PPL secures lease extension for Sui gas field

KARACHI: Pakistan Petroleum Limited (PPL) has signed agreements with the federal government to continue operations at the Sui Gas Field, the country’s largest natural gas-producing site, the company disclosed in a notice to the Pakistan Stock Exchange (PSX) on Friday.

The agreements include the execution of the Sui Development and Production Lease (D&PL) and the Sui Petroleum Concession Agreement (PCA), ensuring the firm’s continued presence in the strategically important field located in Dera Bugti, Balochistan.

According to PPL, the lease, covering 455.8 square kilometres, was initially granted in October 2024 and is valid for a 10-year period from June 1, 2015 to May 31, 2025. Under Pakistan’s Onshore Petroleum (Exploration and Production) Rules, 2013, the lease is eligible for further extension.

Despite declining reserves, the Sui Gas Field remains one of Pakistan’s key natural gas sources, hosting the country’s largest gas compression and purification facility.

PPL also announced that it has signed a memorandum of agreement (MoA) with the Government of Balochistan on February 14, 2025. The signing ceremony, held in Sui, District Dera Bugti, was attended by Balochistan Chief Minister Mir Sarfraz Bugti as the chief guest, along with Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal, Senators Shahzaib Durrani and Danesh Kumar, senior government officials, dignitaries, and key stakeholders, PPL announced on Friday.

PPL Managing Director & Chief Executive Officer Imran Abbasy and Balochistan Energy Department Secretary Muhammad Dawood Bazai formally signed the agreement on behalf of their respective entities.

Under the MoA, PPL will contribute approximately Rs60 billion to the government of Balochistan in the form of a lease extension bonus, production bonus and social welfare obligations. As part of this commitment, PPL presented the first tranche of Rs36 billion to the chief minister of Balochistan, with the remaining payments scheduled for March and May 2025.

Over the past decade, PPL has invested approximately Rs13.76 billion in Balochistan, including Rs2.72 billion in the 2023-24 fiscal year alone. These funds have supported education, healthcare, infrastructure, and community development initiatives, along with the provision of free gas and water supplies.

Addressing the essential needs of Sui residents, PPL has supplied gas worth Rs7.4 billion and water worth Rs1.7 billion free of cost over the past 10 years. The company currently provides 4mmscfd of gas and over two million gallons of water daily to the local community. PPL has created employment opportunities for around 1,500 individuals in Sui, with nearly 1,200 of them belonging to the local population.

The MoA underscores PPL’s commitment to sustainable development in Dera Bugti, with initiatives that go beyond energy supply. The company will offer educational scholarships to students from Dera Bugti, facilitate technical and vocational training through the Balochistan Technical and Vocational Training Authority (B-TEVTA), and collaborate with the provincial government to improve healthcare and educational infrastructure.

Through this agreement, PPL reinforces its long-standing commitment to corporate social responsibility, focusing on socioeconomic development, capacity-building, and essential service provision. The partnership is expected to drive long-term progress and improve living standards in Balochistan.