China urges Pakistan to settle $220 million dues payable by SSGC to energy firm

China has asked Pakistan to clear $220 million in outstanding payments owed to United Energy Pakistan, with officials warning that delays could affect investor confidence and energy sector operations, The News reported. 

Officials in the Petroleum Division said Pakistan’s envoy in Beijing conveyed the request, noting that the dues relate to gas supplied by United Energy Pakistan to Sui Southern Gas Company, which currently receives around 260–270 million cubic feet per day. The company has reportedly taken cost-cutting measures, including staff reductions, due to liquidity constraints.

The Special Investment Facilitation Council has also called for immediate clearance of the dues, highlighting implications for foreign investment. However, Sui Southern Gas Company has maintained that it cannot settle payments until its own refunds, amounting to billions of rupees, are released by the Federal Board of Revenue.

United Energy Pakistan, a subsidiary of United Energy Group, acquired BP Pakistan’s assets in 2011 and expanded operations through subsequent investments, including a $192 million acquisition of OMV gas fields in 2018. The company operates gas fields across Sindh and holds offshore and onshore exploration blocks.

Officials said resolving the payment issue is necessary to sustain operations and avoid further strain on Pakistan’s energy sector, which is already facing liquidity and regulatory pressures.