Pakistan Hits Major Milestone With Tight Gas Production

First tight gas well  producing 15 million cubic feet per day of natural gas is on line at Sajawal gas field in Kirthar block in Sindh province, according to a report in Express Tribune. This marks a major milestone in development of unconventional hydrocarbon energy sources in Pakistan. Sajawal gas field is located 110 km south east of Karachi, Pakistan. It puts Pakistan in an exclusive club of just a few nations producing unconventional natural gas.

The tight gas well in Kirthar belt is being operated jointly by Poland's Polskie Gornictwo Naftowe i Gazownictwo (PGNiG) and Pakistan Petroleum Limited (PPL).

The state-owned Sui Southern Gas Company (SSGC) is buying gas from the joint venture at $6 per million BTUs (half the price agreed for Iranian gas) for distribution through its network in southern Pakistan. SSGC is laying a 52-kilometre-long pipeline at an estimated cost of Rs 325 million, carrying gas from the Suleman Range to the Nooriabad industrial estate.

First tight gas production launch in Sajawal is a very significant milestone for Pakistan. It augurs well for the future of both tight and gas production in the country because there are similarities in how both are extracted. Pakistan is endowed with huge deposits of both---105 trillion cubic feet (TCF) of shale gas and at least 33 trillion cubic feet of tight gas. In addition, Pakistan is also blessed with 9.1 billion barrels of shale oil which is also extracted in a similar way.

Pakistan's current demand for natural gas is about 1.6 trillion cubic feet per year. Even if consumption triples to 5 trillion cubic feet per year, the current known reserves of over 150 trillion cubic feet of conventional and unconventional gas are sufficient for over 30 years.

Wells for both of these unconventional resources (tight and shale) must be "hydraulically fractured" (fracked)  in order to produce commercial amounts of gas. Operator challenges and objectives to be accomplished during each phase of the Asset Life Cycle (Exploration, Appraisal, Development, Production, and Rejuvenation) of both shale gas and tight gas are similar, according to a paper on this subject.  Drilling, well design, completion methods and hydraulic fracturing are somewhat similar; but formation evaluation, reservoir analysis, and some of the production techniques are quite different.

The current technology known as hydraulic fracturing or fracking was developed in the United States and it has spawned shale oil and gas revolution increasing supplies and reducing gas prices. The Chinese are now working on further cutting costs to make the equipment and technology more affordable.

Like the shale gas revolution in the United States, tight gas is transforming China's gas production - accounting for a third of total output in 2012 -- and will form the backbone of the country's push to expand so-called "unconventional" gas production nearly seven-fold by 2030, according to Reuters. The speed and size of the boom has exceeded forecasts and has been led by local firms developing low-cost technology and techniques, already being rolled out by Chinese companies in similar gas fields outside of China. Pakistan can benefit from the Chinese in its efforts to increase tight and shale gas and oil production.

Related Links:

Haq's Musings

Why Blackouts and Bailouts in Energy-Rich Pakistan?

Pakistani Guar in Demand for American Shale Fracking

US EIA Estimates 9.1 Billion Barrels of  Shale Oil in Pakistan

Pakistan's Vast Shale Gas Reserves

Abundant, Cheap Coal Electricity

Twin Energy Shortages of Gas and Electricity in Pakistan

Pakistan Energy Security Via Shale Revolution


Riaz Haq said…
Here's a brief tutorial from Shell on shale and tight gas:
What is shale gas?

Shale gas is a description for a field in which natural gas accumulation is locked in tiny bubble-like pockets within layered sedimentary rock such as shale. Think of it as similar to the way tiny air pockets are trapped in a loaf of bread as it bakes.

While geologists have known for decades that shale gas existed deep beneath many areas of the North American continent, traditional vertical oil and gas drilling methods were able to access only a small fraction of the gas within these formations. But recently, operational efficiencies and proven technology have come together to make shale gas both accessible and economically competitive.

To extract the gas from shale formations, Shell uses thoroughly tested technology in a responsible way.

What is tight gas?

While shale gas is trapped in rock, tight gas describes natural gas that is dispersed within low-porosity silt or sand areas that create a tight-fitting environment for the gas. How tight? Tight gas is defined (in the U.S.) as having less than 10 percent porosity and less than 0.1 millidarcy permeability.

