Jhal Magsi gas field to cut LNG import costs
The recently revived Jhal Magsi gas field, operated by Oil and Gas Development Company Limited (OGDCL), is likely to save Pakistan about $298 million annually through the substitution of imported regasified liquefied natural gas (RLNG).
The savings have been estimated based on the prevailing LNG import price of $12.72 per million British thermal units (mmBtu). With its supply of 14 million standard cubic feet per day (mmscfd) of natural gas and 45 barrels per day (bpd) of condensate, the Jhal Magsi gas field has emerged as a symbol of resilience and a milestone in Pakistan's drive towards energy self-reliance.
OGDCL has successfully commissioned the Jhal Magsi field, located in Balochistan, bringing it online after nearly a decade of dormancy. The field is now supplying 14 mmscfd of sales-quality natural gas and 45 bpd of condensate to the transmission network of Sui Southern Gas Company (SSGC), a development that marks a significant boost to Pakistan's energy sector at a time of rising demand and costly fuel imports.
Development activities began in February 2024, led by the projects department. OGDCL hired Gasco Engineering, a local engineering, procurement, fabrication and construction firm, to provide critical support for rehabilitating the 10-year-old equipment and machinery. Gasco ensured that gas processing facilities were upgraded in line with modern safety and performance standards.
The revival of the Jhal Magsi field is seen as a model for unlocking the hydrocarbon resources in Pakistan. The country has more than 22 identified marginal or stranded fields with estimated reserves between 0.5 and 1 trillion cubic feet. The success at Jhal Magsi demonstrates how strong government backing, innovative pricing policies and effective execution can revive dormant projects, reduce reliance on imported energy and stimulate upstream investment in remote areas.
Located in the remote Jhal Magsi district of Balochistan, the gas field faced prolonged technical, security and logistical challenges. In 2013, OGDCL initiated procurement activities and invested $15.8 million in plant, equipment and machinery. However, the project stalled when SSGC was unable to construct a 98-kilometre pipeline from Jhal Magsi to the Shori Valve Assembly. In January 2017, OGDCL declared force majeure under Rule 72 of the Pakistan Petroleum Exploration and Production Rules 1986, effectively putting the project on hold.
Several attempts were made to allocate Jhal Magsi gas to third parties, but the project was deemed commercially unviable under prevailing policies. On December 31, 2022, the field was certified by an independent consultant as a marginal gas field, confirming that additional investment was needed due to its distance from infrastructure.
The ECC, on December 15, 2022, approved the transition from the Petroleum Policy of 1997 to the Marginal Field Gas Pricing Policy, which offered incentives such as higher wellhead prices and faster cost recovery.
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