Press Release

VIS Credit Rating Reaffirms Entity Ratings of Sui Northern Gas Pipelines Limited

Karachi, December 01, 2023: VIS Credit Rating Company Limited reaffirms entity ratings of Sui Northern Gas Pipelines Limited (SNGPL) at 'AA+/A-1+' (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 'A-1+' indicates 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 Government of Pakistan’s short-term obligations. Outlook on the assigned ratings remains ‘Stable’. Previous rating action was announced on November 2, 2022.

Sui Northern Gas Pipelines Limited (SNGPL), a public limited company listed on the Pakistan Stock Exchange, is primarily engaged in the transmission and distribution of natural gas within North Central Pakistan, serving nearly 7.5 million consumers. Established in 1963, the Company has grown its network to 9,052 KM of transmission and 146,327 KM of distribution infrastructure.

SNGPL holds a strategic position in the gas distribution sector of Pakistan, operating within a monopolistic market structure alongside Sui Southern Gas Company Limited (SSGC). The semi-government ownership status of SNGPL, with approximately 58% of shares held directly or indirectly by the government, exhibits strong sovereign support. The Company's business risk profile drives strengths from its established franchise, guaranteed return on net operating assets, and sovereign presence across the value chain.

Assessment of financial profile is based on financial statements as of FY22. Finalization of audited financial statements of FY23 is expected to be delayed due to cascading impact of delay in finalization of Revenue Requirements of prior years. SNGPL has shown improvement in its capitalization profile, with improved gearing on account of reduction in total debt and an increase in equity. However, the Company continues to be exposed to circular debt with sizeable receivables and payables on the books, leading to higher leverage. Liquidity therefore remains critical for ratings. The Company has been managing liquidity by pushing payables and utilizing short-term lines to bridge the gap arising from delay in receivables. Credit risk against receivables, however, remains low as majority are due from Government entities/Government. The recent gas tariff increased, effective from Nov 1, is expected to narrow the tariff differential and reduce accumulation of circular debt. Ratings also incorporate materialization of the Company’s objective to reduce the absolute quantum of Unaccounted for Gas (UFG) losses. SNGPL has capex plans to continue to invest in transmission and distribution network as well as development of new discoveries, which are vital given the annual depletion of indigenous gas. Going forward, ratings remain sensitive to settlement of inter-corporate circular debt along with maintenance of Company’s financial risk profile.

For further information on this ratings announcement, please contact Nikeeta Rani at 021-35311861-64 (Ext. 215) and/or the undersigned at 021- 35311861-64 (Ext. 207) or email at

Sara Ahmed

Applicable Rating Criteria: Corporates (May 2023) & Governement Supported Entities (July 2020)

VIS Issue/Issuer Rating Scale

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