The Oil and Gas Development Company Limited (OGDCL) has commenced gas production from a newly drilled well located in Dera Bugti, Balochistan.
This development marks a significant contribution to Pakistan's natural gas output.
According to a letter from OGDCL to the Pakistan Stock Exchange, the Uch-35 well is producing an impressive five million standard cubic feet of gas per day (MMSCFD).
The gas output has been successfully integrated into the Uch Gas Processing Plant, which will aid in streamlining and distributing the additional gas supply. OGDCL, the country’s largest exploration and production company, holds complete ownership of the Dera Bugti well, as confirmed in its letter to the PSX.
On Nov 12, Pakistan decided to stop the purchase of imported liquefied natural gas (LNG) and redirect it to domestic consumers, following a reduction in electricity consumption.
Also Read: Pakistan decides to direct imported LNG to domestic use
According to documents from the Ministry of Petroleum, providing LNG to domestic consumers will require an investment of Rs163 billion. Sources said that the imported LNG is increasing pressure on pipelines on a daily basis.
Sources confirmed that the power sector had been using 600 million cubic feet per day (MMcfd) of LNG. With the closure of captive power plants, 150MMcfd of LNG will now become surplus, while the gas sector is also earning a revenue of Rs400 billion from captive power.
The government plans to address the circular debt issue by increasing gas tariffs and removing the tariff difference between imported LNG and local gas.
Currently, the tariff for local gas is set at Rs1,550 per MMcfd, while the tariff for imported LNG is Rs3,500 per MMcfd. By eliminating this tariff disparity, the government expects to generate Rs200 billion in revenue. Additionally, the tariff for fertilizer companies will also be increased as part of the broader plan to boost government revenue.
