ISLAMABAD: Pakistan is currently facing an oversupply of Liquefied Natural Gas (LNG), a situation largely attributed to its second long-term deal with Qatar. This agreement, initially envisioned to bolster energy security, has instead led to an expensive surplus of LNG within the country. The current government is now actively working to balance the nation’s energy demand and supply.
Petroleum Minister Ali Pervaiz Malik stated this in an informal media talk here on Thursday.
Pakistan Tehreek-e-Insaf (PTI) government signed a second long-term LNG deal with Qatar for initial supply of 200 million cubic feet per day (mmcfd). Supplies increased to 300 mmcfd in 2023 and 400 mmcfd in 2024. The contract will remain in place for 10 years.
Pakistan looking to sell excess LNG amid supply glut curbing local gas output: document
The minister said that expensive RLNG compelled the government to suspend indigenous 300 mmcfd gas production and is trying to manage the supply and demand side.
Responding to recently increased fix gas charges, he said that Rs150 billion subsidy to protected gas consumers in addition to Rs250 billion RLNG diversion from power to domestic consumers compelled the government to increase the fix charges by Rs200, adding that the system gas was still cheaper than the LPG.
The minister for energy stated that Pakistan and Iran are currently in arbitration in Paris regarding the Iran-Pakistan (IP) gas pipeline project.
A dedicated oversight committee, led by Deputy Prime Minister Ishaq Dar, is monitoring the situation, particularly in the wake of the recent conflict between Iran and the United States.
He said that the must be one energy ministry for better coordination and both divisions (petroleum and power) and finance should submit summary to cabinet with consultation.
The minister addressed concerns regarding private sector involvement in Regasified Liquefied Natural Gas (RLNG) import and marketing.
He stated that the two existing RLNG terminals lack sufficient capacity to accommodate private sector imports of the costly fuel.
Consequently, the deregulation of petroleum products is expected to be a gradual process.
Copyright Business Recorder, 2025
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