ISLAMABAD - The federal government Thursday announced that there will be no subsidy on Liquefied Natural Gas prices for the textile or any other sector.

Pakistan will get LNG at the rate less than $5.34 per mmcfd and all the consumers of imported gas will have to pay the full price, Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said while addressing a press conference here.

The minister announced the discovery of gas and oil reserves in Thal, (Sindh) and Nashpa block located in district Karak (Khyber Pakhtunkhawa) by Oil and Gas Development Corporation Limited (OGDCL).

To a question that whether the government has recently pledged with the textile industry to provide them with subsidize gas, minister categorically rejected the claim saying that “we are not going to provide LNG to any sector on subsidize rates”. The minister said that that the textile sector has been provided with 60mmcf/day gas, which is one-sixth of its demand and they are paying full price. Besides, there is no supply of gas to the captive power plants.

These discoveries include Thal East -1, which is located in district Sukhur, and the well will have a production capacity of 35.7 mmcfd while Nashpa block has the potential oil reserves of 1032 barrel per day.

The discovery of Thal East Well 01, will add to the significant hydrocarbon reserves base of the OGDCL and the country. One more zone in Lower Goru formation Sand is available which is yet to be tested and hopefully it will add more reserves. The completion strategy will be finalized based on testing results of both zones in the well.

The minister said that Pakistan Petroleum Limited (PPL) has also discovered gas reserves in Matiari, Sindh. The Hatim X-1 well was spud in the Gumbat South Block and was drilled to the depth 3,800 meters. The total production potential is 56 million cubic feet per day (mmcfd) of gas.

The minister said that the government is making all out effort to bring the new discoveries to the system as soon as possible. Both the discoveries will help adding 90 mmcfd in the national gas transmission system.

In response to a question, Zahid Mir, MD/CEO, replied that OGDCL is involved in the exploration and production of hydrocarbons in the province of Balochistan and currently possess 24 exploration licenses. The company is actively drilling in Balochistan and also has started conducting 2D and 3D seismic data surveys in eight blocks in the province. Some of the seismic acquisition is being carried out through third party foreign contractors as well.

MD OGDCL said that by March 2016, around 125 mmcf/day gas will be added to the system and by end March 380 metric ton plant of LPG will be also installed. Regarding shale gas, he said the well which have been drilled in the last two years and which are now under this process, we are doing evaluation for shale side by side.

The company has been able to move into areas in Balochistan which were previously inaccessible due to the security situation. OGDCL has started exploration work in Kup, Kohlu, Zin, and many other areas in Balochistan and expects to start exploration work in Block 28 as well, where the approval of operatorship is expected to be accorded by DGPC very soon.

The government has to dig 31 wells in all four provinces during financial year 2015-16. Managing Director OGDCL said that 17 wells are under drilling process. We have spud nine new wells and five are in testing phase and in February 2016, we will drill six new wells and by June 2016 we will complete all the process.

The minister said that MOL Pakistan recently made discovery and supply from it will hopefully come in the system by April this year, minister said. “We want to bring this oil and gas in system in minimum timeframe,” Abbasi said. He added that there is about 40 percent shortage of gas to the domestic consumers in Punjab province. There is also shortage in other provinces too. About 95 percent of the domestic consumers are getting gas; the minister said adding ,however, there are gas pressure problems to the domestic consumers at the end tails of the pipelines.

The minister said that domestic consumers are their top priority and the government wants to take the issue of the gas provision to domestic consumers to the Council of Common interest (CCI). He claimed that the government would be able to control gas shortage during next winter.

Regarding sanctions on the Russian company to which the contract of laying South-North gas pipeline in Pakistan has been awarded, the minister said that sanctions are the routine thing and if the company has been slapped with sanction from the United States, the other Russian company will come forward to complete the task, however Pakistan government has not been formally conveyed about this development. It is built operate and transfer (BOT) project.

Minister said that there is enormous potential of shale in Pakistan, we have the technology to bring it out, but the issue is supply of water to it and then disposal of contaminated water. And for this price determination is also an issue.

“We will be going to get passed the gas theft and recovery bill from the joint session of the parliament,” the minister said. Earlier the bill was passed by Denate but was rejected by the National Assembly, he added. Minister said that the Khyber Pakhtunkhwa (KPK) government has assured us to cooperate in this regards, as gas is a federal subject.

He said that the Sui gas field is producing 300 to 350mmcf/day and is depleting.

Replying to a query, the minister said that PPL lease, for Sui gas field, has expired and the federal government extended it for one year. “There were some issues earlier but now most of them have been resolved to great extent,” Abbasi said. “Now the government is trying to resolve the remaining issues with the government of Balochistan and soon we will sign a permanent agreement with PPL,” the minister said.

When the minister was asked that when will power outage end in Pakistan, he said, “It’s solution is in gas.” He added that by 2017, the loadshedding will decrease to a large extent and situation will be far better in 2018.

Regarding LNG supply to big housing societies, the minister said there is no problem for government in supplying them gas.

“The Iran-Pakistan (IP) gas pipeline is in snags due to the United States sanctions on Iran. Once these get lifted Pakistan will start work on its side of pipeline, as design, demarcation maps are in hand.”