ISLAMABAD: Despite nearly a dozen private firms holding licences to sell natural gas but remaining mostly non-operational, three new companies have applied to enter Pakistan’s gas market following recent policy reforms aimed at increasing private-sector participation.
The Oil and Gas Regulatory Authority (Ogra) has formally admitted licence applications from Blue Gas (Pvt) Ltd, Essen Gas Marketing & Distribution Ltd, and Master Marketing International to undertake the regulated activity of natural gas sales.
In their submissions, the applicants stated that they intend to utilise the existing pipeline infrastructure of the two public-sector utilities—Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL)—to transport locally produced gas to end consumers. This is permitted under the Third-Party Access Rules, the Pakistan Gas Network Code, and the concept of virtual pipelines, as provided for in the 2012 Petroleum Policy, recently amended by the federal cabinet.
Ogra has scheduled a public hearing on January 16 and invited feedback from stakeholders before taking a decision on the grant of licences.
The regulator has already issued around a dozen gas sale licences to private entities; however, only Universal Gas Distribution Company (UGDC) has so far managed to execute gas sale and purchase agreements with producers, consumers, and transporters such as SNGPL, and commence commercial operations.
Although SNGPL and SSGCL formally lost their exclusive rights over gas sales and distribution in 2010, weak legal and regulatory frameworks for third-party access effectively preserved their dominance for much of the past decade. Meaningful progress towards market liberalisation began only last year.
In January 2025, the Executive Committee of the National Economic Council (Ecnec), chaired by Deputy Prime Minister Ishaq Dar, approved the sale of 35 per cent of new gas discoveries to third-party private entities through a competitive bidding process. The decision was intended to ease liquidity pressures on exploration and production (E&P) companies and attract $4–5 billion in new investment, particularly in offshore exploration.
Earlier, in January 2024, the Council of Common Interests (CCI)—comprising the chief ministers of all four provinces—allowed E&P companies to sell gas reserves to third parties and directed the petroleum division and gas utilities to develop a framework for selling 35pc of unallocated gas to private buyers, subject to Ecnec approval.
Despite resistance and delays by the two state-owned gas utilities, which lobbied for nearly a year to reverse the CCI decision, the Dar-led Ecnec ultimately concluded that neither the policy decision nor the potential multi-billion-dollar investment in offshore exploration could be deferred. Since then, the government has awarded around two dozen exploration licences in both offshore and onshore basins to local and international companies.
Story by Khaleeq Kiani
