Fauji Fertilizer eyes coal gasification to replace natural gas, utilise Pakistan’s domestic coal

Fauji Fertilizer Company (FFC), one of Pakistan’s largest fertiliser companies, is exploring a coal gasification project as a potential substitute for natural gas, aiming to leverage Pakistan’s substantial coal reserves and reduce dependency on imported energy sources.

The company shared the update during its corporate briefing session held on Tuesday, which was attended by Topline Securities, a brokerage house.

As per the report, the FFC’s management “mentioned that they are working on a coal gasification project as a substitute for natural gas and aim to utilise the country’s substantial coal reserves”.

“However, the project is still in its early stages; no estimates have been made yet, and updates will be shared once any material progress is achieved,” it added.

FFC earns Rs85.5bn consolidated profit in 2024

Pakistan has massive coal reserves, with estimates of around 186 billion tons, making it among the largest in the world. The majority of these reserves are lignite, located in the Thar desert in Sindh.

During the briefing session, FFC’s management shared that it was nearing completion of the transition to full Shariah compliance. “Their focus remains clear on achieving full Shariah compliance, and it is only a matter of time before completion,” read the report.

Giving its perspective on the overall industry, FFC’s management expects the industry urea offtakes to close at 6.3 million in 2025, while urea inventory is expected to remain under 1 million by December.

“While for 2026, management expects a rebound in 1H2026 due to better agricultural activity as farm economics have improved for wheat and cotton,” said Topline.

Regarding urea export, FFC management said “no such discussions are ongoing with the government, nor are they considering exports”.