The Government has taken a major step toward reviving the long-stalled Tuwairqi Steel Mills project, with the Economic Coordination Committee granting in principle approval for the supply of natural gas to the Saudi-backed steel complex after nearly two decades of inactivity.
The development follows efforts by the Special Investment Facilitation Council to restart the project, which was originally launched during the administration of former president Pervez Musharraf. The project remained incomplete for years because of disputes over the supply of gas at concessional rates, preventing commercial operations despite significant investment.
Under the latest decision, the ECC approved the provision of 40 to 45 million cubic feet per day of gas, a critical requirement for steel production. However, the committee clarified that gas supply would remain subject to availability and national economic priorities, and that the government would not be legally bound to guarantee uninterrupted supplies.
The committee also decided that all future requests from large industrial consumers seeking more than 10 million cubic feet per day of gas would be referred to the ECC for approval. In addition, the Petroleum Division has been directed to review the Natural Gas Allocation and Management Policy introduced in 2005.
The SIFC has reiterated its support for the National Steel Complex project, including recommendations for the allocation of 50 million cubic feet per day of gas, the provision of gas at competitive rates and the creation of a separate tariff category for large industrial consumers. Earlier, the Petroleum Division had proposed supplying 45 million cubic feet per day at a tariff of Rs. 1,900 per MMBTU, but the proposal failed to gain support from the ministries of finance and planning.
According to Sui Southern Gas Company, the steel complex was previously offered 40 million cubic feet per day of gas at rates determined by the Oil and Gas Regulatory Authority, but the offer was not accepted by the company. The SIFC has now directed SSGC to issue a letter of commitment for a reliable 10 year gas supply agreement, with an option to extend the arrangement for an additional 10 years.
The ECC was informed that recent changes in the government’s gas allocation policy have placed industrial consumers in the highest priority category alongside domestic and commercial users. As a result, the National Steel Complex now qualifies for gas allocation under the revised framework.
The Petroleum Division has proposed that SSGC provide 40 million cubic feet per day of gas for industrial operations and an additional 5 million cubic feet per day for power generation at OGRA notified rates. The final terms and conditions of the gas supply agreement will be negotiated between the parties before commercial arrangements are finalized.
The Tuwairqi Steel project was originally conceived in 2004 and formally launched in 2006 as one of Pakistan’s largest foreign direct investments in the industrial sector.
It was backed by Saudi Arabia’s Al Tuwairqi Holding and was later joined by South Korea’s POSCO with an investment of around US$340 million in its first phase. Spread over 220 acres at Port Qasim, the project was designed to produce 1.28 million tonnes of Direct Reduced Iron annually and was envisioned as Pakistan’s largest private sector integrated steel manufacturing complex when it was launched.
we completed DRI (about 400 M$) plant construction in 2008 and then was waiting to aquire Pakistan steel mill and triple it’s production from existing blast furnace to EAF But as bad luck of this country due to several obstacles it was not done.