The Economic Co-ordination Committee (ECC) of the Cabinet has given formal approval of gas allocation of 429 MMCFD from 8 new gas fields to SSGCL and SNGPL. The ECC met here on Tuesday under the chairmanship of Federal Minister for Petroleum and Privatisation Syed Naveed Qamar.
The ECC also allowed Ministry of Petroleum and Natural Resources to continue allocating extended well testing (EWP) gas to either SNGPL or SSGCL on merit to avoid any flaring or avoidable delay in the development of respective fields. Petroleum Ministry, in its report submitted to ECC stated that out of 8 fields in question, provisional allocation was made in respect of 4 fields only, while from the 5th field OGDCL had been supplying gas on their own without seeking any prior approval. For the remaining 3 fields, fresh allocation was proposed.
Following facts were submitted for consideration of the ECC in respect of provisional allocation of gas of four wells namely Latif, Tajjal, Adam and Haseeb. In accordance with the Pakistan Petroleum (Exploration & Production) Rules, the gas producers, with the approval of Directorate General Petroleum Concession, will undertake Extended Well Testing (EWT) for a limited period during the appraisal phase and before declaration of commercially to evaluate gas reservoir behaviour.
During this testing period, gas will be produced with uncertain volume, which is either flared or injected into nearest gas network. Best efforts will be made to avoid flaring. The allocation to a specific gas company, ie SSGCL or SNGPL, is invariably proposed keeping in view the nearest infrastructure availability and to avoid any further increase in gas prices.
The need for provisional allocation also arises from the fact that the producers have to get their Gas Sales Agreement (GSA) and Gas Pricing Agreement (GPA) executed, which is a prerequisite of the supply chain. Approvals of the said agreements also take time, therefore, provisional allocations are made in parallel to cut down the timings.
Instead of laying dedicated pipelines which would have resulted in higher gas price for consumers, in the instant case, the gas allocation from the fields located in the southern part of the country have been proposed for allocation to SNGPL through swap arrangement with SSGC.
According to the report, provisional allocation of two fields, ie Tajjal I and Latif I were made by the then Additional Secretary Incharge on November, 26, 2008 and their gas volumes were included in the overall supply chain of the natural gas load management programme of 2008-09 approved by the ECC on December 2, 2008.
The provisional allocations of Adam I and Haseeb I were also made accordingly on January 27, 2009. Gas supply from these fields is expected by the end of October 2009. According to the ministry, it is considered that the provisional allocations of EWT fields was a prudent decision which helped availability of desperately needed additional gas and reduction of lead-time for upcoming fields, therefore, the said decision needs to be appreciated rather than criticised.
The 5th field, where post facto approval was solicited is Noorai Jagir of OGDCL, which had commenced gas supplies on their own to SSGC from September 20, 2005. On taking up the matter with OGDCL, the latter informed on August 12, 2009 that as per GSA they were obliged to supply 10 MMCFD of Daru gas to SSGC. However, the production of Daru in 2005 dropped to 4 MMCFD, hence they diverted the supply of 6 MMCFD of gas from Noorai Jagir to SSGC as a compensation to the Daru field GSA.
After the explanation, Petroleum Ministry has proposed following allocation:
(i) up to 15 MMCFD gas from Adam X-1 Well, Hala Block to SSGCL;
(ii) upto 28 MMCFD gas from Haseeb Well-I, Yasin Block to SSGCL;
(iii) up to 25 MMCFD gas from Latif Well to SSGCL;
(iv) upto 50 MMCFD gas from Mehar Field to SSGCL;
(v) upto 250 MMCFD gas from Pasakhi/ Kunnar fields to SSGCL;
(vi) upto 6 MMCFD gas from Noorai Jagir field to SSGCL;
(vii) upto 25 MMCFD gas from Tajjal Well, Gambat Block may be allocated to SNGPL; and;
(viii) upto 30 MMCFD gas from Saqib-1 A, Mubarak Block may be allocated to SNGPL.
"Petroleum Ministry has proposed allocation of gas to SSGCL system to avoid unnecessary laying of transmission line for SNGPL, where the deficit is more than the South. It has also been agreed between SNGPL and SSGC that 50 percent of the additional volumes, ie up to 187 MMCFD may be given to SNGPL through swap arrangements," the sources continued. In addition to the above, gas allocation from two new wells ie Mamikhel-I and Koonj-I are to be made as under:-
TAL BLOCK, MAMIKHEL-I WELL TAL Joint Venture operated by MOL in addition to existing Makori and Manzalai discoveries discovered gas from Mamikhel-1 Well. The EWT of the said well for a period of 18 months has been approved. MOL has requested for allocation of 20 MMCFD gas to SNGPL,Sukkur Block Koonj Well-I
Sukkur Joint Venture comprising of Mari Gas Company Limited (MGCL), Petroleum Exploration Limited and Sovereign Energy Limited have discovered gas at Koonj Well-I located north-east of District Sukkur, Sindh. The EWT of said well for a period of 12 months has been approved. During EWT period, Koonj Well-I is expected to produce 10 MMCFD gas. MGCL has requested for allocation of this gas volume to SNGPL.
The gas allocation from two new sources ie up to 20 MMCFD gas from Mamikhel-1 Well, TAL Block may be allocated to SNGPL and up to 10 MMCFD gas from Koonj Well-i, Sukkur Block will be allocated to SNGPL. Petroleum Ministry is of the view that its explanation in respect of the provisional allocations made for the 5 fields maybe in light of the ECC decision. It has also been proposed that Petroleum Ministry should be allowed to continue allocating EWT gas to either of the gas utility company on merit, to avoid any flaring or avoidable delay.
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