Pak-Arab Pipeline Company Limited (PAPCO), incorporated in 2000, is a public unlisted company in Pakistan. The company is regulated by relevant governmental authorities, including the Oil and Gas Regulatory Authority (OGRA).

PAPCO was established as part of a Public-Private partnership between leading Oil Marketing Companies (OMCs) in Pakistan, including Wafi Energy Pakistan Limited (formally Shell Pakistan Limited), Pakistan State Oil (PSO), TOTAL PARCO Marketing Limited, and Pak-Arab Refinery Limited (PARCO). The partnership aimed to construct and operate a US$ 480 million cross-country pipeline system designed to transport High-Speed Diesel (HSD) from Karachi ports to upcountry locations. In 2021, PAPCO successfully completed the up-gradation of its White Oil Pipeline (WOP), enhancing its capacity to transport both MOGAS (Motor Gasoline) and HSD.

PAPCO operates a state-of- the-art cross-country pipeline system, The Company has White Oil Pipeline (WOPP), to transport refined High-Speed Diesel and MOGAS from Karachi ports to up-country. Pipeline was commissioned in March 2005, comprising 786 Km of 26” dia cross-country pipeline, storage tanks, pumps and other allied facilities. PAPCO is a successful fuel carrier for the country. The pipeline network is entirely underground based except where there are water streams.

Pak-Arab Pipeline Company Limited (PAPCO) has a strong ownership structure, with the majority holding of 62% vested in PARCO, The remaining shares are distributed among key stakeholders: Wafi Energy Pakistan Limited (formally Shell Pakistan Limited) holds 26% and Pakistan State Oil (PSO) owns 12%. The company’s ownership structure is further supported by the signing of the Implementation Agreement (IA) between the Government of Pakistan, PARCO, PAPCO, and the Emirate of Abu Dhabi.

The ownership structure of PAPCO ensures stability, with PARCO holding the majority stake of 62%, predominantly owned by the Government of Pakistan, providing strong public sector backing. The remaining shares are held by reputable private entities like Wafi Energy Pakistan Limited and PSO ensuring a diverse and resilient ownership base.

PAPCO’s business acumen is strengthened by PARCO's majority holding, which is part of a strategic alliance, while its operational effectiveness stems from the collective contribution of all its partners.

PAPCO’s financial strength is anchored by its profound ownership structure, with PARCO as the main sponsor, providing crucial operational and financial support. This is further bolstered by the backing of key stakeholders.

The company is led by a ten-member Board of Directors (BoD), representing all shareholders. Mr. Momin Agha was appointed Chairman on September 25, 2023. The Board is responsible for setting the Company’s strategy, approving major decisions, ensuring compliance, and overseeing management performance.

Mr. Irteza Ali Qureshi is the newly appointed CEO of the Company. In addition to his CEO role, he serves as the Managing Director at PARCO. A UK-qualified Chartered Accountant with over 25 years of experience, Mr. Qureshi has worked extensively both within Pakistan and internationally. His diverse expertise includes Operations, Finance, Audit, Consultancy, Treasury, and Business Development.

From a financial governance perspective, the Company's Board of Directors, alongside the Audit Committee, maintains strong oversight over business operations and financial reporting. Over the course of the year, four board meetings were conducted, demonstrating satisfactory members attendance and engagement.

PAPCO’s external auditor, KPMG Taseer Hadi & Co., is a recognized member of the "Big Four" audit firms, holding a satisfactory Quality Control Review (QCR) rating from the Institute of Chartered Accountants of Pakistan. Additionally, KPMG is classified in category "A" on the panel of auditors maintained by the State Bank of Pakistan under Section 35 of the Banking Companies Ordinance, 1962. KPMG has provided an unqualified opinion on review of PAPCO’s six-month financial statement as of December 2024, affirming the accuracy and reliability of the company's financial reporting.

PAPCO follows a formal and well-defined organizational structure, with the Board of Directors providing overall oversight. The Company is divided into specialized departments, each managed by senior executives, ensuring clear roles and responsibilities. The CEO leads day-to-day operations, aligning the team with the Company’s strategic objectives for efficient governance and performance.

PAPCO’s management team consists of highly experienced professionals: Mr. Irteza Ali Qureshi, CEO, brings strong leadership in operations and finance; Mr. Syed Muhammad Haris, CFO (nominated by Wafi Energy Pakistan Limited), specializing in financial management; Ms. Syeda Ameer Batool, Company Secretary, skilled in corporate governance; and Mr. Sohail Suleman, Chief Technical Officer, with extensive technical operations experience. Together, they lead the company with a wealth of expertise across key domains.

The entire management team is highly qualified and has long-standing ties with the group. To ensure effective leadership, all reporting lines are directed to the CEO.

