Gas production at desired delivery pressure: Mari signs agreement with fertiliser companies

Mari Petroleum Company Limited (MPCL), the country’s second largest producer of natural gas, has entered into an agreement with three fertiliser manufacturing companies including Fauji Fertilizer Company Limited (FFC), Engro Fertilizers Limited (EFL) and Fatima Fertilizer Company Limited (FATIMA) to maintain MPCL’s Habib Rahi Limestone (HRL) Reservoir gas production plateau at the desired delivery pressure.

The development was shared by MARI in a filing sent to the Pakistan Stock Exchange (PSX) on Friday.

“We are pleased to inform that Mari Petroleum Company Limited (MPCL) has executed a framework agreement for the installation of Pressure Enhancement Facilities (PEF) at Mari Gas Field, Daharki, Sindh with FFC, EFL and FATIMA.”

“The project is aimed to maintain Habib Rahi Limestone (HRL) Reservoir gas production plateau at desired delivery pressure(s) for gas supplies to the fertilizer plants,” read a statement.

Of gas shortage and lopsided pricing

The company shared that the project involves debottlenecking of surface pipeline network and installation of compression facilities within the Mari Field.

In a note after the development, brokerage house Arif Habib Limited (AHL) said the project pertains to the development of pipeline infrastructure and the installation of compressors within the Mari Gas field.

"As per our understanding, it is expected to complete within two years with an estimated CAPEX size of PKR 10bn – PKR 12bn. With the completion of this project, the Mari Gas Field’s reserve life will further expand," said AHL.

The development comes as Pakistan’s gas reserves continue to deplete, creating shortage for both industrial and household consumers, especially during the winter months.

On the other hand, Pakistan is increasing its dependence on imported fuel including RLNG to meet its domestic energy needs.

Earlier, Minister for State on Energy (Petroleum Division) Musadik Malik said that his recent visit to Russia was successful as it agreed to supply both crude and refined petrol, diesel, and LNG at discounted rates, especially when the world was witnessing a shortage and high premier on diesel.

The Russian ministerial delegation is scheduled to visit Pakistan in January 2023 for further negotiation on the commercial agreement on the import of petrol, diesel, and LNG at discounted rates.