ISLAMABAD: Pakistan is negotiating with Qatar to postpone 10 liquefied natural gas (LNG) cargoes scheduled for next year, citing reduced electricity demand due to economic slowdown and unaffordable energy prices.
Petroleum Minister Musadik Malik revealed that five LNG cargoes under long-term agreements with Qatar for 2025 had already been cancelled, with discussions ongoing to defer another five. “LNG has become surplus as LNG-based power plants are sidelined, and the private sector is unwilling to purchase due to high costs,” he explained.
Pakistan typically imports 120–140 LNG cargoes annually, primarily under long-term contracts. However, no spot purchases have been made in nearly a year due to surplus electricity capacity and declining demand, which has fallen by 2–18% across months.
To mitigate the surplus, the government is encouraging independent power producers (IPPs) to end contracts early and has introduced a winter incentive package to boost electricity consumption. Despite these efforts, consumption has dropped significantly, averaging around 11,000MW compared to the installed capacity of over 40,000MW.
Saudi Investment & Refinery Developments
Mr. Malik highlighted progress in Saudi-Pakistan collaborations, noting $2.7 billion worth of memorandums of understanding (MoUs) signed in various sectors. Notably, one Saudi firm expressed interest in investing $1.7 billion in upgrading Pakistan Refinery Limited (PRL). A feasibility study for a new $8–10 billion greenfield refinery is also underway, with a Saudi roadshow planned after its completion.
Russian Oil Imports
Addressing questions on Russian oil, the minister clarified that challenges such as insurance, payment methods, and US sanctions risks had hindered negotiations. While a special purpose vehicle was initially established for public-sector imports during the previous government’s tenure, the caretaker government halted the framework, shifting the responsibility to the private sector. He dismissed claims of a discounted deal with Russia, stating the earlier import by PRL was a one-off arrangement.
The government remains focused on balancing energy imports with economic realities while pursuing strategic investments in the energy sector.
Story by Khaleeq Kiani
