Govt Claims Rs. 1,000 Billion Savings by Diverting LNG Cargoes from Qatar

The federal government says it has saved over Rs. 1,000 billion by diverting 24 liquefied natural gas (LNG) cargoes from Qatar in 2026, as part of a broader reform agenda that also targets the country’s Rs. 2.6 trillion circular debt in the gas sector. Pakistan and Qatar reached an agreement to redirect LNG cargoes to other destinations next year due to low domestic demand. “By diverting 24 cargoes, the government will save more than Rs. 1,000 billion as no subsidy will be required for lifeline gas consumers,” an official said. The government’s policy reforms and administrative actions have also attracted investment from state-owned oil and gas companies in Turkiye and Azerbaijan, helped settle outstanding invoices, and slowed the growth of circular debt in the gas sector, according to Express Tribune. Pakistan has been reducing indigenous gas supply in response to LNG imports and is pursuing various initiatives to attract investment in the energy sector. Sui Northern Gas Pipelines Limited (SNGPL) and Pakistan State Oil (PSO) had initially estimated a surplus of 177 cargoes between July 2025 and December 2031, averaging 24 cargoes per year. Sources told The Express Tribune that the Pakistan-Qatar deal to divert 24 LNG cargoes in 2026 is based on a net proceeds differential formula. If Qatar sells the LNG in the open market at a price below the contract price, Pakistan will bear the loss, which will eventually be passed on to LNG consumers. The Oil and Gas Regulatory Authority (Ogra) will allow public gas utilities to recover the net differential. The Economic Coordination Committee (ECC) previously approved PSO’s deal for the diversion of 24 LNG cargoes in 2026. Pakistan and Qatar have two LNG supply agreements, with Pakistan receiving nine cargoes per month, in addition to one monthly cargo from Italy’s Eni. The LNG diversion is expected to support local exploration companies, including Oil and Gas Development Company (OGDC), which has received Rs. 82 billion following invoice settlements. OGDC’s settlement followed policy and administrative interventions by the government, including measures by the Petroleum Division to ensure timely payments by Sui, thereby curbing the accumulation of circular debt. OGDC is also receiving returns on Term Finance Certificates as scheduled, with the principal amount already fully received. These efforts have restored international confidence, leading to recent agreements with Turkiye. A technical team from Azerbaijan’s SOCAR is set to visit this month for meetings at OGDC to explore upstream petroleum opportunities, including onshore and offshore exploration licences and international collaboration.