PAPCO has implemented advanced IT infrastructure across its operations, including an upgrade to SAP S/4HANA with IS-Oil, enhancing its financial management system for better control and efficiency.

PAPCO has implemented SAP S/4HANA integrated with the IS-OIL module, a specialized accounting and operations solution tailored for the oil and gas industry. This advanced ERP system provides a robust and transparent control environment, ensuring accurate, timely, and compliant financial and operational record-keeping. The implementation enhances process efficiency, strengthens internal controls, and supports best practices in data management and financial reporting.

In FY24, road transport accounted for 50% of oil movement in Pakistan, slightly down from 51% in FY23, while pipelines rose to 49% from 47%, reflecting improved efficiency following the 2021 upgrade of the 786 km White Oil Pipeline (WOP) by PAPCO, enabling MOGAS and HSD transport from Karachi to Mahmood Kot. Railways contributed only 1%, down from 2%, indicating limited use. Major pipelines are controlled by PAPCO and PARCO. PARCO operates a 2,000+km state-of-the-art pipeline network, including the white oil pipeline via PAPCO, enabling safe, efficient, and eco-friendly transport of crude and refined oil products.

PAPCO is the sole transporter of HSD and MOGAS through Pakistan's pipeline network, playing a key role in the POL supply chain from Karachi to Shikarpur and Mahmood Kot. With its recent expansion to include MOGAS transport, PAPCO provides alternative arrangements to OMCs to transport both HSD and MOGAS through the White Oil Pipeline (WOP).

In line with the petroleum industry's performance, PAPCO deliveries for 1HFY25 is approximately 2.476mln MT as compared to 1HFY24 was 1.889mln MT. Therefore, the Company's turnover for 1HFY25 clocked in at PKR 7.145bln (1HFY24: 5.604bln, FY24:11.127bln, FY23:10.569bln). The growth in topline revenue was primarily driven by higher-than-projected product deliveries. Against projections of 1.277 million MT of HSD and 0.892 million MT of MOGAS for 1HFY25, the Company successfully delivered 1.525 million MT of HSD (a 19% increase) and 0.951 million MT of MOGAS (a 7% increase), underscoring PAPCO’s enhanced operational efficiency and critical role in meeting the country’s growing fuel transport demands.

In 1HFY25, PAPCO's gross profit margin improved significantly to 64.1%, up from 46.5% in 1HFY24 (FY24: 45.5%, FY23: 49%, FY22: 58%). This improvement is primarily driven by a 27% increase in sales, reflecting strong revenue growth and better operational efficiency. The net profit margin also rose to 44% in 1HFY25, compared to 32% in 1HFY24 (FY24: 59.7%, FY23: 23%, FY22: 46%). This increase was mainly due to a 40% reduction in finance costs and non-core income from short-term liquid investments, helping to support the bottom line.

PAPCO’s MOGAS project, operational since November 2021, adds value to its product portfolio and supports a sustainable business model. The pipeline can transport 8 million tons of MOGAS per annum, with potential expansion to 12 million tons, meeting upcountry demand and ensuring long-term energy availability.

PAPCO’s working capital requirements are primarily influenced by its payable days, which decreased to 23 days in 1HFY25 (48 days in 1HFY24, 20 days in 1HFY23). Due to the Company’s business model, where storage tanks hold inventory only for customers, the inventory holding period remains minimal. As a result, PAPCO typically has negligible net working capital days. The company efficiently meets its working capital needs through internal cash flow, and for 1HFY25, the Company has not avail andy short-term borrowings for the working capital management

PAPCO has demonstrated strong ability to generate free cash flows from operations, reporting PKR 3.903 bln in 1HFY25 (compared to PKR 2.586 bln in 1HFY24, PKR 2.570 bln in 1HFY23, and PKR 2.232 bln in 1HFY22). This improvement in cash flow highlights the Company’s strong operational performance. The interest coverage ratio (FCFO/Finance Cost) for 1HFY25 stood at 8.9x (1HFY24: 3.5x, 1HFY23: 3.8x, 1HFY22: ~13.7x). The increase in coverage is mainly driven by a reduction in interest expenses—following the full repayment of the Company's foreign loan and comparatively stronger free cash flow from operations (FCFO) in 1HFY25. This indicates improved financial flexibility, with the company generating ample cash flow to comfortably cover its interest obligations.

PAPCO has effectively managed its capital structure in recent years, maintaining a comfortable leverage level. As of 1HFY25, the Company’s leverage stands at 17% (a decrease from 27% in 1HFY24 and 36.1% in 1HFY23). The company had a USD 25 million foreign currency loan from SCB-UK, with a mark-up rate of 3L+2.7%, payable in 12 equal installments starting from December 2021. PAPCO has fully drawn down a PKR 11.8 bln loan for the MOGAS project, and repayments have started. Currently, 47% of the local currency loan remains outstanding, while the foreign loan has been fully repaid.