Pakistan to Seek Deferral of 177 LNG Shipments From Qatar

Pakistan will ask Qatar to defer 177 liquefied natural gas (LNG) cargoes over the next five years after a sharp decline in domestic gas consumption left the country facing a glut. Officials said the deferred cargoes, valued at $5.6 billion, would instead be taken in 2031-32, aligning with the expiry of one of Pakistan’s two government-to-government LNG supply agreements with Doha. According to a report by a national daily, Pakistan will also propose a second arrangement, requesting Qatar to divert at least two of its term cargoes per month in 2026 to the international market without affecting Pakistan’s supply. The report stated the glut stems from reduced offtake by both the power and export sectors, leaving 177 cargoes surplus between October 2025 and 2030. Each cargo is valued at around Rs. 9 billion, making their combined cost $5.6 billion at prevailing exchange rates. Under long-term contracts, Pakistan currently imports 120 cargoes annually, including 108 from Qatar and 12 from Italy’s ENI. The official explained that while the contracts are structured on a “take-or-pay” basis to guarantee supply for four RLNG power plants in Punjab, the power sector has repeatedly failed to utilize imported gas as per agreements, aggravating the crisis. A delegation led by Federal Minister for Petroleum and Natural Resources Ali Pervaiz Malik, including Petroleum Secretary Momin Agha, SIFC Coordinator Lt-Gen Sarfraz, and PSO Managing Director Syed Taha, is scheduled to depart for Qatar today (Monday) to formally present the proposals. The team must also finalise by September 15 the Annual Delivery Plan for 2026, which determines the schedule of cargo arrivals. Officials argue that while the agreements allow Pakistan to begin renegotiations under the “price opening clause” by March 2026, waiting until then could prove risky as the LNG surplus is set to worsen. “We decided to settle the issue earlier,” the official said, warning that five cargoes already deferred from 2025 will arrive in 2026, further intensifying the glut. Pakistan’s contracts with Qatar cover nine monthly cargoes, five priced at 13.37 percent of Brent and four at 10.2 percent, under 15- and 10-year terms. By contrast, the agreement with ENI allows Pakistan to divert its one monthly cargo to the spot market and share profits or losses, an arrangement not available under the Qatari contracts. If Pakistan asks Qatar to sell diverted cargoes, the losses will be borne by Islamabad, while any profit remains with Qatar. The report also revealed that Pakistan’s LNG glut has created dangerous pressure levels in the transmission system. The main RLNG pipeline, which is designed to remain below the 5bcf line-pack pressure mark, has been consistently running at 5.17bcf. To prevent rupture, authorities have shut down local gas wells producing between 270 and 400mmcfd. Data shows the power sector is currently consuming 510mmcfd of RLNG against its contracted 800mmcfd, while the export sector has slashed offtake to just 100mmcfd from 350mmcfd due to the high cost of imported gas, priced at Rs. 3,500 per MMBtu plus a 5 percent levy. The state-owned SNGPL says the failure of the power sector to honour its contractual commitments has forced curtailment of local gas supplies in order to protect the transmission system.