ECC Approves Gas Supply for Steel Plant Revival

Pakistan’s ECC has cleared gas supply for National Steel Complex, reviving hopes for restarting a major steel plant shuttered for over a decade.

Pakistan’s Economic Coordination Committee (ECC) has approved gas supply to National Steel Complex Limited on an availability basis, marking a significant step toward reviving the steel facility that has remained inactive since 2013. The decision is expected to support efforts to restart domestic steel production while maintaining existing energy allocation priorities.

Alongside the approval, the ECC instructed the Petroleum Division to ensure gas distribution follows economic merit principles and to revisit the Natural Gas Allocation and Management Policy 2005. The review aims to align future allocations with prevailing economic and industrial requirements.

National Steel Complex Limited, previously known as Tuwairqi Steel Mills, began operations in January 2013 with an annual production capacity of 1.28 million tonnes. Backed by investors from Saudi Arabia and South Korea, the facility relies on MIDREX direct reduced iron technology and requires a steady supply of natural gas to sustain production.

The government originally allocated gas to the project in 2005, with a formal agreement signed the following year for the supply of 45 million cubic feet per day. Most of that volume was designated for manufacturing operations, while a smaller portion was reserved for captive power generation under industrial tariff rates.

Despite its ambitious scale, the plant ceased operations within months of commissioning after disagreements emerged over gas pricing. Company management sought access to lower fertiliser-feedstock rates rather than industrial tariffs, a move authorities argued would have resulted in substantial revenue losses and cross-subsidy costs for the gas utility.

The dispute continued after the gas sales agreement expired in 2016, leaving the original allocation inactive and delaying multiple revival attempts. In 2018, Saudi investors launched international arbitration proceedings seeking damages, but the tribunal ultimately rejected all claims against Pakistan in December 2023 and ordered the claimants to bear associated legal and administrative expenses.

Ownership and management of the facility later shifted when US-based Ciena Group assumed control in 2022, after which the company was renamed National Steel Complex Limited. Discussions on reviving the plant have since featured in meetings of the Special Investment Facilitation Council, where stakeholders reiterated that gas could be supplied at commercial rates rather than subsidised tariffs.

The ECC’s latest decision is viewed as a practical step toward restoring operations at one of Pakistan’s largest steel projects. However, the pace of revival will likely depend on gas availability, commercial viability, and the outcome of ongoing policy reviews governing energy allocations.