According to ministry officials, Pakistan has passed a new tight gas exploration policy that offers improved incentives for E&P companies, according to a report by Platts.

The new program, which is aimed at augmenting the country’s gas deficit, has been implemented in hopes to attract additional investments from foreign companies. Currently, the country’s gas shortfall is approximately 1-1.2 billion cubic feet per day (Bcf/d).

The policy offers exploration companies 40-50% higher prices for gas when compared to the 2009 price of $4.26/Btu, according to the report. Companies that are able to extract the unconventional reserves within two years will be eligible for the largest offering of 50%.

Additionally, the country is offering field leases for 40 years in comparison to the original offer of 30 years in 2009.

“Tight gas is a more feasible option for the economy,” said Umer Bin Ayaz, a research analyst for JS Global Equities. “Even after giving additional incentives, the cost of gas will be less than imported gas and there will be no burden on foreign exchange reserves.”

According to the report, Pakistan has a gas potential of 40 trillion cubic feet (Tcf). Currently, Pakistan’s current recoverable gas reserves are approximately 27 Tcf.