Press Release

VIS Assigns Initial Entity Ratings to Sui Northern Gas Pipelines Limited

Karachi, November 02, 2022: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘AA+/A-1+’ (Double A Plus/A-One Plus) to Sui Northern Gas Pipelines Limited (SNGPL). The medium to long-term rating of ‘AA+’ denotes high credit quality coupled with strong protection factors. Moreover, risk factors may vary slightly with possible changes in the economy. The short-term rating of ‘A-1+’ denotes highest certainty of timely payment, short-term liquidity including internal operating factors and/or access to alternative sources of funds, is outstanding and safety is just below risk-free GoP’s short term obligations. Outlook on the assigned rating is Stable.
The ratings assigned to SNGPL factor in the strategic position of the company as one of the only two gas distribution companies operating in the country. The role, responsibility and infrastructure of the company used in dissemination of utilities is deemed critical from national security and economic sustenance perspective. The business risk profile of the company derives strength from its established franchise network, guaranteed return on net operating assets and presence of the sovereign throughout the value chain. The ratings incorporate the materialization of the company’s objective to reduce the absolute quantum of unaccounted for gas and percentage proportion by pursuing a multi-dimensional framework. Given the company is part of the gas circular debt, there are sizable receivables and payables outstanding on the company’s books. The liquidity management remains critical for ratings; the same is currently being managed by delay of payables and utilization of short-term borrowings; however, on the other hand, the receivables pose no major credit risk to the company as over two-thirds of the receivables are due from government or government owned entities. Currently, the financial statements for the year ending June-22 have not been published owing to time being taken for finalization of Final Revenue Requirement (FRR) for FY21 by OGRA. The ratings take note of key audit matter cited by auditors involving attention towards the settlement of intercorporate balances and accumulation of circular debt. Going forward, sizable capex is planned pertaining to expansion of transmission and distribution networks; however, the same is projected to be financed either by retained profits or government grants with no incremental commercial borrowing to be procured, therefore gearing is expected to improve in the medium term. Moreover, incremental cashflows will supplement SNGPL’s financial risk profile. Going forward, the ratings remain dependent upon overall economic, financial and political scenario prevalent in the country coupled with maintenance of company’s financial risk profile.

For further information on this rating announcement, please contact Ms. Maham Qasim (042-35723411-13, Ext. 8010) and/or the undersigned at 021-35311861-66 (Ext. 207) or email at

Sara Ahmed

Applicable rating criterion: Corporates (August 2021) & Government Supported Entities (July 2020)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2022 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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