New E&P blocks to yield results in 3-5 years

ISLAMABAD: New oil and gas exploration blocks in the country are expected to yield results in three to five years, petroleum ministry officials said on Wednesday.

Government under the Petroleum Policy 2012 offered incentives for exploration of oil and gas in the country. The new bidding round for award of 20 oil and gas exploration blocks in Pakistan is anticipated to attract local and foreign investments, which will also pave way for new oil and gas finds within the country, according to the officials. However, this increased E&P activity will yield results in 3-5 years, they said during a seminar.

The petroleum division organised the seminar to discuss gas supply options, financial sustainability and weighted average cost of gas, gas infrastructure development needs and open access regime, said a statement.

Government is pursuing the transnational pipeline projects. As a fast track option, the government is to develop more LNG terminals without government guarantees and allow open access arrangements for LNG importers, marketers and consumers to benefit.

“Government is accelerating the private imports and building new trunk pipeline which are essential to have infrastructure to import more as per the gas demand,” said the statement.

Demand for natural gas grew substantially over the last decade from 2,000 million metric cubic feet per day (mmcfd) to 4,000 mmcfd.

The shortage necessitated gas load management across the country and gas consumers in all sectors experienced varied levels of gas load shedding.

Sui Northern Gas Pipelines could not provide natural gas to industry, fertiliser and power plants and CNG stations for over 7 months in a year and over 50 percent of domestic consumers could not be reliably provided natural gas for cooking and heating purposes from November to February.

The officials said the gas producing provinces are anticipated to witness the depletion in indigenous gas production in coming years until and unless bigger new gas finds are encountered.

During the last decade, there was an issue of gas load management within the gas producing provinces as the domestic gas depleted. The interpretation of Article 158 and implementation at practical grounds remained under debate at the Council of Common Interests (CCI) levels and courts.

Earlier this month, the federal government highlighted the circumstances related to depletion of indigenous gas resources and issues of increasing demand, gas tariffs and import of LNG.

The CCI directed the officials to hold seminars to deliberate on the issues and on the basis of recommendations to come up with way forward on the matter in consultation with provinces in subsequent meeting of CCI.