Pakistan approves Mari gas allocation for 3 fertilizer plants

Pakistan’s government has approved the allocation and pricing of natural gas from the Ghazij and Shawal discoveries in the Mari gas field to three fertilizer plants, according to a disclosure issued under the Securities Act, 2015 and Pakistan Stock Exchange regulations.

Under the decision, gas from the Mari field in Daharki in Sindh’s Ghotki district will be allocated to Fauji Fertilizer Company’s Port Qasim plant in Karachi, Fatima Fertilizer’s Sheikhupura plant and Agritech’s Daud Khel plant.

Fauji Fertilizer Company (Port Qasim) will receive 104 million cubic feet per day (mmscfd) of raw gas, translating into 80 mmscfd of processed gas. Fatima Fertilizer will be allocated 68 mmscfd of raw gas, equivalent to 52 mmscfd of processed gas, while Agritech will receive 50 mmscfd of raw gas, or 38 mmscfd of processed gas.

The raw gas will be delivered at designated delivery points within the Mari gas field. Pricing at the delivery point will be based on the applicable wellhead price as notified by the Oil and Gas Regulatory Authority (OGRA) from time to time. The fertilizer companies will enter into bilateral gas sale and purchase agreements with Mari Energies Ltd.

The fertilizer plants will also be required to install gas processing and compression facilities to inject processed gas into the Sui gas companies’ network. They will enter into third-party access arrangements with Sui Northern Gas Pipelines Ltd. (SNGPL) and Sui Southern Gas Company Ltd. (SSGCL) under the Third Party Access Rules, 2018 and the Pakistan Gas Network Code. For supplies to the Port Qasim plant, SNGPL and SSGCL will also make gas swap arrangements.

The government has also allowed Mari Energies to supply any surplus volumes from the Ghazij and Shawal reservoirs to other customers, including SNGPL and SSGCL, as swing gas on an as-available basis. In the event of natural depletion of the HRL gas reservoir supplying fertilizer plants, MariEnergies may backfill depleted volumes of existing consumers from the Ghazij and Shawal reservoir.

Separately, the government approved the de-allocation of 110 MMscfd of gas from the HRL reservoir in the Mari field that had previously been allocated to GENCO-II, a state-owned power producer. It also increased the allocation to Engro Fertilizer’s base plant from 26 mmscfd to 105 mmscfd from the same reservoir.

In addition, an earlier allocation of up to 110 mmscfd of gas to SNGPL from Mari Deep, which had expired in June 2024, has been regularized and reallocated to the gas utility.