PACRA maintains entity ratings of Pak-Arab Pipeline Company Limited.

Pak-Arab Pipeline Company Limited (“PAPCO” or “the Company”) owns and operates a strategic 786 km long dedicated pipeline network used primarily for transporting White Oil, stretching from Port Qasim and Kemari to the mid-country region of Mehmood kot. With a transportation capacity of 8 million tons per annum—expandable up to 12 million tons—the pipeline is considered sufficient to meet upcountry fuel demands. Its unique and essential infrastructure positions PAPCO as a critical player in the country's energy logistics chain. In November 2021, the pipeline was successfully upgraded to transport both High-Speed Diesel (HSD) and Motor Gasoline (MOGAS), with the project funded through a mix of local syndicate debt and foreign borrowings. The company has successfully repaid its foreign loan, with only local borrowing of PKR 3,371 million remaining, which is scheduled to be fully repaid by 2027.PAPCO’s ratings reflect its strategic national importance and strong business model, supported by a USD-based tariff structure that provides revenue sustainability and a natural hedge against exchange rate volatility. In 1HFY25, PAPCO delivered 1,525,005 metric tons of HSD (up 28% YoY) and 951,208 metric tons of MOGAS (up 33% YoY), significantly boosting its financial performance. The Company posted a topline of PKR 7.145 billion and a bottom line of PKR 3.153 billion in 1HFY25, compared to PKR 5.604 billion and PKR 1.790 billion, respectively, in SPLY. The liquidity profile remains strong, underpinned by substantial short-term investments and consistent cash generation backed by strong profit margins. PAPCO also benefits from its affiliation with PARCO, which oversees governance and operational support, while Wafi Energy (formally Shell Pakistan) has nominated the CFO, further strengthening the company’s management structure. Having fully repaid its foreign loan, the company is now exploring opportunities for expansion.
The ratings are anchored in PAPCO’s sustainable business model and its critical role in the country’s overall petroleum transportation network. The company's continued system share in national petroleum movement remains a key factor for rating stability. Timely execution of fuel supply agreements with multiple OMCs and reliable delivery of products are essential to maintain operational credibility, while consistent adherence to strong performance indicators is imperative to support the company’s risk profile and uphold its current ratings.

About the Entity
Pak-Arab Pipeline Company Limited (PAPCO) plays a crucial role in Pakistan’s energy infrastructure. The company’s majority shareholding (62%) is held by Pak-Arab Refinery Company (PARCO), which is primarily owned by the Government of Pakistan. Wafi Energy (formerly Shell Pakistan) and Pakistan State Oil (PSO) hold 26% and 12% stakes, respectively. PAPCO’s pipeline network is designed to transport both imported and locally produced High-Speed Diesel (HSD) from multiple sources. The company is governed by a ten-member Board of Directors representing all shareholders. Mr. Momin Agha serves as Chairman of the Board. Mr. Irteza Ali Qureshi, a UK-qualified Chartered Accountant with over 25 years of industry experience, serves as Managing Director of PARCO and Chief Executive Officer of PAPCO. He is supported by Mr. Syed Muhammad Haris, Chief Financial Officer, an MBA with extensive experience in the oil and gas sector, along with a capable and experienced management team.