ISLAMABAD:

The federal government has ended the decades-long monopoly of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) in Pakistan’s gas market as the Executive Committee of the National Economic Council (ECNEC) has approved a framework for the sale of gas to the private sector.

According to industry sources, the government has ended the monopoly of SNGPL and SSGCL in the gas market of the country as the ECNEC considered the summary dated 23rd November 2024 submitted by the petroleum division titled “Framework for 3rd Party Sale of Natural Gas under amended PP 2012” and granted approval to the framework for the sale of gas to the third party in view of the decision of the Council of Common Interests (CCI) .

Earlier, on January 29th, 2024, CCI, in its decision declared that Exploration and Production (E&P) shall have the right to sale up to 35pc of their share of pipeline specification gas to third party having OGRA license, through competitive process, without approval of the government or any of its entity, provided that the price (s) charged from third parties would not be less than the wellhead gas prices under Petroleum Policy 2012 for the respective zone. The CCI further directed the petroleum division to prepare a framework and place before the ECNEC and accordingly, the requisite framework was developed and placed before the ECNEC.  

“After detailed deliberation at the various levels, the framework was placed before the ECNEC with an additional proviso that there shall be a cap of 100 Million Cubic Feet per Day (MMCFD) gas to be sold to 3rd party private sector for each year. This cap shall be reviewed every year,” said sources.

“And, ECNEC approved the framework submitted by the petroleum division,” the sources added.

According to sources, this landmark decision is expected to unlock $5 billion in new investments within the oil and gas sector. It aims to liberalize the upstream oil and gas market, creating a dynamic and competitive environment. By increasing revenue for E&P companies, the policy seeks to incentivize enhanced exploration and production activity, ensuring greater energy availability domestically.

The approval of the framework had been delayed for eight months due to resistance from import lobbies. However, the intervention of Prime Minister Shehbaz Sharif, Deputy Prime Minister Ishaq Dar, and the Special Investment Facilitation Council (SIFC) ensured its eventual clearance.

The policy is also designed to address Pakistan’s longstanding gas sector circular debt, which currently stands at PKR 900 billion. By allowing third-party sales, the government aims to enhance efficiency, attract private sector participation, and foster financial sustainability in the energy sector.

According to OGRA spokesman, Imran Ghaznavi, exclusivity was to the extent of distribution and selling of gas to consumers connected to utilities  system on or before and was valid till He said that the gas market was liberalized for supply of gas to  new consumers and for existing consumers on He said all the Transmission, Distribution and Sales licensees are regulated in line with provisions of OGRAO, 2002, relevant rules, regulations , License terms & conditions.

Only one company obtained distribution licenses i. e PIEDMC. So far, 20 nos NG Sales licenses have been issued to different Companies including private entities under the Rules, said OGRA spokesman. 

 As per sources, the approval of the framework had been delayed for eight months due to resistance from import lobbies. However, the intervention of Prime Minister Shehbaz Sharif, Deputy Prime Minister Ishaq Dar, and the Special Investment Facilitation Council (SIFC) ensured its eventual clearance.

It is pertinent to mention that this move is expected to significantly boost domestic energy production, reduce reliance on imports, and strengthen the country’s energy security. It represents a pivotal step towards modernizing Pakistan’s energy market and ensuring a more sustainable and resilient economic future.