Mari Energies Limited (MEL) has announced that the federal government has approved new gas allocation and pricing arrangements from its Ghazij and Shawal reservoir discoveries in the Mari field, designating supply for major fertiliser manufacturers.

The listed exploration and production (E&P) firm disclosed the development in a notification to the Pakistan Stock Exchange (PSX) on Thursday.

According to the approved allocation, gas has been earmarked for Fauji Fertilizer Company’s (FFC) Port Qasim plant, Fatima Fertilizer’s Sheikhupura facility, and Agritech’s Daud Khel unit.

FFC’s Port Qasim facility will receive the largest allocation, with 104 mmcfd of raw gas, equal to 80 mmcfd of processed supply, followed by Fatima Fertilizer with 68 mmcfd raw (52 mmcfd processed), and Agritech Daud Khel with 50 mmcfd raw (38 mmcfd processed).

The variation between raw and processed volumes reflects processing and compression losses incurred before gas enters the transmission network operated by the Sui companies.

MEL stated that raw gas would be delivered to the fertiliser off-takers within the Mari field, priced at the wellhead rate notified periodically by OGRA. Fertiliser producers will execute bilateral Gas Sales and Purchase Agreements (GSPAs) directly with Mari Energies.

Under the arrangement, fertiliser manufacturers will be responsible for installing processing and compression facilities to enable delivery of processed gas into the national network. For this purpose, off-takers will enter into third-party access (TPA) arrangements with Sui companies in accordance with the TPA Rules, 2018 and the Pakistan Gas Network Code.

In the case of supply to FFC Port Qasim, SNGPL and SSGC will implement gas swap arrangements to facilitate downstream delivery. Mari Energies may also divert available volumes from the Ghazij/Shawal reservoirs to customers, including SNGPL/SSGC, as swing gas, on an “as available” basis.

The company added that as the HRL reservoir naturally depletes, MEL may backfill fertiliser demand using Ghazij/Shawal volumes to maintain continuity of supply.

Alongside new allocations, the government has also approved several reallocations. These include:

• De-allocation of 110 mmcfd from the HRL reservoir previously allocated to GENCO-II
• Enhancement of Engro Fertilizer’s base plant allocation from 26 mmcfd to 105 mmcfd from the HRL reservoir
• Regularisation and reallocation of up to 110 mmcfd gas from Mari Deep to SNGPL, following expiry of the earlier allocation in June 2024

The comprehensive allocation plan is expected to improve feedstock certainty for fertiliser production while creating greater flexibility in reservoir management across the Mari field.