KARACHI: Pakistan has reached an agreement with Italy’s Eni to cancel 21 liquefied natural gas (LNG) cargoes scheduled under a long-term contract, in a bid to manage excess gas supply in its distribution network, according to an official document and industry sources.
A letter from Pakistan LNG Limited (PLL) to the Ministry of Energy dated October 22 revealed that 11 cargoes planned for 2026 and 10 for 2027 will be scrapped at the request of Sui Northern Gas Pipelines Limited (SNGPL). Only one cargo each in January 2026 and 2027, and another in December 2027, will be retained to meet peak winter demand.
Sources confirmed that Eni agreed to the cancellations under the contract’s flexibility clauses. Given the current high global demand for LNG, suppliers can earn more from spot market sales than from fixed long-term contracts.
The decision marks one of Pakistan’s most significant moves to curb LNG imports, driven by lower industrial demand and rising renewable generation that have left the system with surplus gas.
Under a deal signed in 2017, Eni was contracted to supply one LNG cargo per month until 2032, with flexibility to divert shipments elsewhere. However, with the ongoing demand slump, Pakistan is also in talks with QatarEnergy to renegotiate supply terms, possibly deferring or reselling contracted cargoes. A Qatari technical team recently visited Karachi to review future scheduling, sources said.
Pakistan’s long-term LNG deals with Qatar and Eni together account for about 120 cargoes annually. Yet, imports have declined sharply this year as solar and hydropower generation increased and power producers reduced gas-based electricity output.
The oversupply has prompted authorities to sell gas at discounted rates, limit local production, and even consider offshore storage or re-export options. Data from Kpler shows that Eni’s last cargo arrived at the GasPort terminal on January 3, and both sides have agreed that no deliveries will take place in 2025.
In 2024, Eni supplied a total of 12 cargoes to Pakistan before the cancellations were finalized.
By Reuters
