Dhok Sultan Field: Allocation of additional gas to third party approved by govt

ISLAMABAD: The Federal Government has approved allocation of additional gas from Dhok Sultan Field to a third-party through auction, official sources told Business Recorder.

Dhok Sultan X-1 well in the Dhok Sultan block is located in Jhand. M/s Pakistan Petroleum Limited was operator of this field with share of 75% and GHPL with 25% share as JV.

According to M/s Pakistan Petroleum Limited gas production from the Dhok Sultan X-1 had increased to 5.0 MMCFD and requested for an additional gas allocation to third party from Dhok Sultan X-1 during the EWT period in view of the existing infrastructure of Dhok Sultan Field, from where, 0.9 MMCFD associated gas was already being supplied to third party at a negotiated price through competitive bidding.

Ministry of Energy has approved the extension in EWT over Dhok Sultan X-l discovery till expiry of appraisal program i.e. February 28, 2021 subject to the following conditions: (i) in no event, such EWT production shall cause loss of revenues for the Government;(ii) M/s PPL will submit DoC/ Field Development Plan over said discovery before expiry of EWT production period;(iii) production taken under EWT arrangement would be accounted for cumulative, production for payment of production bonus upon commercial production. The company will not flare any gas during the said period and; (iv) it shall fulfill all its other statuary obligations like rentals, training & social welfare etc. as applicable under the lease.

Petroleum Division further noted that the gas from Dhok Sultan X-1 well has a heating value of 1269 BTU/SCF containing acidic gas upto 40 Parts Per Million (PPM) Hydrogen Sulphide (H2S) which was controlled by injection of (1125) scavenger chemical. The injection of around 5-6 MMSCFD gas in SNGPL network would require installation of a proper gas processing facility to sell on-spec gas and construction of approximately 30 - 35 km pipeline in a hilly / rugged terrain (gas injection point Dhalcni). M/s SNGPL had reported that specifications provided by the M/s PPL for the gas are not complying with OGRA's approved Natural Gas Quality Limits, hence it cannot be accepted by SNGPL without processing.

According to M/s PPL, the gas being off-specification, requiring processing and laying of approximately 35 km pipeline during EWT period also requires capital expenditure as well as lead time of 20-28 months. Therefore, considering the associated reservoir and volumetric uncertainties, M/s PPL has requested for 5.0 MMCFD gas allocation to third party from Dhok Sultan X-1 during the EWT period

Ministry of Energy proposed that upto 5.0 MMCFD gas from Dhok Sultan X-1 may be allocated to MIS PPL for sale to third party through competitive bidding in a transparent manner during EWT period or till installation of processing plant and pipeline after which the processed gas would stand allocated to SNGPL to meet its deficit in gas supply and demand. Meanwhile, M/s PPL would initiate necessary arrangements for improving the quality of gas for formal allocation to M/s SNGPL and would ensure the completion of the required arrangements well before 28 months timeline.

Copyright Business Recorder, 2020