MOL Pakistan’s gas sale deal with Universal Gas Distribution Company Ltd (UGDCL) from the newly developed Razgir field has drawn criticism from its joint venture partners and other private gas distribution firms, who allege that the gas sale bypassed the mandatory competitive bidding process, Dawn reported.
This is the first such deal with a privately owned gas distributor, however, the transaction has yet to be formally signed with the Universal Gas Distribution Company Ltd. But, it aggrieved other private gas distribution companies who claim the natural resource could not be legally sold to a third party without competitive bidding.
The Razgir field’s gas is 65% owned by state-owned entities (SOEs). If the deal is finalised, UGDCL will acquire about 50 million cubic feet per day (mmcfd) of gas to supply its private customers, primarily CNG stations, through the Sui Northern Gas Pipelines Ltd (SNGPL) network, subject to payment of wheeling charges.
The Tal block is located in the Kohat Plateau, Khyber Pakhtunkhwa. MOL Pakistan, a wholly-owned subsidiary of MOL Group, is a 10% stakeholder and operator in the Tal Block where it spudded the Razgir-1 well in January 2024.
Private gas distributors allege that SOEs, under the influence of senior officials, facilitated the deal, violating the Economic Coordination Committee’s (ECC) 2023 decision that requires bidding for higher government revenue and shareholder returns.
MOL Pakistan said it sought consent from joint venture partners, including Pakistan Petroleum Ltd (PPL), Oil and Gas Development Company Ltd (OGDCL), with about 30% stakes each, and Government Holdings (Pvt) Ltd (GHPL) with 5%.
However, Pakistan Oilfields Ltd (POL), holding a 25% share, has objected to the lack of transparency. POL complained of being excluded from negotiations and learning about the deal from external sources. The company has demanded a competitive bidding process to avoid potential complications and ensure fair pricing.
On the issue, the Petroleum Division stated that under the SOE Law, the SOEs’ management is responsible for addressing such concerns.
Universal Gas Distribution Company’s CEO Ghias Abdullah Paracha confirmed the ongoing transaction and expressed optimism about its execution. He defended the deal, stating that UGDCL shareholders, primarily CNG station owners, had been struggling for survival and that the company had previously signed an agreement with MOL in March 2023 for 15 mmcfd gas from the Mamikhel field.
Paracha described the current transaction as an extension of that agreement. He also criticized competitors for attempting to disrupt the market without relevant experience.
However, concerns remain over the legality and transparency of the sale, with critics urging adherence to bidding requirements to ensure equitable distribution and maximize public benefits.
