Press Release

VIS Reaffirms Entity Ratings of Sui Northern Gas Pipelines Limited

Karachi, January 20, 2025: VIS Credit Rating Company Limited reaffirms entity ratings of Sui Northern Gas Pipelines Limited (SNGPL) 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 December 1, 2023.

SNGPL is Pakistan’s largest gas transmission and distribution company, serving over 7.5 million consumers across Punjab, KPK and Azad Jammu & Kashmir. Listed on the Pakistan Stock Exchange, the Company boasts over six decades of expertise and operates an extensive network spanning 149,242 kilometers in distribution pipelines and 9,239 kilometers in transmission pipelines, reaching 5,500 towns and villages.

The assigned ratings are primarily supported by SNGPL's direct and indirect majority government ownership, which reflects strong sovereign backing. The company's strategic position in Pakistan's monopolistic gas distribution sector, along with regulatory oversight from the Oil and Gas Regulatory Authority (OGRA), drives its business risk profile, further reinforced by its established market presence, guaranteed return on net operating assets, and sovereign presence across the value chain.

SNGPL has demonstrated significant progress in reducing Unaccounted-for-Gas (UFG) losses over past few years as a result of targeted efforts to minimize gas leakages and theft. During the period under review, the company’s revenue saw a boost from tariff adjustments, while its liquidity and coverage profiles remained intact at adequate levels. Meanwhile, Company’s capitalization indicators were elevated amid sharp increase in short-term borrowings due to circular debt challenges. Going forward, with continuation of sovereign backing, maintenance of profitability profile and improvement in capitalization indicators will remain important rating triggers.


For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.


Applicable Rating Criteria:

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

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