Kunnar Pasaki: OGDC commences production from field

Rising local output may deflate LPG prices further.

ISLAMABAD: The LPG Association of Pakistan has congratulated the Oil and Gas Development Company Limited on commencing production of 120 megatons of LPG per day from its Kunnar Pasaki field.

“This is the first significant production of LPG in the country in the past seven years and represents a major achievement for OGDCL,”said Belal Jabbar, spokesperson for the LPG Association.

Production from the fields will provide a welcome boost to Pakistan’s domestic production of LPG and add 12% to total output. It will also help substitute a part of costlier imports and provide relief to the national exchequer.

LPG prices had hit a record high earlier this month due to the imposition of a petroleum levy and an all time high Saudi Aramco contract price, with which local prices are indexed. The petroleum levy was enforced to bring domestic prices to international levels.

“Faced with a lackluster demand due to high prices, marketing companies have begun to scale down their rates. The Demand pattern is also shifting due to changes in weather and resumption of gas supplies to industries and households”, said Belal.

“Local production, which previously met 80 per cent of the country’s demand, will now cater to approximately 90 per cent”, said Belal.

Published in The Express Tribune, February 11^th, 2012.