Mari Energies allocates gas to private sector

Mari Energies has finally allocated gas to Universal Gas Distribution Company (Pvt) Ltd from the Spinwam discovery in the Waziristan block of Khyber-Pakhtunkhwa following a warm response from the private sector.

Mari Energies is the operator of the Waziristan block having 55% working interest along with Oil and Gas Development Company and Orient Petroleum as joint-venture partners having 35% and 10% working interests, respectively.

Sources told The Express Tribune that Mari Energies had received bids from 50 parties for gas allocation to the private sector under a new policy approved by the federal government to open the gas market.

UGDC is the only private company operating as a gas distributor to the consumers. Earlier, oil and gas exploration companies were bound to allocate gas to state-owned distribution companies and could provide only 10% gas to private parties under the previous policy. However, the government later enhanced it to 35% allocation in a bid to improve the cash flow of companies and reduce the circular debt.

The Special Investment Facilitation Council (SIFC) has played a key role in opening the gas market and implementing the new policy to allocate 35% of gas from fields through a competitive bidding process. Sources revealed that Mari Energies had received a high bid as it had announced in the bidding document to offer a price under the 2012 petroleum policy with a minimum premium of $1 per million British thermal units (mmBtu).

In a disclosure to the Pakistan Stock Exchange, Mari Energies said, "We hereby convey the following information: Letter of Award for purchase of gas from Spinwam gas discovery – Waziristan Block, K-P. We are pleased to announce pursuant to our invitation to bid advertised on May 15, 2026 for purchase/sale of gas from the Spinwam discovery, the successful conclusion of the bidding process."

It further said that it had issued a "Letter of Award" to the successful bidder, Universal Gas Distribution Company, for the sale of up to 17.5 million standard cubic feet per day (mmscfd) from the discovery.

According to the notice, the parties will now obtain regulatory and other requisite approvals as envisaged in the Framework for Sale of Gas to Third Parties notified vide SRO No 11(I)/2025 dated January 7, 2025.

Oil and gas exploration companies have welcomed the move to open the gas sector, saying that the third-party gas allocation policy will further boost exploration activities due to improved cash flow. They were of the view that their cash flow would improve for future projects, which would encourage them to make more investment in exploration blocks.

Pakistan is currently facing a circular debt of over Rs1.5 trillion in the gas sector, which has also affected oil and gas exploration companies.

Gas curtailment by the exploration companies had also affected their operations. Earlier, the government had been pressing them to slow down gas supply due to the flooding of markets with liquefied natural gas (LNG) imports.

Owing to this, the government introduced an amendment to the policy relating to gas allocation to the private sector to resolve the issue of gas curtailment. The gas curtailment also resulted in lower supplies of crude oil and liquefied petroleum gas (LPG) from different fields.

Even, at one point, Attock Refinery, which runs on locally produced crude oil, had been forced to shut down due to reduced crude oil supplies. Gas companies were of the view that they had lost billions of rupees due to the curtailment but now the gas allocation to third parties has resolved such issues.