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Natural gas

Pakistan's Energy Sector Sees Landmark Development with Private Gas Marketing Firm's Entry

Strategic Insights

— 2 min read

Pakistan's energy sector has achieved a significant milestone with the launch of the country's first private gas marketing firm, Universal Gas Distribution Company (UGDC), which began supplying natural gas to industrial clients on October 14, 2025. The development marks a critical step towards liberalising Pakistan's traditionally state-controlled gas market, as the Sui Northern Gas Pipelines Limited (SNGPL) board had granted pipeline access to UGDC after prolonged delays, finalizing the decision on October 9. This breakthrough paves the way for greater private sector participation in Pakistan's gas industry, which is expected to inject much-needed competition and efficiency into the sector.

Key Takeaways:

  • The SNGPL granted pipeline access to UGDC, enabling the company to begin supplying natural gas to industrial clients starting October 14, 2025.
  • The decision by the SNGPL board to grant pipeline capacity to UGDC was finalized on October 9 after prolonged delays.
  • UGDC has been allocated 50 million cubic feet per day (mmcfd) of capacity through SNGPL's pipeline network, including 25 mmcfd on a firm basis until 2033 and an additional 10 mmcfd on an interruptible basis for six months.
  • The company will source gas from the Razgir Gas Field in District Kohat, operated by a consortium comprising MOL Pakistan, OGDCL, PPL, GHPL, and POL.
  • UGDC aims to offer competitive rates by operating on minimal profit margins and target large industrial consumers, many of whom were previously dependent on SNGPL.
  • The approval ends over a year of resistance from SNGPL, which had delayed implementation despite earlier board approval.
  • The Oil and Gas Regulatory Authority (Ogra) had already approved UGDC's Gas Sale and Purchase Agreement (GSPA) in July, subject to several conditions.
  • The country's first private gas marketing firm will source gas from the Razgir Gas Field, which is not subject to the 2012 Exploration and Production Policy's third-party bidding requirements.
  • The entry of private sector players like UGDC is expected to bring much-needed competition and efficiency into Pakistan's gas industry.

Statistics:

  • The UGDC has been allocated 50 mmcfd of pipeline capacity through SNGPL's network.
  • UGDC will source gas from the Razgir Gas Field, which is considered among the most expensive in the country.
  • The company aims to offer competitive rates by operating on minimal profit margins.
  • UGDC will supply gas to industrial clients starting October 14, 2025.

Sources:

  • Sui Northern Gas Pipelines Limited (SNGPL) - notified decision issued on Monday evening.
  • Ghiyas Abdullah Paracha - confirmed that UGDC is going to transport gas to its clients from the early hours of October 14, 2025.
  • Official documents - Petroleum Division clarification that UGDC's gas allocation from the newly discovered Razgir field is not subject to the 2012 Exploration and Production Policy's third-party bidding requirements.
  • Directorate General of Petroleum Concessions (DGPC) - confirmed that under the TAL Petroleum Concession Agreement (PCA), working interest owners are legally allowed to sell their share of gas directly to any buyer, without a competitive bidding process.

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