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ISLAMABAD: The Competition Commission of Pakistan (CCP) has strongly recommended separation of the transmission and distribution functions within the Sui companies to foster competition in Pakistan’s LNG and gas market.

According to a Research Study of the CCP on the Liquefied Natural Gas (LNG) Sector, the unbundling of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) is a crucial step.

This can be achieved in a phased manner, as follows:

Phase 1: Unbundling of Transmission and Distribution Functions As a starting point, the government can initiate the separation of the transmission and distribution functions within the Sui companies. This will involve creating independent entities for gas transmission (pipeline management) and gas distribution (to end consumers).

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Unbundling at this level will allow for more transparency, competition, and efficiency in gas distribution, while ensuring a clear delineation of roles between entities managing pipeline infrastructure and those responsible for delivering gas to consumers.

Phase 2: Moving Towards Full Separation of Pipeline Operations Once the transmission and distribution functions are unbundled and established the next phase should be the complete separation of pipeline operations from the gas supply business. This approach, modeled after Japan’s system, ensures that pipeline operators are independent entities providing equal access to all market participants.

Independent pipeline operators would guarantee third-party access to infrastructure, levelling the playing field for new entrants and stimulating further investment in the gas sector.

This phased unbundling will align with international best practices and address existing concerns around market entry barriers, eventually leading to a more competitive and liberalized gas market in Pakistan. Under the guidance of OGRA and in coordination with relevant stakeholders, this approach can be implemented gradually to ensure minimal disruption and maximum efficiency in the transition.

The unbundled SOEs will then come under the Central Monitoring Unit (CMU) according to the SOE Act, 2023 that will monitor their performance.

Furthermore, mechanisms should be established to monitor and evaluate the impact of unbundling on market competition. Regular assessments should be conducted to ensure that the objectives of increased transparency and market accessibility are being met, CCP added.

Copyright Business Recorder, 2025

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