Press Release
VIS Reaffirms Entity Rating of Sui Northern Gas Pipelines Limited
Karachi, February 17, 2026: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Sui Northern Gas Pipelines Limited (‘SNGPL’ or the ‘Company’) at ‘AA+/A1+’ (Double A plus/ A-one plus). Medium to long term rating of 'AA+' indicates High credit quality; Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Short term rating of 'A1+' indicates Strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Outlook on the assigned ratings remains Stable. Previous Rating action was announced on January 20, 2025.
SNGPL is Pakistan’s largest integrated gas utility, serving over 7.3 million consumers across Punjab, Khyber Pakhtunkhwa, and Azad Jammu & Kashmir through an extensive transmission and distribution network. With more than 62 years of experience, the Company has strong expertise in operating and maintaining high-pressure gas infrastructure and also functions as an EPC contractor for pipeline projects.
The assigned ratings reflect SNGPL’s strategic importance within Pakistan’s gas sector, where it operates under a monopolistic market structure, however, given the policy approval for certain quantities of gas sales by gas producers to consumers, minor competition may occur in mid-term. The Company’s status as a State-Owned Enterprise (SOE) continues to underpin the ratings. Operationally, SNGPL benefits from an extensive and well-established transmission and distribution network. Ongoing initiatives aimed at network expansion, system upgrades, and efforts for reduction in Unaccounted-for Gas (UFG) support operating efficiency and earnings stability over the medium term.
The business risk profile remains shaped by the prevailing regulatory framework, governed by OGRA’s tariff determination mechanisms which provides visibility on allowed returns over the Company’s asset base. However, exposure to circular debt accumulation and potential policy shifts remains a key rating constraint. During the period, domestic gas production declined to its lowest level in nearly two decades, driven by oversupply of imported RLNG and subdued industrial demand following the imposition of an off-grid levy on captive gas consumption for power production, which shifted consumers towards grid electricity and solar solutions, adversely impacting the Company’s liquidity. Liquidity profile remained sound despite a highly leveraged capital structure and elevated working capital pressures stemming from circular debt.
Going forward, planned capex aimed at network expansion, system upgrades, and new gas injections is expected to support operational efficiency and long-term sustainability, although unresolved circular debt and incremental operational debt requirements will keep leverage elevated.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Corporates & Government Supported Entities
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
https://docs.vis.com.pk/docs/Meth-GSEs202007.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf