Pakistan plans to launch new $300mn gas supply project by 2026

The Gas Pressure Enhancement Facilities (PEF) project, with an estimated cost of $300mn, is on track to be completed by 2026 at the Mari Gas Field in Daharki, Sindh. The initiative is designed to maintain stable gas production levels at necessary pressures to ensure a consistent supply to the fertilizer sector. The beneficiaries of the project include three leading fertilizer manufacturing units: Fauji Fertilizer Company Limited (FFC), Engro Fertilizers Limited (EFERT), and Fatima Fertilizer Company Limited (FFCL), with their current stakes in the PEF project being 47.7%, 33.9%, and 18.4%, respectively.

The overarching goal of the PEF project is twofold: to sustain domestic urea production levels essential for the agricultural sector and to fortify Pakistan’s food security. The project will tackle the debottlenecking of the existing surface pipeline infrastructure and the installation of compression facilities at various nodes. Execution activities for these enhancements have already commenced.

In a landmark move towards cooperation, FFC, EFERT, and Fatima cemented their commitment to this national cause by signing a Framework Agreement on November 30 2022. This agreement outlines their joint efforts to develop and install the necessary pressure enhancement facilities at Mari Petroleum Company Limited’s (MPCL) delivery node. The aim is to maintain the current gas pressure supplied from the HRL reservoir of MPCL, ensuring the fertilizer plants operate without interruptions.

Ali Rathore, the chief financial officer of Engro Fertilizers, highlighted the significance of this collaboration. He noted that Engro Fertilizers, along with other key players in the industry, is investing significantly in the PEF project. This investment, which for Engro Fertilizers exceeds $100mn, is a testament to the sector’s commitment to sustaining domestic urea production and securing Pakistan’s food supply chain. Through such strategic investments and collaborations, the fertilizer industry in Pakistan is setting a benchmark for how infrastructure projects can directly contribute to national food security and agricultural stability.