Pakistan has urged Qatar to divert 24 of its contracted liquefied natural gas (LNG) cargoes to the international market in 2026, amid declining domestic demand and an oversupply of gas in the country,
The move comes as Pakistan’s LNG infrastructure faces constraints, with storage and distribution capacities under strain due to lower-than-expected demand from the industrial and power sectors.
The Petroleum Division officials involved in the annual delivery plan discussions say the proposal will be finalised by the end of October. The request falls under the net proceed differential (NPD) clause in Pakistan’s long-term LNG agreements with Qatar.
While the clause allows for the resale of excess cargoes, it offers little financial relief: Qatar retains any profit from international sales, while Pakistan must absorb any losses if the spot market price is lower than the contract rate.
“By contrast, Pakistan’s agreement with Italian energy firm ENI includes a more favourable NPD clause, allowing for profit and loss sharing with Pakistan LNG Limited (PLL). As a result, the government is already diverting one ENI cargo per month to the international market in 2025 and plans to continue this practice in 2026, excluding the month of January.”
Pakistan currently imports nine LNG cargoes from Qatar each month, five under a 15-year contract priced at 13.37% of Brent crude, and four under a 10-year contract priced at 10.2% of Brent. Both agreements are based on rigid “Take-or-Pay” terms, which require payment regardless of whether the gas is consumed.
These imports were originally intended to supply four RLNG-based power plants in Punjab, which are now running at significantly reduced capacity.
Due to a sharp decline in demand, Pakistan is facing an annual surplus of 35 LNG cargoes, including 11 from ENI. This oversupply has triggered operational challenges, with excessive gas accumulation in the RLNG pipeline system.
