With rising energy demands and dwindling conventional natural gas reserves, Pakistan’s energy security has become a pressing issue. The country’s potential for unconventional natural gas resources, such as shale gas and tight gas, has drawn increased attention over recent years. Discoveries of substantial shale gas and tight gas deposits have fueled optimism for Pakistan’s energy future. While this potential is significant, tapping into these unconventional reserves presents both opportunities and challenges that Pakistan must navigate with caution.
With rising energy demands and dwindling conventional natural gas reserves, Pakistan’s energy security has become a pressing issue. The country’s potential for unconventional natural gas resources, such as shale gas and tight gas, has drawn increased attention over recent years. Discoveries of substantial shale gas and tight gas deposits have fueled optimism for Pakistan’s energy future. While this potential is significant, tapping into these unconventional reserves presents both opportunities and challenges that Pakistan must navigate with caution.
There are three main types of unconventional natural gas: tight gas, found in low-permeability sandstone rocks; shale gas, located within shale rocks; and coal seam gas, extracted from coal seams. Each of these gas types requires distinct extraction methods and processes to be retrieved in commercially viable quantities. Shale gas and tight gas are particularly distinguished by the geological formations in which they are found and the specific methods used for extraction.
Shale gas exists within fine-grained sedimentary rocks rich in organic material, known as shale formations. These formations are typically soft but exhibit very low permeability, meaning that gas cannot readily flow through the rock and remains trapped within its tiny pores. Tight gas, by contrast, is usually found in denser sandstone or limestone formations, where fewer interconnected pores make it difficult for the gas to flow naturally to the surface. Both shale and tight formations may also contain oil, referred to as shale oil and tight oil, respectively.
Globally, shale gas and oil reserves are abundant, with an estimated 7,299 trillion cubic feet (tcf) of shale gas and 345 billion barrels of shale oil technically recoverable. These quantities account for 32 per cent of the world’s natural gas and 10 per cent of its crude oil reserves. Pakistan ranks 19th out of 41 countries with shale hydrocarbon reserves, with an estimated 105 tcf of shale gas, and ninth in shale oil resources, with nine billion barrels. According to a later study by the US Energy Information Administration (EIA), Pakistan has inferred shale resources of 586 tcf of shale gas and 58 billion barrels of oil in place. These considerable shale gas reserves are primarily located in the Lower Indus Basin, encompassing parts of Sindh, southern Punjab, and eastern Balochistan. Pakistan also holds between 35 and 70 tcf of tight gas resources, ranking 30th globally in tight gas reserves.
These figures signify a substantial opportunity to meet Pakistan’s future domestic energy needs and reduce its reliance on costly imported liquefied natural gas (LNG). However, unlike conventional natural gas, shale gas is embedded within dense rock formations and requires advanced extraction techniques such as hydraulic fracturing (fracking) and horizontal drilling. These technologies have transformed the energy landscapes in countries like the US and UK but remain relatively new to Pakistan, bringing unique challenges, including high costs and environmental concerns.
The state-owned Oil & Gas Development Company Ltd (OGDCL) has taken pioneering steps to evaluate, explore, and develop shale gas reserves in Pakistan. The company invested $30 million in the first shale gas well, KUC-1, launched as a pilot project in 2020 in the Kunnar Mining Lease area of Hyderabad District, Sindh. Initial vertical and horizontal drilling and hydraulic fracturing operations at the KUC-1 well have been successfully completed, with shale production scheduled to begin in 2026 after reservoir evaluation. The Sembar formation in the Kunnar-Pasakhi region of Sindh holds the richest potential for shale hydrocarbon resources.
Developing a shale gas industry in Pakistan could generate new economic opportunities, including job creation, infrastructure development, and increased industrial activity. It could also attract foreign investment, fostering economic growth. Additionally, shale gas development would diversify Pakistan’s energy mix, decreasing dependence on a single energy source and enhancing resilience against supply disruptions. The successful exploitation of shale gas reserves could drive substantial economic activity. However, the global energy market is constantly evolving, with oil and gas prices fluctuating. For Pakistan’s shale gas industry to thrive, it will need to be competitive on a global scale, which may be challenging in a market dominated by established players.
Despite the promising potential, several challenges need to be addressed. Extracting shale gas requires sophisticated technology and substantial investment, and the high upfront costs may discourage some investors, particularly in a country grappling with economic difficulties. Pakistan’s limited experience with shale gas extraction will necessitate substantial reliance on foreign expertise. Moreover, hydraulic fracturing is associated with various environmental issues, including water contamination, excessive water consumption, and induced seismicity. Addressing these risks will require robust environmental regulations and effective enforcement to mitigate long-term harm.
The development of a shale gas industry also demands extensive infrastructure, including pipelines, processing facilities, and storage capabilities. Pakistan’s existing energy infrastructure is currently inadequate for the demands of shale gas production, making substantial upgrades and investment necessary. Local communities may resist shale gas development, particularly in areas where water resources are scarce or where environmental risks are perceived to be high. Public engagement and transparent communication will be crucial in addressing these concerns.
Shale gas extraction is generally more expensive due to the extensive use of hydraulic fracturing and horizontal drilling. The costs are driven by the need for advanced technology and the energy-intensive nature of the extraction process. While tight gas extraction may be somewhat less costly, especially in formations requiring less intensive fracturing, it still remains more expensive than conventional gas extraction.
Environmental concerns surrounding shale gas extraction, such as high water usage, potential groundwater contamination from fracking fluids, and induced seismicity, are significant. Although tight gas extraction faces similar environmental risks, the impact may be slightly less severe in formations that require less fracturing. Nonetheless, issues related to water use and contamination remain critical.
Pakistan does not have a formal shale gas policy at present, but the government is actively working on developing one. This policy is anticipated to focus on facilitating exploration and ensuring that the necessary technology and infrastructure are available to exploit shale gas resources. The policy is expected to attract both domestic and international investment, creating a favourable environment for shale gas exploration and production. However, the success of Pakistan’s shale gas industry will ultimately depend on a coordinated effort among the government, private sector, and international partners.
The writer is a retired chairman of the State Engineering Corporation and former member (PT) of the Pakistan Nuclear Regulatory Authority.
