ISLAMABAD: Prime Minister’s Special Assistant Nadeem Babar on Tuesday called for closure of the country’s existing petroleum refineries for being obsolete and said the shale gas exploration in the country would begin next month.

Speaking at the inaugural session of the Annual Technical Symposium and Exhibition of the oil and gas companies, Babar said “the existing technology being utilised in the country’s refineries is obsolete and such refineries need to be closed down entirely or phased out, rendering the current refining methods outdated”.

On its part, he said the government was working towards setting up two new major refineries and ensuring upgradation of another – Pakistan Refinery Ltd at Karachi — with the support of the international investors from the Middle East and China.

He said the country’s oil import bill amounted to about $16bn that was unsustainable and hence it was important for both the private sector and the government to take steps to address the challenge.

Proposes upgradation or phasing out of refineries using obsolete technology

He said the private sector should improve their refining technologies and take benefit from renewable energy policy of the government to reduce reliance on expensive imported fuels.

The two-day session is organised by the Society of Petroleum Engineers and more more than 30 oil and gas companies participated in exhibition and displayed their activities. Babar said the state-run Oil and Gas Development Company Ltd will commence shale gas exploration activities by next month.

A few years ago, the US Energy Information Administration (EIA) had reported confirmed recoverable reserves of around 200 trillion cubic feet of natural gas and around 58 billion barrels of oil in Pakistan shale structure — many times larger than existing conventional gas reserves of around 20 TCF and 385 million barrels of oil.

However, the production cost was estimated by the state-owned exploration firms to be over $10 per million British Thermal Unit – considered at the time as economically unviable because of lower global oil prices at the time.

He said the separation of distribution and transmission business of both the state-run gas utilities of Sui Northern Gas Pipeline Ltd and Sui Southern Gas Company would be completed in two years. The bifurcation is part of the ongoing economic bailout programme of the International Monetary Fund.

Babar said Pakistan was taking tangible steps towards implementation of key infrastructural reforms in the oil and gas sectors. Talking about the adverse energy mix, he said the government was targeting cheaper and cleaner energy addition of about 8000MW over the next 5-7 years.

About some positive trends, he said the country’s energy market will witness major transition in the near future as the government was awarding around 35-40 petroleum exploration and production blocks to enhance domestic production.

He said that since local production of natural gas was declining at the rate of 5-7pc a year, the government would continue to import liquefied natural gas to cater to local demand.

Published in Dawn, November 20th, 2019