Munawar Hasan
Friday, March 14, 2014
LAHORE: The cost of shale gas production will be around three to five times higher than that being produced through the conventional means, official sources said on Thursday.
A government’s assessment shows that around three to four billion dollars of investment is required to produce 100 million metric cubic feet per day (mmcfd) of shale gas in the country.
The federal ministry of petroleum and natural resources made the preliminary assessment in consultation with the leading exploration and production companies.
The produced shale gas, according to the assessment, will cost $12 to $15 per million British thermal units, which is fairly high price, said the sources.
Pakistan that has been blessed with a large reserve of natural gas is estimated to have one of the biggest reserves of shale gas in the world.
As per the findings of the US Energy Information Administration (EIA), technically recoverable shale gas reserves in Pakistan have been pegged at 105 trillion cubic feet (TCF). These reserves are largest in the region—even more than the estimated reserves of India.
The US EIA has estimated total shale gas reserves in Pakistan at 586 TCF and over nine billion barrels of shale oil. In terms of shale oil reserves, Pakistan is among the top 10 countries.
These estimates of recoverable hydrocarbon reserves are by far higher than those proven reserves of gas of 24 TCF and less than 300 million barrels for oil.
Pakistan currently produces about 4.25 billion cubic feet per day of gas, while it is currently facing a shortfall of 1.6 to 2 BCFD.
According to the official sources, exploration of shale gas is initially expected in upper Sindh and lower/central Punjab. The exploration license will be awarded through international competitive bidding.
When contacted, Shahid Khaqan Abbasi, federal minister for petroleum and natural resources, admitted shale gas exploration is comparatively a costly option while produced gas would also not be a cheap source of energy.
However, he said, precise investment and cost of produced gas would be available after preparation of exploration and production policy for shale gas.
‘We are working on formulation of policy in this regard, he said and adding it is expected that the policy on shale gas will be ready in three to four months.
To another question, he said, exploration of shale gas is not only capital intensive but a lot of water is required for drilling. “We will have to keep in mind all such issues while developing a framework for exploration,” he observed.
To another question, Abbasi said, Pakistan needs to extensively work for augmenting energy supplies keeping in view future demand as well as bridging deficit between demand and supply of gas.
“We need to build LNG (liquefied natural gas) import terminal, expedite work on shale gas/oil exploration and trans-boundary gas pipelines in a coherent manner.”
It is just not an issue to pursuing one option or one source of energy but a holistic approach is required to diversify energy resources of the country with a view to provide sustainable solution of energy crisis, he concluded.
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