Pakistan requests Qatar to postpone LNG shipments due to reduced demand
In a bid to manage an anticipated surplus of liquefied natural gas (LNG) cargoes, the Pakistani government has authorised the Petroleum Division to renegotiate contract terms with QatarEnergy.
The decision comes as the country's state-owned oil company, Pakistan State Oil (PSO), has already exercised deferment in 2025, under the terms of its existing contracts. PSO, which signed two long-term sale and purchase agreements with QatarEnergy in 2016 and 2021, can request deferment of up to five cargoes in any contract year.
Pakistan's LNG import strategy is centred around two regasification terminals in Port Qasim, with a combined import capacity of about 9.8 million tonnes per year. In 2017, a separate 15-year supply contract was signed between Pakistan LNG and Eni.
The government plans to ask QatarEnergy to defer on LNG cargoes, as the surplus is forecasted to cost Pakistan $5.64bn until 2031, according to local media reports. Weakening domestic demand for imported LNG is reflected in the surplus, which is projected to total 177 over the next six years.
Notably, QatarEnergy, the world's largest LNG producer, is targeting a major increase in its production capacity to 142 million tonnes per annum before the end of this decade. Approximately 295 billion cubic meters per year of new LNG supply is expected to come online between now and 2030.
However, the name of the official responsible for negotiating with QatarEnergy on behalf of the Pakistani government to delay LNG tanker deliveries has not been publicly disclosed. In 2017, a memorandum of understanding between Pakistan and QatarEnergy was signed, setting the stage for further discussions.
The Economic Coordination Committee's authorisation marks a significant step in Pakistan's efforts to manage its LNG imports more effectively, ensuring a balanced energy mix and maintaining economic stability.
