ISLAMABAD: As around a dozen existing licensees mostly remain non-operational, three new companies have applied for licences to sell natural gas following policy changes that allow greater private participation in the gas network.
The Oil and Gas Regulatory Authority (Ogra) has formally admitted applications from Blue Gas (Pvt) Ltd, Essen Gas Marketing & Distribution Ltd and Master Marketing International for licences to undertake the regulated activity of natural gas sales.
In their applications, the companies said they would use the pipeline networks of the two public-sector utilities — Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Company Ltd (SSGCL) — to transport gas produced from local fields to consumers as permitted under the Third-Party Access Rules, the Pakistan Gas Network Code and virtual networks. Such arrangements are allowed under the 2012 petroleum policy, recently amended by the federal cabinet.
Ogra has scheduled a public hearing for Jan 16 and invited comments from stakeholders before deciding on the grant of licences.
The regulator has already issued about a dozen licences to private firms for the sale of natural gas, but only one company — Universal Gas Distribution Company (UGDC) — has been able to practically enter into gas sale and purchase agreements with producers, consumers and transporters like SNGPL and begin commercial operations.
SNGPL and SSGCL, which enjoyed a legal monopoly over gas sales and distribution for decades, formally lost exclusivity in 2010. However, the enabling legal and regulatory framework for third-party participation remained weak for much of the following decade, effectively preserving their dominance until last year.
In January 2025, the Executive Committee of the National Economic Council (Ecnec), led by Deputy Prime Minister Ishaq Dar, approved the sale of 35 per cent of new gas finds to third-party private entities through a bidding process. The move was aimed at easing liquidity challenges on exploration and production (E&P) companies and attracting $4-5 billion in fresh investment in offshore exploration.
In January 2024, the Council of Common Interests (CCI) — comprising the chief ministers of all four provinces — allowed E&P companies to sell reserves to third parties and directed the petroleum division and gas utilities to develop a framework for the sale of 35pc of unallocated gas to third parties and get it approved by the Ecnec.
The two public-sector gas utilities had been delaying the implementation and lobbied to reverse the CCI decision for almost a year, but Mr Dar-led Ecnec finally concluded that neither the council’s decision could be reversed nor a prospective $4-5bn investment in offshore blocks could be postponed. The government has since awarded around two dozen exploration licences, both in offshore and onshore basins, to local and international firms.
