ISLAMABAD: A gas field discovered in Balochistan in 1998 and abandoned for poor economics has started partial flows into the system.

An official of Mari Gas Company which operates the field told Dawn that the gas field was required to achieve full load supply of 20 million cubic feet per day (MMCFD) before November 30, 2014 under the agreement.

The field has estimated reserves of about 77 billion cubic feet (BCF), and may last for 15 years at production level of 20 MMCFD. However, the commercial life of the field could decline when production touches 4-5 MMCFD or increase if gas pressure remains intact and go up with more finds.

The official said the company was currently contributing gas to the national transmission system on trial basis under an interim commissioning period during which gas supplies are made without specifications agreed and quantities committed.

This means the gas quality and quantities can fluctuate during the testing phase and production price is about 30 per cent cheaper for three months.

An international consortium led by Premier Kufpec the United Kingdom had discovered gas reserves at Zarghun South-1 well followed by another well (Zarghun South-II) in 2000 but abandoned its development due to poor commercial viability involving $34 million cost and over 64-kilomter pipeline through rugged terrain required to link the well to main transmission system near Quetta.

A new consortium led by Mari Petroleum took over the field in October 2003 and attempted to hire engineering, procurement and construction (EPC) contractors but even the reduced cost of $31 million for a refurbished dehydration and purification plant could not transform the project commercially viable.

An in-house arrangement without recourse to EPC contract, however, resulted in setting up of gas gathering, purification and dehydration plant at a cost of $21 million. Under a gas sales and purchase agreement of September 2013 with Sui Southern Gas Company Limited (SSGCL), the gas field has to achieve commercial operations by November 30, 2014 with 20 MMCFD supplies.

Led by Mari Petroleum, Jura Energy of Canada and Government Holdings Limited is the joint venture operators of the Zarghun South Field in Balochistan.

About 60 BCF out of total 77 BCF reserves at Zarghun South field are described as tight gas, attracting production price of about $6.75 per MMBTU (million British Thermal Unit). It has an attractive heating value of about 900 BTU (British Thermal Unit).

The field spreads over 120 square kilometer of Bolan block area in Sulaiman Fold and Thrust Belt of Middle Indus Basin, about 64 kilomters off Quetta.

Published in Dawn, September 3rd, 2014