Business Recorder.........November 15, 2011..
Pakistan has an estimated 35 Trillion Cubic Feet (TCF) tight gas reserves, which are more than the existing approved natural gas reserves of 28.5 TCF, officials said.
Pakistan has an estimated 35 Trillion Cubic Feet (TCF) tight gas reserves, which are more than the existing approved natural gas reserves of 28.5 TCF, officials said.
They said that at present the country was facing severe gas shortage and to deal with the looming crisis, the government had approved Tight Gas Policy 2011 besides allowing import of Liquefied Natural Gas (LNG) through third party allocations.
To a question they explained, "tight gas is typically stuck in very tight formations underground - trapped in hard rock or in a sandstone or limestone formations that are usually impermeable and non-porous." Referring to a report of Pakistan Petroleum Exploration and Production Companies Association (PPEPCA), they said that the country would have sufficient natural gas if tight gas was explored which required advance technology and huge investment.
As tight gas exploration is more difficult and the required technology is more expensive, companies don't typically go in for exploration until given attractive incentives.
They said that due to the law and order situation in the country international gas exploration companies were reluctant to invest in the country.
The officials said that to attract the international companies the government has announced a number of incentives including security guarantee and better prices.
Companies, which succeed in recovering gas from tight fields within two years will get 50 percent hike against 2009 price and if it takes more time they will get only a 40 percent hike.
Besides, the lease for the fields will now be for 40 years instead of 30 as per the 2009 policy, the official said.
Even with the improved prices for the tight gas to be paid to the exploration companies, it is estimated that Pakistan will have to pay a maximum of $6.5/Btu for the gas compared to $12.3/Btu for imported gas.
They said that investors will be offered 40 percent premium on the current gas price for exploring tight gas.
Similarly, 50 percent premium will be offered on current gas price to investors if they commission their project within two years.
Pakistan can also produce gas from Thar coal with the help of underground coal gasification (UCG) technology.
There is a potential to produce 35 TCF of coal-bed methane from Thar coal, sources added.
Pakistan has approved a new tight gas exploration policy with improved incentives as compared with its 2009 policy, to overcome the country's gas shortfall and attract foreign investment, the official added.
"Tight gas is a more feasible option for the economy as even after giving additional incentives the cost of gas available will be less than imported gas and there will be no burden on the foreign exchange reserves for additional imports," the officials said.