ISLAMABAD: Pakistan could face a financial penalty of $18 billion, said a senior government functionary while briefing the Public Accounts Committee (PAC) of the National Assembly on Wednesday, if it failed to implement a pipeline project involving Iran on time.
The two countries reached a preliminary agreement to build a pipeline in 1995 to help Pakistan import natural gas from Iran.
The project originally planned to involve India as well, though the administration in New Delhi pulled out in 2009 due to pricing and security issues.
Briefing the committee over the issue, petroleum division secretary Muhammad Mahmood said the government had discussed the issue with the United States, which has imposed sanctions on Iran, while seeking relief.
“The members of the committee asked how much penalty could be imposed on Pakistan for not completing the Iran gas pipeline on time,” reported the Express Tribune newspaper. “The secretary petroleum responded that as per the agreement, the penalty could be $18 billion. He also remarked that they have asked the US ambassador to either give them permission to go ahead with the project or give them money to pay the fine.”
The committee instructed the foreign ministry to discuss the situation with the US envoy to the country.
Pakistan has been trying to explore different options to import energy products at discounted rates from the international markets to reduce its import bill amid mounting financial challenges.
According to official figures, the country has already imported energy products worth $10.6 billion during the first seven months of the current fiscal year.
Last year, its petroleum import bill stood at $23.3 billion, which was 105 percent higher than the year before that.
Iran may fine Pakistan $18 billion for delaying joint pipeline project — official
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Iran may fine Pakistan $18 billion for delaying joint pipeline project — official
- The two countries signed a preliminary agreement to carry out the project in 1995 to help Pakistan import gas from Iran
- The government has taken up the issue with US authorities, who have imposed sanctions on Tehran, while seeking relief
Pakistan’s OGDC ramps up unconventional gas plans
- Pakistan has long been viewed as having potential in tight and shale gas but commercial output has yet to be proved
- OGDC says has tripled tight-gas study area to 4,500 square km after new seismic, reservoir analysis indicates potential
ISLAMABAD: Pakistan’s state-run Oil & Gas Development Company is planning a major expansion of unconventional gas developments from early next year, aiming to boost production and reduce reliance on imported liquefied natural gas.
Pakistan has long been viewed as having potential in both tight and shale gas, which are trapped in rock and can only be released with specialized drilling, but commercial output has yet to be proved.
Managing Director Ahmed Lak told Reuters that OGDC had tripled its tight-gas study area to 4,500 square kilometers (1,737 square miles) after new seismic and reservoir analysis indicated larger potential. Phase two of a technical evaluation will finish by end-January, followed by full development plans.
The renewed push comes after US President Donald Trump said Pakistan held “massive” oil reserves in July, a statement analysts said lacked credible geological evidence, but which prompted Islamabad to underscore that it is pursuing its own efforts to unlock unconventional resources.
“We started with 85 wells, but the footprint has expanded massively,” Lak said, adding that OGDC’s next five-year plan would look “drastically different.”
Early results point to a “significant” resource across parts of Sindh and Balochistan, where multiple reservoirs show tight-gas characteristics, he said.
SHALE PILOT RAMPS UP
OGDC is also fast-tracking its shale program, shifting from a single test well to a five- to six-well plan in 2026–27, with expected flows of 3–4 million standard cubic feet per day (mmcfd) per well.
If successful, the development could scale to hundreds or even more than 1,000 wells, Lak said.
He said shale alone could eventually add 600 mmcfd to 1 billion standard cubic feet per day of incremental supply, though partners would be needed if the pilot proves viable.
The company is open to partners “on a reciprocal basis,” potentially exchanging acreage abroad for participation in Pakistan, he said.
A 2015 US Energy Information Administration study estimated Pakistan had 9.1 billion barrels of technically recoverable shale oil, the largest such resource outside China and the United States.
A 2022 assessment found parts of the Indus Basin geologically comparable to North American shale plays, though analysts say commercial viability still hinges on better geomechanical data, expanded fracking capacity and water availability.
OGDC plans to begin drilling a deep-water offshore well in the Indus Basin, known as the Deepal prospect, in the fourth quarter of 2026, Lak said. In October, Turkiye’s TPAO with PPL and its consortium partners, including OGDC, were awarded a block for offshore exploration.
A combination of weak gas demand, rising solar uptake and a rigid LNG import schedule has created a surplus of gas that forced OGDC to curb output and pushed Pakistan to divert cargoes from Italy’s ENI and seek revised terms with Qatar.