Porosity is the proportion of void space to the total volume of rock. For example, fresh beach sand has around 50 percent porosity. Tight gas is held in pores up to 20,000 times narrower than a human hair.
Permeability is the ability of fluid to move through the pores. A person can blow air through a rock sample having about 1000 millidarcies permeability.
Horizontal drilling. This technology makes it possible for a well to be drilled vertically several thousand feet or meters, then curved to extend at an angle parallel to the earth’s surface, threading the well through the horizontal gas formation to capture more pockets of gas. From a central location Shell can drill multiple wells in different directions that penetrate the reservoir vertically or horizontally. This limits the number of drilling locations – known as well pads – on the surface.
S-shaped drilling. In some geological settings, it is more appropriate to directionally drill s-shaped wells from a single pad to minimize surface disturbance. S-shaped wells are drilled vertically several thousand feet or meters, then extend in arcs beneath the earth’s surface.
During drilling, mobile drilling units are moved between wells on a single pad. This avoids dismantling and reassembling drilling equipment for each well, making the process shorter and saving resources.
Riaz Haq said…
Here's a link to Pakistan Petroleum Exploration and Production Companies Association (PPEPCA) detailing facts and data on activities in Pakistan:
Riaz Haq said…
Here's a CNBC report on Prince Walid Bin Talal's concern about growing shale oil and gas hurting Saudi economy:

Saudi billionaire Prince Alwaleed bin Talal warned that the Gulf Arab kingdom needed to reduce its reliance on crude oil and diversify its revenues, as rising U.S. shale energy supplies cut global demand for its oil.

In an open letter to Oil Minister Ali al-Naimi and other ministers, published on Sunday via his Twitter account, Prince Alwaleed said demand for oil from OPEC member states was "in continuous decline".

He said Saudi Arabia's heavy dependence on oil was "a truth that has really become a source of worry for many", and that the world's biggest crude oil exporter should implement "swift measures" to diversify its economy.

(Read more: Oil prices jump as US crude takes bigger role on world oil stage)

Prince Alwaleed, owner of international investment firm Kingdom Holding, is unusually outspoken for a top Saudi businessman.

But his warning reflects growing concern in private among many Saudis about the long-term impact of shale technology, which is allowing the United States and Canada to tap unconventional oil deposits which they could not reach just a few years ago. Some analysts think this may push demand for Saudi oil, as well as global oil prices, down sharply over the next decade.

Over the past couple of years the Saudi government has taken some initial steps to develop the economy beyond oil - for example, liberalising the aviation sector and providing finance to small, entrepreneurial firms in the services and technology sectors.

Nowhere Is Immune from Unrest: Saudi Prince
Saudi Prince Alwaleed Bin Talal, talks to CNBC about turmoil in the Middle-East and the price of oil.
Naimi said publicly in Vienna in May that he was not concerned about rising U.S. shale oil supplies. Prince Alwaleed told Naimi in his open letter, which was dated May 13 this year, that he disagreed with him.
"Our country is facing a threat with the continuation of its near-complete reliance on oil, especially as 92 percent of the budget for this year depends on oil," Prince Alwaleed said.

(Read more: Don't mess with West Texas: US oil to keep outpacing Brent)

"It is necessary to diversify sources of revenue, establish a clear vision for that and start implementing it immediately," he said, adding that the country should move ahead with plans for nuclear and solar energy production to cut local consumption of oil.

The shale oil threat means Saudi Arabia will not be able to raise its production capacity to 15 million barrels of oil per day, Prince Alwaleed argued. Current capacity is about 12.5 million bpd; a few years ago the country planned to increase capacity to 15 million bpd, but then put the plan on hold after the global financial crisis.

While most Saudi officials have in public insisted they are not worried by the shale threat, the Organization of the Petroleum Exporting Countries (OPEC) has recognised that it needs to address the issue.

(Read more: OPEC ministers: falling demand is our top concern)

In a report this month, OPEC forecast demand for its oil in 2014 would average 29.61 million bpd, down 250,000 bpd from 2013. It cited rising non-OPEC supply, especially from the United States.

At its last meeting in Vienna in May, OPEC oil ministers spent time discussing shale technology and set up a committee to study it.
Riaz Haq said…
Here's a Daily Times on oil and gas drilling in 2012-13 in Pakistan:

