Pakistan Negotiates Deferment of 177 LNG Cargoes Amid Sharp Drop in Gas Demand
Islamabad, August 25, 2025 — Facing a steep decline in domestic gas consumption, Pakistan is negotiating to defer 177 liquefied natural gas (LNG) cargoes scheduled under long-term contracts with Qatar. The goal is to shift deliveries to 2031–32, potentially postponing a staggering $5.6 billion liability.
Why the Surplus?
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A dramatic reduction in LNG use—driven by underused gas-fired power plants and sluggish industrial demand—has led to an unprecedented LNG glut. This excess has burdened the transmission system and inflated contractual liabilities.
Initially, Pakistan deferred five cargoes from Qatar to 2026 without penalty and is also negotiating deferrals from other suppliers.
Government Authorized to Renegotiate
The Economic Coordination Committee (ECC) has formally authorized the Petroleum Division to enter talks with Qatar to manage the surplus effectively. Pakistan could trade deferral for delivery extensions—an option with potentially lighter financial impact.
Impact & Broader Response
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Holding unused LNG cargoes is costing the country billions. Local energy producers are struggling to absorb the excess imported volume.
In parallel, Pakistan is exploring offshore storage and resale options for surplus LNG cargoes—though contract terms with Qatar may limit these moves.
The ongoing slump in electricity demand, partly caused by reforms that sidelined high-cost LNG power plants and rising tariffs, continues to aggravate the surplus.
Why It Matters
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Massive deferred liability: $5.6 billion in LNG costs now postponed—a vital reprieve for Pakistan’s struggling economy.
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Contract flexibility: The move highlights how rigid procurement agreements can risk economic stability when demand shifts unexpectedly.
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Energy policy shift: It underscores the urgent need for demand-responsive energy planning, diversification, and climate-resilient strategies.
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