The Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) have expressed reservations over the government’s decision to allow third parties to sell up to 35% of their gas.
However, officials from the Petroleum Ministry have clarified that this move will not cause any financial loss to the Sui companies.
According to the Petroleum Ministry, the Sui companies currently have 1,500MMCFD (million cubic feet per day) of gas available, while the third-party sales will account for only 2.5% of this volume. Officials further explained that this decision will also lead to a 2.5% increase in the annual tariff of the Sui companies, ensuring financial stability.
To attract investment in gas production, the government has introduced a new policy that imposes restrictions on gas sales by production companies. Under this framework:
- Production companies will not be allowed to sell more than 100MMCFD of gas annually for three years.
- The third-party gas agreement will only apply to newly discovered gas reserves.
- Gas from existing fields will continue to be supplied to Sui companies, ensuring stability in their operations.
- Additionally, 65% of gas from new discoveries will still be allocated to Sui companies.
