OGDCL taps Pakistan’s first-ever tight gas project

Oil and Gas Development Company Limited (OGDCL) announced the successful commencement of early commercial production from Pakistan’s inaugural tight gas project at Nur West Well-1, situated in Sindh’s District Sujawal.

Previously, the development of unconventional energy resources was hampered by high costs and limited technology. Currently, Nur West Well-1 is generating 1.5 million standard cubic feet per day (mmscfd) of gas, with a wellhead flowing pressure of 1,050 PSI. The gas, extracted from the ‘A’ sand of the lower guru formation, has been smoothly integrated into the Sui Southern Gas Company Limited (SSGCL) network. This integration aims to improve the national gas supply infrastructure and contribute to the stabilization of Pakistan’s energy supply.

During the drilling phase, conventional testing methods initially did not produce favorable outcomes. To address this issue, OGDCL utilized hydraulic fracturing, an advanced technique crucial for achieving production viability. This innovative approach demonstrates OGDCL’s commitment to employing state-of-the-art technologies to maximize resource potential.

OGDCL has also developed a comprehensive roadmap for the exploration and development of tight gas, which is currently being executed. This plan underscores the company’s dedication to expanding energy resources, securing national energy requirements, and promoting sustainable development throughout Pakistan.

In early April 2024, the company announced to the Pakistan Stock Exchange (PSX) about this new gas reserve at its exploratory Well Nur West 1. OGDCL is the sole operator of the Nur Development and Production Lease (D&PL), having drilled and tested the structure to a depth of 2,975 meters using its own expertise.

The new policy, approved by the Council of Common Interests (CCI), encompasses all qualifying tight gas discoveries and allows operators to sell gas at negotiated prices, with the government retaining the first right of refusal.

In late January 2024, the federal government introduced the Tight Gas (Exploration & Production) Policy 2024, approved by the CCI. This policy covers all qualifying tight gas discoveries and permits operators to sell gas within Pakistan at negotiated prices, with the government holding the first right of refusal.

A senior official from the Petroleum Division noted that the premium pricing sets the wellhead price for tight gas at $7.5 per MMBTU, with 40% taxes and 12.5% royalties. The policy also allows operating losses to be carried forward for up to 15 years, aiming to replace costly RLNG imports and reduce foreign exchange outflows.