Exploration and production drilling activities in financial year (FY) 2012-13 was the highest-ever development drilling in Pakistan as total 62 wells were drilled, up 82 percent on yearly basis, analysts said on Tuesday.
Meanwhile target of 105 wells for FY 2013-14 is modest and leaves room for improvement, said Fawad khan an analyst at Foundation Securities.
Pakistan has achieved highest-ever development drilling with total 62 wells in FY 2012-13, registering 82 percent yearly increase. The sharp pickup in activity is driven primarily by private sector and should lead to modest increase in production, as most of the drilling is concentrated in low-yielding wells in Badin.
United Energy Group (UEG-Chinese exploration and production giant)) has emerged as the largest contributor to Pakistan drilling programme with over 43 percent drilling in FY 2012-13. Once again stratigraphic traps in Badin received huge focus on exploration. UEG efforts to unlock the potential in Badin block and new exploration leases are bearing fruits out of 17 exploration wells, UEG found hydrocarbons in at least 12 wells.
Oil and Gas Development Corporation (OGDC) and Pakistan Petroleum Limited (PPL) are yet to touch their full potential on drilling activity. OGDC has drilled only 24 wells in FY 2012-13, up 41 percent on yearly basis, but still below start of the year drilling target of 29 wells.
Khan said available details on FY 2013-14 drilling suggest both PPL and OGDC have not set significantly higher drilling target. Total industry drilling target is set at 105 wells like FY 2012-13. UEG will lead drilling with 55-60 wells drilling programme.
Ongoing exploration in high profile Zin block (OGDC), exploration drilling in Tal at Kot (particularly POL) and complete results on exploration wells in Gambat South (PPL) can bring significant reserve and production upside.
A number of important development projects are slated to come online during FY 2013-14, which are important for materialisation of overall earnings and production targets.
Khan particularly highlighted the Gas Processing Facility at Makori, development drilling in Makori East and Nashpa and progress on second phase production ramp-up on Kunnar Pasakhi Deep (KPD) field.
He estimated FY 2013-14 earnings growth for OGDC, PPL and POL of 36 percent, 28 percent and 32 percent driven by 15 percent, 6 percent and 11 percent volume growth respectively.
Despite a swift bidding round for 60 exploration leases following approval of 2012 E&P policy, actual award of leases has faced certain regulatory hiccups in certain cases. This can potentially delay the impact of new policy on drilling programme, which typically takes at least three years to materialise. Just to recap, 2012 policy offered 26percent, 100 percent higher oil/gas prices over 2001 policy pricing.
Government initially offered attractive conversion terms for areas under previous policies but later on changed certain conditions. Through award of 57 blocks, the government received minimum work commitment of $372 million.
Riaz Haq said…
Net FDI in Pakistan up 76% from 2011-12 to 2012-13:

Net foreign direct investment into Pakistan rose 76 percent in the fiscal year 2012-13, which ended in June, reaching $1.447 billion compared to previous year, according to data from the State Bank of Pakistan.
Between July and June, there was an inflow of $2.653 billion and outflow of $1.205 billion, according to the central bank. In the same period the year earlier, there was an inflow of $2.099 billion and outflow of $1.278 billion.
During June this year, net foreign direct investment rose to $128 million compared to $56 million a year earlier.\07\17\story_17-7-2013_pg5_3
Riaz Haq said…
Here's a China Daily report on what China can learn from US shale energy development:

WASHINGTON -- The surging shale energy output in recent years has been centering in North America, but it can also happen in other places like China, a US energy expert said Friday.
Shale gas will come to play a more important role in China's energy mix in the long term, said IHS Cambridge Energy Research Associates Chairman Daniel Yergin at a seminar on energy boom in North America.
"China has great potential for shale gas but it will take perhaps five to 10 years to develop, due to the lack of infrastructure and logistic capabilities," Yergin told Xinhua.
He added that Chinese energy companies among others are learning the necessary technologies from their American counterparts to unlock the unconventional energy including shale oil and gas.
The energy industry was concerned a decade ago that US energy output had hit the ceiling and started to go down, but now the United States is about to overtake Russia in terms of oil and gas production, said Yergin.
The United States produced the equivalent of 22 million barrels a day of oil, natural gas and related fuels in July, according to figures from the Energy Department.
The shale energy bonanza reduced US imports of natural gas and crude oil by 32 percent and 15 percent respectively in the past five years.
However, the environmental implications of shale gas extraction, a process that includes hydraulic fracturing, remain uncertain.
Hydraulic fracturing involves pumping water, sand and chemicals deep underground into horizontal gas wells at high pressure to crack open hydrocarbon-rich shale and extract natural gas.
Accelerated shale gas drilling and hydrofracking in recent years has fueled concerns about contamination in nearby drinking water supplies.
Riaz Haq said…
Modi on petroleum exploration in Pakistan: Referring to the exploration scope in the region, he said Pakistan has started exploring the area across the border for gas and petroleum products.

"Look across the border in Pakistan, they have started massive work in gas and petroleum sector, why can't we?" he asked.

"It is the same region. There is immense scope for gas and petroleum here. I am sure we can definitely find it here as well. It can give new strength to our nation."

Addressing the youths, he said there will be opportunities in the exploration work in future and asked them to prepare themselves for it.

"We have started a petroleum university in Gujarat and this is for youngsters. I would urge the youth here to go on Internet and search about petroleum university. I invite you to make full use of it," he said.
Riaz Haq said…
Here's a Dawn report on tight gas in Naushero Feroz in Sind:

KARACHI: The Pakistan Petroleum Limited (PPL) announced discovery of gas from Exploration Well, Naushahro Firoz X-1 in Naushahro Firoz Block, Sindh.

