Report by Engineering Post
Universal Gas Distribution Company ( UGDC) is Pakistan’s first private concern which has quite successfully injected gas into the Sui Northern Gas Pipelines Limited (SNGPL) network and thus marked a historic breakthrough in the private sector’s participation in gas distribution.
According to industry sources, the move was expected to generate additional revenue of around Rs 20 billion while helping to control Pakistan’s mounting circular debt in the gas sector. Petroleum Division sources on being contacted have confirmed that SNGPL has agreed to allocate 25 million cubic feet per day (MMCFD) on a firm basis valid until 2033 under the existing access agreement, along with an additional 10 MMCFD on an interruptible basis for 6 months. UGDC has started supplying gas from MOL gas fields into the SNGPL network to help it serve its industrial consumers.
UGDC was established to bridge the gap between industrial gas consumers and Liquefied Natural Gas (LNG) importers under the Third Party Access (TPA) rules which allow the private sector to utilize excess pipeline capacity in the state-run networks. Industry sources have hailed the decision describing it as a positive signal for market liberalization stating further that it will also strengthen investors confidence and encourage private LNG investments to address chronic supply shortfalls.
This development has taken place after the Council of Common Interests (CCI) had approved amendments to the Exploration and Production (E&P) Policy 2012 in January 2024 allowing E&P companies to sell up to 35 percent of their pipeline-spec gas to licensed private buyers through competitive processes, which was previously only being bought underfunded State-Owned Enterprises (SOEs).
