Oil refinery project: Chinese team visits Gwadar
In order to materialise the $4.5 billion oil refinery project in Gwadar,...
Amid a growing energy crisis which has forced the country to rely on imported gas, Pakistan may have found one of the largest hydrocarbon reserves, with potential deposits of one trillion cubic feet, in Balochistan’s Margand block owned by Pakistan Petroleum Limited (PPL). Since 2000, no major discovery of hydrocarbon reserves has been made due to low wellhead gas prices and bureaucratic snags. Several companies pulled out of the country due to small hydrocarbon discoveries. Initial estimates based on the structure of the Margand block reveal that this block has one trillion cubic feet of reserves. Pakistan will save $900 million due to LNG import substitution if PPL flows reach 300 mmcfd, discovery in Margand block would be a game changer for the country. Of the existing gas reserves, 7% is depleting every year. Officials pointed out that domestic gas production had been static at 4 billion cubic feet per day (bcfd) since 2000. However, gas demand has increased manifold, causing shortages. The government is giving LNG to domestic consumers at prices 100% higher than the cost of domestically produced gas. However, this will lead to another financial crisis as the government will either have to give subsidy or will have to put the burden on consumers. A PPL spokesperson said that the drilling of Margand X-1 exploration well had not yet been completed. “The estimate of reserves cannot be made until the well is drilled to the targeted depth and subsequent tests are carried out,” the spokesperson added.