Pakistan's long-closed gas market is beginning to open, and private buyers are queuing up. Mari Energies has awarded gas from its Spinwam discovery in the Waziristan block of Khyber Pakhtunkhwa to Universal Gas Distribution Company (UGDC), after receiving bids from 50 parties, sources told The Express Tribune. The deal, for up to 17.5m standard cubic feet a day (mmscfd), is a test of a new policy designed to ease cash-flow pressures on explorers caught in a gas-sector circular debt exceeding Rs1.5trn.
Mari operates the Waziristan block with a 55% working interest. Its joint-venture partners are the Oil and Gas Development Company, with 35%, and Orient Petroleum, with 10%.
The sale follows a change in the rules. Exploration firms were previously obliged to sell gas to state-owned distributors, with only 10% available to private buyers. The government has since raised that ceiling to 35%, to be allocated through competitive bidding, in an effort to improve companies' cash flow and reduce circular debt.
The Special Investment Facilitation Council (SIFC) played a central role in opening the market and implementing the policy. UGDC is the only private company distributing gas directly to consumers.
Pricing helped draw a high bid, according to sources. Mari's bidding documents offered gas at the price set under the 2012 petroleum policy, plus a minimum premium of $1 per million British thermal units (mmBtu).
In a filing with the Pakistan Stock Exchange, Mari confirmed that the bidding process launched on May 15th 2026 had concluded successfully and that a letter of award had been issued to UGDC. The parties must now secure regulatory and other approvals under the framework for third-party gas sales notified on January 7th 2025. Explorers have welcomed the reform. They argue that selling gas to third parties will strengthen their finances and encourage further investment in exploration blocks, at a time when the circular debt has squeezed the industry.
Their troubles have been compounded by forced cutbacks. The government had pressed producers to curb gas output because the market was flooded with imported liquefied natural gas (LNG). Those curtailments also reduced supplies of crude oil and liquefied petroleum gas (LPG) from several fields.
At one point the squeeze was severe enough to shut Attock Refinery, which processes locally produced crude, for lack of supply. Gas firms say they lost billions of rupees from the curtailments, and the government amended the allocation policy partly to address the problem.
Producers contend that third-party sales have now resolved those difficulties. Whether that optimism holds will depend on how many more allocations follow and on regulators approving deals such as Mari's promptly.