The Oil and Gas Development Company Limited (OGDCL) has predicted that Pakistan will run out of its indigenous oil reserves by 2025 and its gas reserves within the next 15 years.
The Pakistan Institute of Development Economics (PIDE) quoted the OGDCL and said that the current gas reserves will only last 15 years if the consumption remains at the current levels until 2030.
It made these assessments about the country’s oil and gas reserves in its recent research brief called ‘Gas Crises in Pakistan’. The PIDE also revealed that while gas is the third largest energy resource globally, Pakistan contributes a share that is less than one percent of the global gas consumption with its 30.6 billion cubic meters of natural gas.
Pakistan mainly fulfills its energy needs with imported and indigenous resources in the ratio of 44:56 respectively. Both the imported Liquefied Natural Gas (LNG) and natural gas make up over 40 percent of the country’s present gas consumption.
Recently, Pakistan’s gas demand has skyrocketed while gas production and exploration have fallen and LNG’s regulatory and operational structure is ineffective, resulting in a countrywide shortage and higher supply costs.
As per its data, 78 percent of Pakistani households do not have access to natural gas as it requires a huge investment. Its consumption in the domestic sector has surged by 11 percent throughout the years.
Furthermore, supplying gas to the domestic sector has a higher cost than the industry and power sectors.
The PIDE also stated that overall 15 exploration and production companies function in 55 gas fields across the country. A large part of the country remains unexplored because of security issues, and the PIDE termed the Pishin basin in Balochistan a ‘valuable block’ where no exploration has been done because of the law and order situation.
It also highlighted the need for competition in Pakistan’s gas distribution industry, as there are only two state-owned enterprises in this sector — the Sui Northern Gas Pipelines Limited (SNGPL) and the Sui Southern Gas Company Limited (SSGCL).
According to its research, the circular debt in the gas sector has also surpassed Rs. 1.5 trillion due to bottlenecks resulting from politically favored allocations and monopolistic business functions.
The PIDE’s research brief also recommended solutions to overcome or minimize irregularities in the gas sector, which can be accessed on its website.