## **Govt Revives Plan to Split SNGPL, SSGCL into Five Gas Companies**
**ISLAMABAD:** The federal government has revived its plan to restructure Pakistan’s gas sector by unbundling **Sui Northern Gas Pipelines Limited (SNGPL)** and **Sui Southern Gas Company Limited (SSGCL) into five separate entities, comprising one national transmission company and four provincial gas distribution companies.
The proposed reforms were reviewed during a meeting on Tuesday between **Ali Pervaiz Malik**, Federal Minister for Petroleum, and **Bolormaa Amgaabazar**, World Bank Country Director for Pakistan.
According to an official statement, the reform framework proposes separating the transmission, distribution, and energy businesses of the two Sui companies to improve operational efficiency and create greater opportunities for private sector participation across the gas value chain.
The Petroleum Division has been directed to prepare a final reform roadmap for the Prime Minister’s approval by the end of August 2026. Following approval, the government plans to implement the reforms in phases while engaging all stakeholders to ensure a smooth transition toward a modern, competitive, and financially sustainable gas sector.
### National Transmission Company Proposed
Under the proposed model, a **National Gas Transmission Company (NGTC)** would be established by combining the transmission assets of SNGPL and SSGCL. Similar to the power sector’s National Grid Company, the NGTC would function as a common carrier, transporting gas for all suppliers and buyers while charging wheeling fees instead of buying or selling gas itself.
The framework also envisages third-party access to the transmission network, allowing private companies to utilize the system. Sources indicate that several major business groups have expressed interest in acquiring stakes in the proposed transmission company through future privatization.
### Four Provincial Distribution Companies
The distribution operations of the two gas utilities would be reorganized into four provincial gas distribution companies. These entities would be established based on technical and commercial considerations, including population, network density, gas demand, operational workload, and efficiency to ensure long-term financial sustainability.
The reforms would also require a pricing mechanism—such as a weighted average sale price equalization system—to address differences in gas costs across regions.
### Previous Opposition and Challenges
The unbundling proposal was previously shelved in 2020 after **KPMG** and the **Oil and Gas Regulatory Authority (OGRA)** raised concerns over its financial and technical viability. They recommended broader consultations with provincial governments and private shareholders before proceeding.
Industry sources said the current proposal continues to face resistance from both SNGPL and SSGCL, as well as their shareholders, who oppose the breakup of the companies and are reluctant to finance the restructuring process.
The Petroleum Division is expected to appoint a transaction adviser to oversee the unbundling exercise. The advisory cost may be financed by the World Bank or shared equally by the two gas utilities, with the expenditure ultimately recoverable through consumer gas tariffs.
Officials also believe the reform plan should be finalized in consultation with provincial governments and receive approval from the **Council of Common Interests (CCI)** before implementation, particularly on issues relating to pricing, cross-subsidies, and the overall structure of the new entities.
Story by Khaleeq Kiani
