Can Ghani Chemical disrupt Pakistan's LPG market?

November 24, 2025 (MLN): Ghani Chemical Industries Limited (GCIL) has unveiled a growth strategy focused on strategic partnerships, sector diversification, and renewable energy integration.

The plan aims to drive significant expansion in Pakistan's industrial gases market, as discussed in a recent corporate briefing session.

In a major development, GCIL has secured a crucial license from the Oil and Gas Regulatory Authority (OGRA) to establish a 450-metric-ton LPG storage and filling plant at Phool Nagar.

This move marks the company’s strategic entry into Pakistan's rapidly growing liquefied petroleum gas sector.

The landmark facility represents GCIL's first major venture beyond its core industrial and medical gases business.

With OGRA approval now in hand, the company is proceeding with construction plans for the Phool Nagar plant, which will be executed through its subsidiary, Ghani Gases (Pvt.) Ltd.

Construction is set to commence immediately following final regulatory approvals, positioning GCIL to capture market share in Pakistan's expanding LPG distribution network.

The 450-metric-ton capacity facility will serve both retail and commercial customers, diversifying the company's revenue base while leveraging its existing distribution infrastructure.

Pakistan’s growing reliance on LPG as a cleaner alternative fuel for domestic, commercial, and transportation use makes the move timely, aligning with rising nationwide demand.

The Phool Nagar location also provides strong logistical advantages, enabling efficient supply to Punjab’s densely populated markets.

Complementing its LPG initiative, GCIL's Board approved a Rs14bn joint venture with Mari Energies Limited.

Under this partnership, GCIL will hold a 49% stake while Mari Energies retains 51% ownership in a Project Company designed to capture and process cold-vent and exhaust gases from Sui Gas Purification Complex (SGPC).

The groundbreaking project will be Pakistan's first facility to produce 80,000 tonnes per annum (TPA) of liquefied natural gas (LNG) and 55,000 TPA of industrial and food-grade carbon dioxide (CO₂), with anticipated annual revenues of approximately Rs17bn.

GCIL's Chief Executive Officer will serve as the joint venture's inaugural CEO.

The project, predominantly funded through supplier credit arrangements, is targeted for commissioning by the end of next year, with management expressing confidence in achieving favorable profit margins.

Environmental sustainability features prominently in GCIL's expansion strategy. The company has signed a Memorandum of Understanding (MoU) with a leading Pakistani energy company for a greenhouse gas reduction initiative in Sindh province.

The collaborative project focuses on capturing and processing cold-vent and exhaust gases, including flue gas, to produce food-grade liquid CO₂.

This initiative aligns with global environmental standards while creating a new revenue channel in specialty gases. A formal agreement is expected to be finalized soon.

GCIL has identified several additional revenue opportunities beyond LPG and LNG.

The company is expanding pipeline-based continuous gas supply solutions for high-volume industrial clients, including a major pipeline supply arrangement with a petrochemical client already secured through long-term contracts.

The specialty gases segment presents another growth avenue, with GCIL targeting electronics, semiconductors, research and development laboratories, and calibration markets.

The company is also making strategic inroads into Pakistan's shipbreaking sector at Gadani one of the world's busiest shipbreaking yards and a critical component of the country's steel supply chain.

Commercial operations at GCIL's fifth and largest air separation unit (ASU) plant commenced in April 2025 at Hattar Special Economic Zone.

With a capacity of 275 tonnes per day, the facility stands as Pakistan's largest medical and industrial gases plant.

The Hattar plant's superior energy efficiency and cost advantages are expected to materially enhance profitability.

Its tax-exempt status within the Special Economic Zone provides additional competitive benefits that strengthen GCIL's market position as it pursues diversification into LPG and other sectors.

GCIL's management has implemented comprehensive strategies to address ongoing challenges, including macroeconomic instability and power supply volatility.

These measures include broader supply-chain diversification, adoption of flexible pricing mechanisms, and increased integration of renewable energy solutions particularly solar power.

The recently revealed three-year government support package is expected to provide partial relief through lower incremental electricity tariffs, while ongoing renewable energy adoption should reduce long-term exposure to volatile power costs.

Throughout its expansion initiatives, GCIL maintains its commitment to stringent safety standards supported by ISO certifications.

Management expects to sustain strong gross profit margins through FY26, with the shipbreaking sector revival and new LPG operations potentially driving increased production levels and revenue diversification.

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