[Premium] Poland Expands Pakistan Output

Polish state PGNiG will gradually raise its gas output in Pakistan, bringing on stream another three fields under the Kirthar licence, a company spokesperson told NGW mid-April. It is also working towards the full-scale development of the two fields discovered so far.  

PGNiG has two fields in Pakistan: Rehman and Rizq. The latter was discovered in 2015 by the Rizq-1 well brought onstream in November 2016, followed by Rizq-2 which came onstream February 2018. But that will still only take PGNiG’s overall operated Pakistani production to 1mn m³/d of gas (some 0.85mn m³/d high-methane equivalent). PGNiG holds a 70% interest in the Kirthar licence with the other 30% held by Pakistan Petroleum.

“Our company has applied to the Pakistani government for the “strategic partner” status, which would enhance PGNiG’s position on the local market and give us right to secure licences directly,” the spokesperson said.

MoU with Mari Petroleum

Last month, PGNiG signed a memorandum of understanding to forge a strategic partnership with the second largest gas producer in Pakistan, Mari Petroleum. The MoU provides for the parties’ co-operation in the upstream segment within and outside of Pakistan. It also envisages analysis of potential joint ventures in exploration and production, including appraisal and development of Pakistani shale gas potential.

“PGNiG collaborative partnership with Mari Petroleum will raise our visibility in the local market, helping us gain access to attractive projects. This is not our first partnership with a local company. PGNiG has been already successfully co-operating with Pakistan Petroleum in our upstream activities in Pakistan. A partnership with another Pakistani company will strengthen our presence locally. The primary objective of this co-operation is to collaboratively evaluate future potential business opportunities in upstream exploration and production projects in Pakistan. Both companies will be able to benefit from exchange of technical expertise,” the spokesperson said.

Mari Petroleum is one of the major petroleum exploration and production companies in Pakistan and the country’s second largest gas producer, with a 17% market share. The company operates Mari, Pakistan’s largest gas field, in the Sindh province in the southeastern part of the country.

Unconventional hydrocarbon exploration is on the cards as well, given PGNiG’s expertise in shale gas and tight gas. However, precise areas for the potential co-operation have not yet been selected and both companies will be working on the details in the coming months.

In terms of geographical focus, PGNiG will continue to concentrate on Sindh province for the moment. “We are exploring for, and producing, natural gas in Sindh province where Mari Petroleum is also operating. This gives both companies many possibilities to work closely with each other. Our company is always interested in exploiting further opportunities, but it is too early to say about our plans with regards to other provinces of Pakistan,” the spokesperson said.

Positive about local E&P sector

Demand for natural gas is expanding in Pakistan, turning Pakistan into an importer of LNG as local production has not been able to catch up. Although the Pakistani government has said that LNG will play an important role in country’s energy mix, it has at the same time said that boosting local output is a priority as well. PGNiG also seems positive about the local E&P industry.

“Pakistan is a very good market with business-friendly regulations for E&P companies. The country has large natural gas resources and large demand. So, the potential for E&P operations is big,” the spokesperson said.