The Oil and Gas Development Company Limited (OGDCL) has initiated gas production from a newly drilled well in Dera Bugti, Balochistan, marking a significant boost to Pakistan’s natural gas supply.

The Uch-35 well is producing approximately five million standard cubic feet per day (MMSCFD) of gas, which has been successfully integrated into the Uch Gas Processing Plant to streamline distribution.

In a communication to the Pakistan Stock Exchange, OGDCL confirmed its full ownership of the Dera Bugti well.

This development comes as Pakistan shifts its focus to domestic gas consumption, having recently decided to halt the import of liquefied natural gas (LNG) in light of reduced electricity usage.

Documentation from the Ministry of Petroleum indicates that redirecting LNG to domestic consumers will require an investment of Rs163 billion.

With the closure of captive power plants, surplus LNG of 150 million cubic feet per day (MMcfd) is expected, while the gas sector is currently generating Rs400 billion in revenue from these plants.

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The government aims to tackle the circular debt issue by increasing gas tariffs and eliminating the disparity between the tariffs of imported LNG and local gas, which are Rs3,500 and Rs1,550 per MMcfd, respectively.

The expected revenue from this adjustment is around Rs200 billion, alongside planned tariff increases for fertilizer companies.