PPL invests Rs25 billion to increase gas production in Sindh

Three gas processing facilities would be set up to address the issue of shortage

KARACHI: Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said that Pakistan Petroleum Limited (PPL) has so far invested Rs25 billion to set up three gas processing facilities at Gambat, Sindh.

The facilities would help increase gas production and address the issue of gas crisis in the country, he said, after inaugurating the Gas Processing Facility II (GPF-II) of 50 million standard cubic feet per day (mmscfd) at Gambat South Block.

The local gas along with the availability of imported gas (Re-gasified Liquefied Natural Gas) has enabled the country to shift power production on gas from comparatively expensive furnace oil. “The shift of production to gas from furnace oil would help save $2 billion of foreign exchange reserves per annum,” the minister said.

He said three renowned private firms of the world are engaged in setting up more terminals to increase import of RLNG. “The next terminal would become operational at the outset of the next year,” he said.

PPL has planned to install GPF-III with a processing capacity of 60 mmcfd to tap additional reserves from the block. “GPF-III is expected to be completed by the close of 2017.”

Working on full capacity, GPF-II is currently producing 35 mmcfd pipeline quality sales gas, nearly 680 bpd condensate and 12 mtd LPG, which translates to more than 2.3 mmboe (million barrels of oil equivalent) annually, resulting in an annual saving of $105 million to the national exchequer.

Located in district Sanghar, Sindh, Gambat South is operated by PPL with 65% working interest. So far, eight discoveries -Wafiq, Shahdad, Sharf, Kinza, Faiz (two formations), Kabir and Hatim - have been made in the block.

Of these, Shahdad is already producing 6 mmcfd sales gas and 80 bpd condensate through GPF-I commissioned since mid-2015.

Tight gas by December 2017

PPL CEO Syed Wamiq Bokhari said that his company is estimated to start commercial production of ‘tight gas’ by December 2017. Tight is a natural gas which is produced from reservoir rocks and needs additional efforts and resources.

He said the company has found tight gas deposits at Hadi well in Gambat South. It is flowing 0.8 million cubic feet per day (mmcfd) of the gas at present. Commercial production would become viable when the flow increases to 3-4mmcfd, which is expected by December 2017.

He said that PPL has so far invested $50-60 million in tight gas projects and would tentatively invest another $30 million during 2017.

Studies suggest the province of Sindh holds estimated 50 trillion cubic feet (TCF) deposits of tight gas. Similarly, Sui holds around 13 TCF, he added.

Companies usually go after tight gas once the deposits of natural gas depletes to a critical level, which is the case in Pakistan.

Bokhari added that the company has also planned to drill wells in the province of Balochistan where none of the exploration and production companies is activated yet. The company has planned to spud 5 wells in the province during current fiscal year. In total it would drill 28 wells nationwide during the year, he said.

He said the company would also set up a 20 megawatts gas-fired power plant along Hatim Faiz well north of Shahdadpur.

Published in The Express Tribune, December 24^th, 2016.

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