Pakistan’s OGDCL Boosts Production Amid Middle East Tensions

Pakistan's state gas producer, OGDCL, plans to increase production to counter reduced supply from the Middle East conflict. The company aims to raise natural gas and crude oil output while exploring reduced LNG terminal regasification. These efforts are spurred by disruptions in regional supply chains due to geopolitical tensions.

In a strategic move addressing supply disruptions from the Middle East, Pakistan's state-run natural gas producer, OGDCL, is set to boost production for the first time in years. The company aims to increase its natural gas output by 5 percent, reaching 865 million cubic feet per day, according to Managing Director Ahmed Lak.

This initiative comes as the country faces high electricity tariffs and escalated rooftop solar use, leading to diminished natural gas demand. The regional tensions have severely impacted OGDCL's operations, forcing it to renegotiate LNG import contracts with Qatar. Recently, Qatar ceased LNG production following Iran's aggressive actions post-U.S.-Israeli conflicts.

Additionally, OGDCL plans to elevate its crude oil output by 14 percent, aiming for 40,000 barrels per day, as geopolitical strife disrupts shipping through the key Strait of Hormuz. Industry sources indicate that a possible reduction in LNG terminal regasification might ease pressure on Pakistan's foreign exchange reserves. Lak stresses the significance of new discoveries, suggesting they could further raise production if market conditions allow.

(With inputs from agencies.)