Pakistan is preparing to renegotiate its liquefied natural gas (LNG) import agreement with Qatar as reduced industrial activity and weaker power demand create an oversupply problem, government sources have said.
At a recent meeting, the Economic Coordination Committee (ECC) allowed the Petroleum Division to start formal talks with Qatar. Minister Ali Pervaiz Malik is likely to travel to Doha soon, though Pakistani officials admit there is no certainty Qatar will accept a revision in volumes.
The existing contracts, signed in 2016 and 2021, allow imports of up to 6.75 million tonnes of LNG annually until 2031. But energy planners now project at least 51 unwanted cargoes between mid-2025 and 2026, valued between $1.2 and $1.5 billion.
The surplus has left policymakers with difficult choices. Pakistan can request Qatar to reduce monthly cargoes, defer supplies beyond the current end date, or apply a contractual clause where Qatar sells excess LNG to third parties and bills Pakistan for any price difference.
Officials said the imbalance has forced the curtailment of cheaper domestic gas production, damaging oil and gas companies and reducing output of crude and LPG. Imported LNG is priced at roughly Rs3,500 per unit, making it unaffordable for households without subsidies. Diverting it to residential use has already inflated consumer gas tariffs by hundreds of billions of rupees.