Oil, Gas and Refinery Sectors - updates

[SoulSpokesman]

@hydrabadi_arab

Hydra bro,

Amazing and a gamechanger if true

Regards

 

[Distant_Observer]

This is game changer for Pakistan economy. Pakistan already produces 3000 MMscfd gas. Taking it to 4000 mean no need for imported gas anymore.

And you know what? Pakistan can take it to 8000 MMscfd and start exporting. Because Pakistan shale gas reserves are staggering 105 Tcf!

https://sdpi.org/sdpiweb/publications/files/Shale_Gas_Viability_and_Prospects_for_Pakistan.pdf

 

[hydrabadi_arab]

@hydrabadi_arab

Hydra bro,

Amazing and a gamechanger if true

Regards

Indeed game changer if economics works out. Now Pakistan just need to figure out how to get out of Iran pipeline deal. Qatar deal will expire in few years.

If there is peace then Iran gas can be exported to India.

 

[Samlee]

This is game changer for Pakistan economy. Pakistan already produces 3000 MMscfd gas. Taking it to 4000 mean no need for imported gas anymore.

And you know what? Pakistan can take it to 8000 MMscfd and start exporting. Because Pakistan shale gas reserves are staggering 105 Tcf!

I Have Been Screaming About This Game Changer Since 2013-15.Back Then Italian Company ENI Offered $10 Billion FDI In Shale Gas And Offered A Price Of $9.5/mmbtu.
But The PML N Government Of That Time Was More Interested In Qatari LNG.This Prioritization Of Imported Energy Over Domestic Reserves Is A Policy For Which Our Economy Hs Paid A Very Heavy Price.

In 2014 The Then Government Said That The Price Demanded By E&P Companies Is $13-14/mmbtu Which Was Unviable For Us.I Remember Writing That This Price Might Be Unviable For The Government But More Than Viable For CNG.If The Demand Of CNG Was Leveraged To Stimulate Deep and Unconventional Natural Gas Reserves.Let CNG Sector Under Their SPV UGDCL Buy Directly From E&P Companies At A Mutually Negotiated Price.At 2008 US Shale Had Prices Of $12-13/mmbtu In The Begining But With Time Prices Fell So Hard That Today There Are Fields Where Breakeven Of Gas Is $2.5/mmbtu.Had We Started In 2013 ,We Would Have Been Saved From The Massive Global Spikes In Oil and Gas Prices In 2022 and Recently Durung Iran-US War

 

[hydrabadi_arab]

I Have Been Screaming About This Game Changer Since 2013-15.Back Then Italian Company ENI Offered $10 Billion FDI In Shale Gas And Offered A Price Of $9.5/mmbtu.
But The PML N Government Of That Time Was More Interested In Qatari LNG.This Prioritization Of Imported Energy Over Domestic Reserves Is A Policy For Which Our Economy Hs Paid A Very Heavy Price.

In 2014 The Then Government Said That The Price Demanded By E&P Companies Is $13-14/mmbtu Which Was Unviable For Us.I Remember Writing That This Price Might Be Unviable For The Government But More Than Viable For CNG.If The Demand Of CNG Was Leveraged To Stimulate Deep and Unconventional Natural Gas Reserves.Let CNG Sector Under Their SPV UGDCL Buy Directly From E&P Companies At A Mutually Negotiated Price.At 2008 US Shale Had Prices Of $12-13/mmbtu In The Begining But With Time Prices Fell So Hard That Today There Are Fields Where Breakeven Of Gas Is $2.5/mmbtu.Had We Started In 2013 ,We Would Have Been Saved From The Massive Global Spikes In Oil and Gas Prices In 2022 and Recently Durung Iran-US War

The deals you see on news papers have no legs to stand on. OGDCL is government company and its investing in pilot shale gas project, if economy works out only then we can expect foreign investment. And hopefully at $7.5 mmbtu as its being planned.

"The Pakistani government rejected ENI's required price of $14/mmbtu, terming it "too much to absorb." At the time, conventional domestic gas in Pakistan cost consumers about $4/mmbtu."

Too hot to handle: Govt rejects shale gas price, terming it ‘too much to absorb’ | The Express Tribune

PPL, Eni have calculated that price should be $14 per mmbtu.

tribune.com.pk

This deal would probably look like another IPP in the long run.

 

[Samlee]

The deals you see on news papers have no legs to stand on. OGDCL is government company and its investing in pilot shale gas project, if economy works out only then we can expect foreign investment. And hopefully at $7.5 mmbtu as its being planned.

"The Pakistani government rejected ENI's required price of $14/mmbtu, terming it "too much to absorb." At the time, conventional domestic gas in Pakistan cost consumers about $4/mmbtu."

Too hot to handle: Govt rejects shale gas price, terming it ‘too much to absorb’ | The Express Tribune

PPL, Eni have calculated that price should be $14 per mmbtu.

tribune.com.pk

This deal would probably look like another IPP in the long run.

No You Don't Get It, CNG Sector Is A Cash Only Business.There Is No Circular Debt In The CNG Sector.Circular Debt Arises When There Is A Single Buyer Model Like The One We Have In Pakistan Where Government Is The Sole Buyer Of Electricity and Gas Produced In The Country.When A Competitive Market Of Buyers and Sellers Exist There Is No Circular Debt.

