Staff Report
ISLAMABAD: The Cabinet Committee on Energy (CCoE) is likely to approve a proposal allowing Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) to process long-pending Re-gasified Liquefied Natural Gas (RLNG) connection requests at Oil and Gas Regulatory Authority (OGRA)-determined tariffs, in a move aimed at easing surplus LNG absorption and addressing millions of pending applications.
According to industry sources, the upcoming CCoE meeting will consider lifting the freeze on new domestic gas connections, enabling the utilities to extend RLNG-based connections to applicants at notified rates. Officials said the decision could end years of uncertainty while simultaneously helping the government utilize surplus LNG volumes tied to long-term supply contracts with Qatar Energy and ENI, which carry binding take-or-pay clauses.
Official data shows the two utilities have so far provided 33,808 RLNG-based connections, while more than 150,000 applications remain pending—136,903 with SNGPL and 14,086 with SSGCL. In addition, a backlog of 3.2 million indigenous gas requests also awaits processing, including 240,000 applicants who have already deposited dues and 4,000 who paid an urgent fee. Officials have cautioned that the absence of a clear framework risks triggering litigation over discriminatory tariffs.
The problem has been compounded by falling gas demand from captive power plants following the imposition of a grid transition levy, leaving SNGPL projecting 11 surplus cargoes in the second half of 2025 and up to 40 in 2026. To absorb the excess, the utility has been diverting costly RLNG to households—a step that pushed up consumer prices, with OGRA estimating the diversion cost at Rs242 billion for 24 cargoes in FY2025.
To ease system pressure, SNGPL has also curtailed 250–400 mmcfd of indigenous production, hurting exploration and production companies by reducing associated output of condensate, crude oil, and LPG. Industry experts warn that prolonged curtailments could discourage upstream investment at a time when indigenous reserves are already in decline.
The Petroleum Division has circulated the proposal among key ministries and regulators, receiving support from the Power, Finance, and Planning Divisions. OGRA has backed the move subject to a review of domestic slabs and legal vetting.
While the proposal offers relief for households awaiting connections, analysts caution it also entrenches reliance on expensive imported LNG, raising affordability and energy security concerns. For the government, however, approval would ease surplus absorption and help avert costly take-or-pay penalties under LNG supply contracts, even as Pakistan’s dependence on imports deepens.
