Pakistan is preparing a formal response to Qatar on whether to defer long-term liquefied natural gas (LNG) cargoes beyond 2030, as the country struggles with falling domestic gas demand and rising financial strain from surplus imports, according to officials.
Qatar has asked Islamabad to clarify if it wishes to postpone contracted shipments or allow Doha to sell part of the supply on the international market under the Net Proceeds Differential (NPD) clause. The move follows Pakistan’s request earlier this year to defer 177 LNG cargoes worth $5.6 billion — a proposal that also included cargoes contracted with Italian energy firm ENI, which fall outside Qatar’s supply agreements.
Under a revised plan, Pakistan now intends to consume 80 cargoes annually from Qatar, leaving 28 surplus shipments each year. Over five years, this amounts to 140 excess cargoes, valued at an estimated $4.4 billion based on current prices.
A senior energy official told The News, “Once Pakistan submits a formal proposal, Qatar will respond with a counter-offer. A decision will only be made after both sides reach mutual agreement.”
Oversupply Worsens Gas Crisis
Pakistan LNG Limited (PLL) has already been diverting one ENI cargo per month to the spot market since February due to reduced demand, a practice set to continue through December. Yet even with these diversions, Pakistan still faces an oversupply of about 24 cargoes annually.
The country currently imports nine cargoes a month from Qatar under two “take-or-pay” contracts: five under a 15-year agreement priced at 13.37% of Brent, and four under a 10-year deal priced at 10.2% of Brent. These contracts mainly fuel four RLNG-based power plants in Punjab, but the power sector has been unable to consume gas at the contracted levels.
At present, the power sector is using only 510 mmcfd of RLNG against the 800 mmcfd commitment. Export industries have also slashed consumption from 350 mmcfd to 100 mmcfd, citing high RLNG prices of Rs3,500 per MMBtu plus a 5% off-grid levy.
Infrastructure Strain and Economic Costs
The gas oversupply has pushed line pack pressure in the main RLNG pipeline beyond 5.17 bcf — above the safety threshold of 5 bcf — raising the risk of system failure. To ease pressure, authorities have shut down local gas fields, reducing output by 270–400 mmcfd. But such shutdowns risk permanent damage to wells and disrupt production of crude oil and LPG. Attock Refinery Limited has already warned of reduced crude supply hampering refinery operations.
Meanwhile, the government diverted RLNG worth Rs242 billion to the domestic sector in FY2024–25 alone to absorb excess supply.
The four RLNG power plants — Haveli Bahadur Shah, Balloki, Bhikki, and Trimmu — were originally designed to operate as “must-run” facilities under a 66% take-or-pay requirement. In 2020, the Power Division secured approval to reduce the commitment to 50%, allowing plants to run only when cost-effective under the Economic Merit Order. Officials argue that RLNG-based generation is now too expensive, increasing the overall electricity basket price and adding political pressure.
Talks with Doha
A high-level Pakistani delegation led by Petroleum Minister Ali Parvaiz Malik visited Doha on August 25 to brief Qatari officials on the worsening gas demand situation. Sources stressed that Islamabad values its long-term LNG supply ties with Qatar but acknowledged that deferment beyond 2030 is not covered under existing contracts.
“Pakistan must now come up with a legally sound and commercially viable plan,” an official noted. “Only then will Qatar consider offering relief or an alternative arrangement.”
For now, Doha awaits Islamabad’s formal submission before taking the next step.