Please Read Again I Said Allow CNG Sector To Offtake The Shale Gas Directly From The Producers i.e OGDCL,PPL,ENI etc. At A Mutually Agreed Price The Constrained Demand Od Of CNG Back In 2011 Was About 400 mmcfd This Would Have Been Sufficient To Stimulate Shale and Tight Gas Production, Achieve Economies Of Scale I Talked About Earlier

 

[RealNapster]

No You Don't Get It, CNG Sector Is A Cash Only Business.There Is No Circular Debt In The CNG Sector.Circular Debt Arises When There Is A Single Buyer Model Like The One We Have In Pakistan Where Government Is The Sole Buyer Of Electricity and Gas Produced In The Country.When A Competitive Market Of Buyers and Sellers Exist There Is No Circular Debt.

Please Read Again I Said Allow CNG Sector To Offtake The Shale Gas Directly From The Producers i.e OGDCL,PPL,ENI etc. At A Mutually Agreed Price The Constrained Demand Od Of CNG Back In 2011 Was About 400 mmcfd This Would Have Been Sufficient To Stimulate Shale and Tight Gas Production, Achieve Economies Of Scale I Talked About Earlier

Even if for CNG, still it doesn't make sense that you paying more than international price for a gas that is being extracted from your own land.

 

[hydrabadi_arab]

No You Don't Get It, CNG Sector Is A Cash Only Business.There Is No Circular Debt In The CNG Sector.Circular Debt Arises When There Is A Single Buyer Model Like The One We Have In Pakistan Where Government Is The Sole Buyer Of Electricity and Gas Produced In The Country.When A Competitive Market Of Buyers and Sellers Exist There Is No Circular Debt.

Please Read Again I Said Allow CNG Sector To Offtake The Shale Gas Directly From The Producers i.e OGDCL,PPL,ENI etc. At A Mutually Agreed Price The Constrained Demand Od Of CNG Back In 2011 Was About 400 mmcfd This Would Have Been Sufficient To Stimulate Shale and Tight Gas Production, Achieve Economies Of Scale I Talked About Earlier

But $14 was steep back in 2011. Even now it doesn't make sense. But in 2011 is like someone offering $25 mmbtu in 2026.

Govt is planning for $7.5 mmbtu shale gas. Even $9 isn't bad. Because must of this money will stay in Pakistan and investors will take out like 20%. The rest will be spend on extraction cost, labour, taxes, provincial royalty.

Italian company was planning to take out more then half of net profits.

 

[Samlee]

Even if for CNG, still it doesn't make sense that you paying more than international price for a gas that is being extracted from your own land.

It Would Have Been Saving You Billions Of Dollars Which Would Otherwise Be Spent On Imports Of Foreign Oil and LNG.Secondly Shale Boom Would Launch Massive Industrialization Like It Did In The USA Thirdly Global LNG Prices Fluctuate Wildly Back In 2022 LNG Spot Prices Were Upto $70/mmbtu Also ENI and Gunvor Had Defaulted On Their Contracts To Pakistan Aggravating Our Energy Crisis Domestic Means Energy Security and Insulation From Global Volatility.

And Lastly With The Passage Of Time As Shale Gas Production Increases,The Per mmbtu Cost Decreases Significantly Because Economies Of Scale Are Achieved.

 

[Samlee]

But $14 was steep back in 2011. Even now it doesn't make sense. But in 2011 is like someone offering $25 mmbtu in 2026.

Govt is planning for $7.5 mmbtu shale gas. Even $9 isn't bad. Because must of this money will stay in Pakistan and investors will take out like 20%. The rest will be spend on extraction cost, labour, taxes, provincial royalty.

Italian company was planning to take out more then half of net profits.

I Said Allow CNG To Buy It Because Even At $14/mmbtu CNG Would Have Remained Viable vis-vis Petrol and Diesel.With The Passage Of Time As Production Increases Breakeven Costs Decrease.This Is What Happened In USA That Is What We Should Aim For But Unfortunately Noonie Toons Decided To Go For Imported Energy Once Again Making Us Vulnerable To Global Volatility


The Problem Is You and Napster Are Under The Impression That Shale Gas Price Would Remain $14/mmbtu Forever Such Is Not The Case

 

[hydrabadi_arab]

I Said Allow CNG To Buy It Because Even At $14/mmbtu CNG Would Have Remained Viable vis-vis Petrol and Diesel.With The Passage Of Time As Production Increases Breakeven Costs Decrease.This Is What Happened In USA That Is What We Should Aim For But Unfortunately Noonie Toons Decided To Go For Imported Energy Once Again Making Us Vulnerable To Global Volatility

The deal Italian company proposed was like IPP. After federal govt at $14, now its their headache how they recover that in rupees and pay back in $$. Unfortunately just like power plant IPP we don't plan on how we will pay back $ to foreign investors.

And why would CNG buy expensive gas as these were being phased out anyway. It would have been disastrous deal.

 

[Samlee]

The deal Italian company proposed was like IPP. After federal govt at $14, now its their headache how they recover that in rupees and pay back in $$. Unfortunately just like power plant IPP we don't plan on how we will pay back $ to foreign investors.

And why would CNG buy expensive gas as these were being phased out anyway. It would have been disastrous deal.

Now You and I Are Just Running Around In Circles. What Part Of A Direct B2B Don't You Understand?CNG Sector Via Their Special Purpose Vehicle Would Buy It Directly From OGDCL etc. ,It Would Be An IPP If The The Government Gave Sovereign Guarantees There Is No Sovereign Guarantees To What I Was Proposing

And CNG Would Gladly Offtake The Gas Since They Are Already Lowest On The Merit List Of Government When Winter Gas Rationing Starts, Their Supply Is Cut Off First.

BTW Phasing Out CNG Was The Stupidest Decision The Government Could Ever Make.It Only Made Us Dependent On Imported Petroleum and Oil Again Apart From Depriving Thousands Of Workers and Attendants From Gainful Employment