Ghani Chemical Industries Limited (GCIL), the Pakistan Stock Exchange-listed industrial and medical gases producer, has taken a major step into energy processing. At a board meeting held on September 14, 2026, the company’s directors approved a contribution of up to Rs. 2.01 billion to a newly formed limited liability partnership, G3 Oil & Gas Conversion LLP, in which GCIL will hold an 84 percent partnership interest.
The move positions the industrial gases company to convert stranded, low-pressure and flare gas into saleable products such as CNG, LPG and hydrocarbon condensates — a significant diversification beyond its core gases business.
Key Takeaways
- GCIL’s board approved a contribution of up to Rs. 2.01 billion for an 84% stake in G3 Oil & Gas Conversion LLP, the vehicle for three gas conversion projects.
- The Rs. 6.02 billion plan would be funded by up to Rs. 4 billion in project debt, a Rs. 1.16 billion rights issue, and Rs. 850 million from internal resources.
- Shareholder and regulatory approvals were still pending, with an EOGM held in Lahore on October 10, 2026.
What the board approved
The Rs. 2 billion-plus contribution is part of a larger composite transaction that also includes a proposed Rs. 1.16 billion rights issue. Together, these measures will fund GCIL’s entry into three gas conversion projects: Sono Lashari, Jandran and Maiwand.
The board recommended issuing up to 116,374,900 Class B Tracking Shares at Rs. 10 per share, without premium, which would raise approximately Rs. 1,163,749,000 if fully subscribed. Eligible shareholders would receive roughly 204 tracking shares for every 1,000 ordinary shares held — about 20.40 percent of the company’s existing paid-up ordinary share capital.
The Rs. 6.02 billion project plan
The three gas projects together are estimated to cost Rs. 6.02 billion, to be financed through a combination of project debt and equity:
| Funding component | Amount | Share of total |
|---|---|---|
| Project debt | Up to Rs. 4.00 billion | ~66.54% |
| Project equity | Rs. 2.01 billion | ~33.46% |
| Rights issue proceeds | Rs. 1.16 billion | Part of equity |
| Internal resources | Rs. 850 million | Part of equity |
The project vehicle — referred to as the “Project Silo” — will handle the procurement, processing, conversion, storage, transportation and sale of indigenous raw, low-pressure, stranded and flare gas. Of GCIL’s 84 percent interest in the venture, an effective 48.54 percent of the project’s economics is attributed to the tracking shareholders, while the remaining 16 percent partnership interest is earmarked for separately valued service contributions from other partners.
New vehicle already incorporated
The plan gained momentum in early October. On October 5, 2026, GCIL informed the bourse that G3 Oil & Gas Conversion LLP had been duly incorporated with the Securities and Exchange Commission of Pakistan (SECP) on October 2, 2026, under the Limited Liability Partnership Act, 2017. The LLP will serve as the project silo for the Sono Lashari, Jandran and Maiwand projects.
The development followed the company’s notice of an Extraordinary General Meeting (EOGM) dated September 18, 2026, scheduled for October 10, 2026 in Lahore, where shareholders were to vote on the rights issue and related corporate changes. The company’s share transfer books remained closed from October 3 to October 10, 2026 for the purpose of the meeting.
An important caveat: while the board has approved the Rs. 2.01 billion contribution, the investment, guarantees, asset transfers and the rights issue itself remain conditional on shareholder approval at the EOGM and other regulatory clearances. As of this writing, the company had not yet announced the EOGM’s outcome.
What are tracking shares, and why do they matter?
Class B Tracking Shares are a distinct class of preference shares whose economic value is tied to the performance of one specific business — in this case, the three gas projects — rather than to GCIL as a whole.
Holders would be entitled to a preferential dividend equal to 57.79 percent of eligible net distributions GCIL actually receives from the project vehicle. Notably, the company has clarified that tracking shareholders get no direct ownership, partnership interest, asset title or management control over the project silo itself — their claim is limited to a defined share of distributions, and dividends are not guaranteed.
This structure is designed to let GCIL ring-fence the new venture’s economics while giving investors a way to participate in the gas projects’ upside separately from the core industrial gases business.
The strategic logic
For Pakistan, the project addresses a persistent problem: stranded and flare gas that currently goes unutilized. Converting it into CNG, LPG and condensates creates value from a wasted resource at a time when imported fuels strain the country’s finances.
For GCIL, the move builds on an existing foothold. The company has been awarded a five-year contract by Oil & Gas Development Company Limited (OGDCL) to develop and process natural gas from the Sono Lashari field in Sindh, with commercial operations targeted for the first quarter of 2027. GCIL has indicated the Sono Lashari project alone could generate indicative annual revenues of Rs. 1.5 to 2 billion once operational.
Risks on the table
GCIL has itself flagged a long list of risks, and investors should weigh them carefully:
- Multiple statutory and regulatory approvals are still required.
- The availability and terms of the Rs. 4 billion in project debt are not yet locked in.
- Feed gas availability, construction and cost overruns during the EPC phase, and product demand and pricing all pose execution risks.
- Guarantees and valuation or tax risks around transferring project assets into the new vehicle could surface.
The company is coming from a position of financial strength — credit rating agency VIS noted that the parent reported a profit of Rs. 2 billion in 2025 with an equity base of Rs. 9.2 billion — but the transaction will materially reshape the company’s capital structure and risk profile.
What investors should watch
- EOGM outcome: Whether shareholders approved the rights issue and related resolutions at the October 10, 2026 meeting.
- Debt finalization: The terms of the up-to-Rs. 4 billion project debt facility.
- OGDCL project milestones: Progress toward the Q1 2027 commercial-operations target for Sono Lashari.
- Rights issue timeline: Book closure dates and the formal offer document, to be announced once shareholder approval is secured.
Ghani Chemical’s approved Rs. 2 billion investment is one of the more ambitious diversification moves by a Pakistani industrial gases company in recent years. If the shareholder vote clears and the projects execute on schedule, it could open an entirely new revenue stream. If not, investors will have paid for the privilege of watching — which is exactly why the tracking-share structure, for all its complexity, exists.