In a filing with the stock exchange on Wednesday, under the disclosure of ‘insider information’ in terms of section 15D(1), the PPL reminded that it holds 90 per cent working interest in the well.

M Mubbasshar Siddique, company secretary for PPL, stated that the exploration well at Naushahro Firoz X-1 was drilled down to target depth of 3,773m(MD) within Chiltan Formation.

Based on gas shows encountered during drilling and wire line logs evaluation, a cased hole drill stem test (CHDST) was carried out.

The PPL informed that after acidization, the well flowed good quality gas at variable rates with the maximum of 11.2mmscfd with a flowing wellhead pressure of 2,635psi and a minimum of 1.7mmscfd with a flowing well head pressure of 375psi at a choke size of 32/64 inches.

PPL observes: “Preliminary analysis of the test data suggests the discovery to be the tight gas. However, further evaluation is required to determine the nature and commerciality of the discovery based on the geological, geophysical and engineering data collected during the drilling and testing of the well and also by drilling of additional well(s)”.
Riaz Haq said…
#Pakistan Petroleum reports gas, condensate discovery in Gambat South. #Sanghar #Sindh …

KARACHI, Pakistan -- Pakistan Petroleum Limited, operator of the Gambat South Block with a 65% working interest, has announced another gas and condensate discovery at its Kabir X-1 exploration well in Sanghar District, Sindh, Pakistan.

Kabir X-1 was spud on April 24 and reached final depth, of 4,020 m, on June 28. Based on wire line logs, potential hydrocarbon bearing zones were identified in the Basal Sand of the Lower Goru formation.

During initial well testing, Kabir X-1 flowed at 1.94 MMscfgd along with 253 bcpd on a 16/64-in. choke.

Currently, well testing is underway to evaluate the potential of the discovery.
Riaz Haq said…
A review of Pakistani shales for shale gas exploration and comparison to North American shale plays
Author links open overlay panel Ghulam Mohyuddin Sohail a, Ahmed E. Radwan b, Mohamed Mahmoud c

Recent advancements in technologies to produce natural gas from shales at economic rates has revealed new horizons for hydrocarbon exploration and development worldwide. The importance of shale oil and gas has aroused worldwide interest after the great success of production in North America. In this study, different marine source rocks of Pakistan are evaluated for their shale gas potential using analogs selected from various North American shales for which data have been published. Pakistani formations reviewed are the Datta (shaly sandstone), Hangu (sandy shale), Patala (sandy shale), Ranikot (shaly sandstone), Sembar (sandy shale) and Lower Goru (shaly sandstone) formations, all of which are known source rocks in the Indus Basin. Available geological data of twenty-six wells (e.g., geological age, depositional environment, lithology and thickness), geochemical data (e.g., total organic carbon (TOC), vitrinite reflectance (Ro), rock pyrolysis analysis and maturity), petrophysical data (e.g., porosity and permeability) and dynamic elastic parameters estimated from logs (Young’s modulus and Poisson’s ratio) have been investigated. According to this study, the Pakistani shales are explicitly correlated with the most active shale gas plays of North America. The burial depths or geological position of the Pakistani shales are generally comparable to or slightly higher than the North American shales based on the available data. The thicknesses of the Pakistani (except for the Sembar shale) and North American shales fall in similar ranges. In terms of mineralogical composition, all of the Pakistani shales except the Ranikot and Hangu shales have quartz contents in the 40% to 50% range (approximately), which is similar to most of the North American shales. The high maximum TOC of the Hangu and Sembar shales (10%) is comparable to the New Albany, Antrim and Duvernay shales. The maximum TOC values for the Ranikot (3%), Lower Goru (1.5%) and Datta (2%) shales are lower than all North American shales. The TOC of Patal Shale (
5%–10%) is comparable to Fayetteville and Eagle Ford shales. The geological and geochemical parameters of all the Pakistani shales reviewed in this work are promising regarding their shale gas prospects. However, geomechanical data are required before conclusions on these shales’ economic production can be made with confidence.


The exploitation of shale gas reservoirs may enhance gas production and reduce the severity of the ongoing energy crisis. The main challenge in Pakistan is to evaluate the shales using limited data and samples. That is why only a few companies are working on shale gas reservoirs in Pakistan now. The researchers need to assess and rank prospective Pakistani shales to entice companies to consider shale gas development. The geological characterization of Pakistani shales has been investigated by several authors (e.g., Warwick et al., 1995, Kazmi and Abbasi, 2008, Ahmad et al., 2012, Hakro and Baig, 2013, Jalees, 2014), but detailed work is required on geochemical, petrophysical and geomechanical characterization for assessing the actual potential of shales in Pakistan (Abbasi et al., 2014).

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