Developing unconventional natural gas resources

With rising energy demands and dwindling conventional natural gas reserves, Pakistan faces a pressing energy security challenge.

The country’s potential for unconventional natural gas resources, such as shale gas and tight gas, has garnered increasing attention in recent years.

Discoveries of substantial deposits of these resources have fueled optimism for Pakistan’s energy future. However, tapping into these unconventional reserves presents both opportunities and challenges that Pakistan must navigate with caution.**

Shale gas and tight gas are unconventional natural gas types distinguished by the geological formations in which they are found and the specific methods required for extraction.

Shale gas exists within fine-grained sedimentary rocks known as shale formations, which exhibit very low permeability, trapping the gas within tiny pores.

Tight gas, on the other hand, is located in denser sandstone or limestone formations with similarly low permeability, making the gas difficult to flow naturally to the surface. Both resources require advanced extraction techniques, such as hydraulic fracturing (fracking) and horizontal drilling, to be commercially viable.

Globally, the potential for shale and tight gas is substantial. The estimated 7,299 trillion cubic feet (tcf) of shale gas and 345 billion barrels of shale oil account for 32 percent of the world’s natural gas and 10 percent of its crude oil reserves.

Pakistan ranks 19th out of 41 countries with shale hydrocarbon reserves, boasting an estimated 105 tcf of shale gas and 9 billion barrels of shale oil.

A subsequent study by the US Energy Information Administration (EIA) inferred that Pakistan possesses 586 tcf of shale gas and 58 billion barrels of shale oil in place.

Similarly, Pakistan is believed to have between 35 tcf and 70 tcf of tight gas resources, primarily in Sindh and Balochistan. These figures highlight the potential for meeting domestic energy needs and reducing reliance on costly imported liquefied natural gas (LNG).

Pakistan has made strides in exploring and developing its unconventional hydrocarbon resources. The state-owned Oil & Gas Development Company Ltd (OGDCL) has pioneered shale gas exploration, investing $30 million in its first shale gas well, KUC-1, in Hyderabad District, Sindh.

Initial drilling and hydraulic fracturing operations have been successfully completed, with shale production scheduled to begin in 2026. The Sembar formation in Sindh’s Kunnar-Pasakhi region is considered particularly rich in shale hydrocarbon resources.

Similarly, significant progress has been made in tight gas exploration. Commercial production of tight gas began in August 2024 at the Nur West Well-1 in Sujawal District, Sindh, producing 1.50 million standard cubic feet per day (MMSCFD) of gas integrated into the Sui Southern Gas Company Ltd (SSGC) network.

Pakistan Petroleum Ltd (PPL) and the Polish Oil and Gas Company (POGC) operate tight gas fields in Sindh’s Kirthar Block, including the Rizq and Rehman gas fields, which collectively produce over 50 MMSCFD of gas and small quantities of condensate.

The development of shale and tight gas offers several benefits. It could generate economic opportunities, including job creation, infrastructure development, and increased industrial activity.

Foreign investment could be attracted, fostering economic growth. Diversifying Pakistan’s energy mix with these resources would decrease reliance on a single energy source and enhance resilience against supply disruptions.

Exploiting these resources could also alleviate Pakistan’s energy crisis, reducing dependency on expensive imported fuels.

Despite the promising potential, several challenges must be addressed. Extracting shale and tight gas is capital-intensive, requiring sophisticated technology and significant investment. High upfront costs may deter investors, particularly in Pakistan’s economically constrained environment.

Moreover, hydraulic fracturing raises environmental concerns, such as water contamination, excessive water consumption, and induced seismicity. Robust environmental regulations and enforcement will be essential to mitigate these risks.

Infrastructure inadequacies present another hurdle. Shale and tight gas production demand extensive pipelines, processing facilities, and storage capabilities. Pakistan’s aging energy infrastructure is insufficient for these demands, necessitating significant upgrades and investments.

Additionally, local communities may resist development due to environmental concerns and resource scarcity, requiring transparent communication and public engagement.

Pakistan’s limited experience with unconventional gas extraction necessitates reliance on foreign expertise and technology transfer. The lack of a formal shale gas policy, though under development, further complicates efforts to attract investment and streamline operations.

On the tight gas front, the government revised its Tight Gas (Exploration & Production) Policy in 2024 to offer incentives like higher wellhead prices, tax breaks, and royalty concessions. However, a challenging business environment, security concerns, and high operational costs have deterred many international companies, complicating the realization of tight gas potential.

For Pakistan to capitalize on its shale and tight gas resources, it must overcome these financial, technical, and environmental challenges. The government must establish comprehensive policies for both shale and tight gas, ensuring an investor-friendly climate.

Collaborative efforts among the government, private sector, and international partners will be crucial to developing the necessary infrastructure and expertise. Effective environmental stewardship and public engagement will also play pivotal roles in mitigating resistance and fostering sustainable development.

In conclusion, Pakistan’s substantial shale and tight gas reserves present a strategic opportunity to address its energy crisis and achieve long-term energy security. While challenges abound, a coordinated and sustained effort could unlock potential of these resources, transforming Pakistan’s energy landscape.

Copyright Business Recorder, 2025