EFERT targets end-2025 for Phase 1 of gas pressure project

October 21, 2025 (MLN): Engro Fertilizers Limited (EFERT) is advancing its Pressure Enhancement Facility (PEF) project with Phase 1 pipeline extension work expected to complete by the fourth quarter of 2025, according to disclosures made during the company's analyst briefing on October 20, 2025.

The Pressure Enhancement Facility has been structured as a two-phase strategic initiative to address long-term gas supply stability concerns. Phase 1, designated as Scope 2, focuses exclusively on pipeline extension infrastructure.

While management indicated a minor delay is anticipated in the completion timeline, officials emphasized this will have no adverse impact on gas pressure maintenance during the transition period.

Phase 2 of the project will involve the procurement and installation of compressor equipment, though specific timelines for this phase were not disclosed during the briefing.

Company management clarified a crucial aspect of the PEF project that distinguishes it from conventional gas field development initiatives.

The facility is not designed to increase overall gas production volumes from the reservoir. Instead, its primary objective is to maintain optimal reservoir pressure levels and prevent gas depletion over time.

This approach shows a preventative strategy to ensure sustained access to existing gas reserves rather than expanding production capacity, a distinction that carries significant implications for the company's long-term operational planning.

The PEF project development comes amid ongoing discussions between EFERT and government authorities regarding gas allocation from MARI's Ghazij and Shewa fields to the fertilizer sector.

According to the analyst briefing, these allocation discussions with relevant ministries are continuing, with formal updates expected following government approval.

The gas supply situation has taken on increased importance for Pakistan's fertilizer sector as companies navigate elevated input costs and competitive pressures.

EFERT reported that its market share in DAP (Di-Ammonium Phosphate) declined from 19% in Q2 2025 to just 5% in Q3 2025, partly due to pricing challenges as global DAP prices spiked sharply between April and September.

Beyond the immediate PEF project, EFERT disclosed that Thar coal gasification is currently under evaluation by both the company and the broader fertilizer industry.

Multiple gasification options are being explored as part of long-term energy diversification efforts, though no formal estimates or figures have been released.

This exploration shows growing industry recognition of the need to reduce dependence on natural gas and develop alternative feedstock sources for fertilizer production in Pakistan.

The infrastructure developments come as EFERT navigates a challenging operational environment.

The company posted consolidated profit after tax of Rs14.3bn for the nine-month period ending September 2025, down 21% year-over-year, though quarterly profitability improved 4% to Rs5.8bn.

Net profit declined by Rs2.7bn year-over-year during Q3, driven primarily by compressed urea margins amid ongoing regional discounts, subdued DAP offtake due to elevated international prices, and higher distribution and administrative expenses.

Despite these headwinds, EFERT's management expressed optimism about farm economics recovery, citing improved wheat prices and government support measures.

The company's overall urea offtake is now expected to exceed 6m tons for the full year, up from earlier estimates of 5.7-5.8m tons.

The completion of the PEF project's first phase by late 2025 represents a significant milestone in EFERT's strategy to secure reliable gas supply infrastructure while the company and sector await clarity on broader gas allocation policy decisions.

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