SSGC Board approves agreement with Jamshoro Joint Venture Ltd

March 07, 2025 (MLN): The Board of Directors of Sui Southern Gas Company (PSX: SSGC) approved entering into an agreement with Jamshoro Joint Venture Limited (JJVL) based on mutually agreed and approved terms and conditions in its meeting held on March 6, 2025.

Following this approval, the formal agreement between the two parties will be presented before the SSGC Board for its consideration and final approval, the company's filing on PSX revealed today. 

SSGC will receive 66% of revenues from JJVL, an increase from the previous figure of 57.54%.

In addition, SSGC will procure 25% of LPG production at the OGRA-notified monthly price.

These terms are even more economically favorable to SSGC and were agreed upon through extensive, good-faith discussions.

This agreement reflects a pragmatic approach to maximizing national energy resources while ensuring economic sustainability for both parties.

From 2005 to 2020, SSGC earned Rs31 billion from JJVL without making any investment.

Additionally, JJVL provided Rs55bn in gas payments to SSGC and Rs20bn in taxes.

During this 15-year period, JJVL contributed $1.1bn in LPG import substitution benefits and $261 million in export earnings to the national economy.

The revenue-sharing model incentivizes SSGC to supply maximum gas to JJVL for processing, while JJVL is encouraged to ensure the highest recovery rates to optimize production.

The reactivation of JJVL will increase domestic supply, lower consumer prices, reduce reliance on expensive LPG imports, ease pressure on the current account deficit, and foster a competitive market that benefits households.

This is a win-win agreement that strengthens Pakistan’s energy independence while ensuring profitability and sustainability for all stakeholders.

JJVL was shut down on June 20, 2020, due to an unfavorable operating environment despite its clear and established economic benefits to SSGC.

The shutdown cost the country $108m in annual losses.

JJVL’s state-of-the-art facility, which has a replacement value of $250m, will require 45-60 days to resume production.

This shutdown period was challenging for the company.

However, the facility was maintained, no retrenchments were made, and JJVL continued to service its debts demonstrating its commitment to the country’s energy security.

JJVL has a proven track record of reliability.

It commenced production in 2005 without any gas volume or composition guarantees from SSGC.

The same remains true under the new agreement, meaning SSGC’s risk factor is zero further incentivizing SSGC to utilize JJVL.

SIFC has played a pivotal role in removing bureaucratic hurdles and creating a business-friendly environment.

Investor confidence has markedly improved under the current government, as reflected in positive economic indicators.

These developments send a strong signal to both foreign and local investors that Pakistan is once again open for business.

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