Long-term national energy security is imperative for sustainable economic growth. Natural gas, with its 49% share, is a vital element of the total energy requirements of Pakistan. Sadly, we are resorting to the import of gas from neighbouring countries at a large scale to meet the deficit instead of realising optimal potential of the remaining recoverable indigenous reserves.
Pakistan has conventional prognostic gas resources of 282 trillion cubic feet (TCF). Currently, hardly 10 percent of the potential is being exploited as total proven gas reserves amount to 54 TCF. At present the average production of natural gas in the country is 4,058 MMCFD (million cubic feet per day), whereas demand is much higher. Resultantly, committed supplies of gas are considerably short of the growing demand. The 10-year perspective National Development Plan 2001-11 had envisaged production of an additional 928 MMCFD natural gas by the year 2010-11 taking into account development of the new gas discoveries.
However, the national target could not be achieved, resulting in massive gas load-shedding experienced this winter across the country. Gas shortfall is thus projected to increase in the range of 2,200-2,900 MMCFD by 2015. The successive governments have offered extremely attractive incentives and concessions to investors for development and expansion of the oil and gas sector. Nonetheless, gas production during recent years remained static, and is now declining, for a variety of factors. There are 44 blocks consisting of 158 associated and non-associated gas-fields operated by some 16 foreign and domestic companies. Petroleum E&P (exploration and production) companies have explored natural gas from different sites in their licensed areas. Natural gas is produced from 98 major and small gas-fields located primarily in Balochistan, Sindh and Khyber Pakhtunkhwa.
Significant discoveries of hydrocarbons have been made in recent years, which include a total of 150 gas discoveries, medium and small-sized. The major discoveries include Safed Koh Block/Salsabil Gasfield with over 3 TCF recoverable gas potential, Manazalai Gasfield with economically proven reserves of 1.88 TCF and Makori Gasfield with proven reserves of 700 BCF (billion cubic feet). Others include Tal Block (including Mamikhel and Maramzai fields) with projected production of 320 MMCFD, Sheikhan Gasfield (Kohat) with potential of 105 MMCFD gas, Kadanwari Gasfield with projected production of 60 MMCFD, Mehar (Shahdadkot) of 50 MMCFD potential, Mubarak Block with a potential of 30 MMCFD and Zin Block in Dera Bugti, which is a large reservoir with a very prospective potential.
The list also includes Nashpa/Mela Gasfield with a potential of producing 11 MMCFD, Noorai Jagir Gasfield (Hyderabad) of 6 MMCFD, Maru/Reti Gasfield with a potential of 12 MMCFD, Rehmat of 20 MMCFD, Makori (Kohat) of 30 MMCFD, Nur-Bagla gas condensate of 10 MMCFD, Jhakro gas condensate of 6 MMCFD potential, Sajawal of 10 MMCFD, Sara West Gasfield of 120 MMCFD production, Hala Block (Hyderabad) of 15 MMCFD, Yasin Block (Shikarpur) of 28 MMCFD, Latif Block (Sukkur) of 25 MMCFD and Gambat Block (Sukkur) with a potential of producing 25 MMCFD natural gas. Associated gas discoveries have also been made at Kunnar Pasahki Deep field and Jhal Magsi with 15 MMCFD potential, Nim Concession/Noorai Jagir of 6 MMCFD, whereas Manazalai gas-field has recently started production of 250 MMCFD gas.
In fact, the E&P sector is in the process of developing new oil and gas fields for many years but at a very slow pace and thus several gas discoveries have remained unutilised so far. About 500 MMCFD gas was scheduled to come into gas supply network by 2010 only from the five of the newly discovered fields. Nonetheless, commissioning of gas development gathering and processing projects, like Uch-II with a potential of 160 MMCFD, Sinjhoro with a potential of 31 MMCFD and Kunnar Pasahki Deep/Tando Allahyar gas-fields, which have been discovered since 2005-2006, have delayed by almost three years. Kunnar Pasahki Deep field located in Hyderabad Sindh is expected to produce up to 250 MMCFD by 2013. In the first phase however, production and supply of 100 MMCFD gas has recently commenced from Kunnar Pasahki field.
On the other hand, a large number of E&P companies bought field concessions years ago but have yet to begin exploration and development activities. The pace of exploration and development of gas reserves is slow, primarily for the reason that drilling activities remained behind the target. As on June 30, 2011 a total cumulative of 765 exploratory and 1,012 development wells have been drilled so far, which is considered very low compared to international level of activities. During the period 2006-2011 a total of 131 wells were drilled against a target of 100 wells per year.
Besides the poor security situation in the prospecting areas there has been a total lack of will on the part of the private sector. There is a constant demand of the powerful lobby of the E&P companies for higher wellhead price. The framework of discovery of oil and gas has been revised by the government frequently - in 1997, 2001, 2007, 2009 and 2012. Improving the gas pricing formula has resulted in manifold increase of gas tariff to the consumers while the E&P companies made windfall profits. Net profits after tax earned by the E&P sector during the first quarter of the year 2011-12 was Rs 36 billion compared to Rs 27 billion during the same period last year.
It is hoped that the Petroleum Policy 2012 would be implemented by the government in letter and spirit, aiming at realising optimal potential of remaining recoverable indigenous reserves of natural gas.
(The writer is former Chairman of State Engineering Corporation and Vice President of the Institution of Engineers Pakistan)