration and development roadmap, which is currently being implemented. This plan reaffirms the company’s dedication to expanding energy resources, securing national energy needs, and promoting sustainable development across Pakistan.

In early April 2024, the company announced in a notice issued to the Pakistan Stock Exchange (PSX) about this new gas reserve at its exploratory Well Nur West 1. OGDCL is 100 per cent operator of the Nur Development and Production Lease (D&PL). It drilled and tested the structure to a depth of 2,975m using its in-house expertise.

The new policy, approved by the Council of Common Interests (CCI), covers all qualifying tight gas discoveries and allows operators to sell gas at negotiated prices, with the government holding the first right of refusal.

In late January 2024, the federal government introduced the Tight Gas (Exploration & Production) Policy 2024, approved by the CCI. The policy covers all qualifying tight gas discoveries and allows operators to sell gas within Pakistan at negotiated prices, with the government holding the first right of refusal.

A senior Petroleum Division official noted that the premium pricing sets the wellhead price for tight gas at $7.5 per MMBTU, with 40 per cent in taxes and 12.5 per cent in royalties. The policy also allows operating losses to be carried forward for up to 15 years, aiming to replace expensive RLNG imports and reduce foreign exchange outflows.