ISLAMABAD: Pakistan’s natural gas sector is witnessing renewed private sector interest as three new companies have applied for licences to sell natural gas under recently amended policies aimed at liberalising the gas market. The Oil and Gas Regulatory Authority has admitted applications from Blue Gas Private Limited, Essen Gas Marketing and Distribution Limited and Master Marketing International.
The applicants have proposed selling locally produced natural gas by utilising the existing transmission and distribution networks of Sui Northern Gas Pipelines Limited and Sui Southern Gas Company Limited. These arrangements are permissible under the Third Party Access Rules, the Pakistan Gas Network Code and virtual pipeline mechanisms enabled by amendments to the Petroleum Policy 2012.
Ogra has announced that a public hearing on the applications will be held on January 16 and has invited feedback from stakeholders before making a final determination. The move comes as the regulator seeks to operationalise competition in gas sales following years of regulatory inertia.
Although Ogra has already issued around a dozen gas sale licences to private firms, most remain non operational. So far only Universal Gas Distribution Company has successfully executed gas sale and purchase agreements with producers, consumers and transporters and commenced commercial operations.
SNGPL and SSGCL formally lost their exclusive rights over gas sales in 2010. However, weak regulatory frameworks delayed effective third party participation for more than a decade, allowing public utilities to retain dominance until recent reforms.
Momentum accelerated in January 2025 when the Executive Committee of the National Economic Council approved the sale of 35 percent of new gas discoveries to third party entities through competitive bidding. The decision aimed to address liquidity constraints faced by exploration and production companies and attract four to five billion dollars in offshore investment.
Earlier, the Council of Common Interests had authorised E and P firms to sell gas reserves to private buyers and directed the petroleum division to finalise an implementation framework. Despite resistance from gas utilities, the government proceeded with reforms and has since awarded nearly two dozen new onshore and offshore exploration licences to local and international investors.
