Jamshoro LPG plant resumes operations after five-year shutdown

ISLAMABAD: The Jamshoro Joint Venture Limited (JJVL) LPG-NGL extraction plant resumed operations on Tuesday after being shut for more than five years, a development officials say could save Pakistan an estimated $150 million annually in foreign exchange.

The plant “ will start LPG deliveries within three days or so,” said Iqbal Z Ahmed, chairperson of the Associated Group, which owns the facility.

The $250 million plant, once a key part of Pakistan’s LPG supply chain, has been shut since June 2020 following prolonged legal and regulatory disputes. The closure stemmed from challenges to the original contract between JJVL and Sui Southern Gas Company (SSGC) for the extraction of gas liquids from the Qadirpur field.

The SC annulled the contract in 2013, triggering years of litigation in domestic and international forums. A series of arbitration decisions and legal reviews — including international rulings in JJVL’s favour — eventually cleared the way for a settlement, with the Special Investment Facilitation Council (SIFC) facilitating negotiations. The settlement has been approved by SSGC and endorsed by policymakers.

The economic impact of the plant’s closure was significant. Between June 2020 and January 2024, the shutdown cost Pakistan Rs94 billion, a figure that had risen to more than Rs100 billion by June 2025. The country lost over 317,000 tonnes of LPG and 127,000 tonnes of NGL in domestic production, while additional imports required to bridge the supply gap cost more than $193 million. Pakistan also missed out on $86 million in potential NGL export earnings.

With operations restored, officials estimate that Pakistan could save $150 million annually in foreign exchange by substituting imports with locally extracted LPG.

The SIFC has long considered JJVL an important import-substitution asset and pushed for its revival to conserve foreign reserves.

The restart is seen as a boost to domestic LPG production at a time when Pakistan’s natural gas output is declining and global energy prices remain volatile. Industry analysts say the move will help stabilise local LPG and natural gas liquids (NGL) supply, reduce reliance on imports, and ease pressure on foreign exchange reserves.

“This is a signal that Pakistan is attempting to revive private-sector energy infrastructure,” an energy sector expert said. “The restart of JJVL could support investor confidence and encourage the recovery of other stalled assets.”

Before its 2020 closure, the JJVL plant was producing about 400 metric tonnes of LPG and 120 metric tonnes of NGL per day, processing 8-10 mmcfd of natural gas. Its shutdown led to supply shortfalls and increased LPG imports.

Under the agreement, the revenue-sharing arrangement between SSGC and JJVL will follow a 66:34 ratio, with SSGC receiving 25 per cent of LPG output at Ogra-notified producer prices. Officials estimate this will generate around Rs2 billion in annual revenue for SSGC.