Topline Pakistan Research has released a report on the Sui Northern Gas Pipeline (SNGP) following an analyst briefing.

SNGP management discussed the financial performance and future outlook, noting an improvement in the gas sector’s circular debt during the first two-quarters of FY25 despite a slight increase later on. – Unaccounted for Gas (UFG) has decreased to 4.93%, the lowest level in 18 years, with expectations for continued improvement.

– The Captive Levy is being charged by all gas transporters, countering recent claims that third parties were exempt from this charge.

– The company projects an average annual capital expenditure of Rs30 billion for the coming years. – Management mentioned that finance costs for working capital are allowed as pass-through, while those for business capex loans are not.

Pakistan’s energy mix includes 30% natural gas, with SNGP supplying 69%, as well as other sources such as oil, coal, and renewables.

– New gas connectivity of 95 mmcfd was achieved with the completion of the Shaheed Fahad Ashfaq Project, integrating the Bannu West-1 and Wali gas fields.

– Future projects include the Kot Palak Gas Project and a pipeline in Islamabad/Rawalpindi for network enhancement.

– SNGP is 32% directly owned by the Government of Pakistan, 42% indirectly, with 26% held by the public.

– SNGPL reported a record profit of Rs18.97 billion and sales of Rs1,374 billion in FY24. – SNGP trades at a PE ratio of 4.5x for FY25E and 5.0x for FY26F.