KARACHI/SINGAPORE (Reuters):
Pakistan is exploring options to sell excess liquefied natural gas (LNG) cargoes as a growing supply glut threatens to cost domestic gas producers up to \$378 million annually, according to an official presentation and government sources.
The country currently has at least three surplus LNG cargoes—imported under a long-term contract with top supplier Qatar—and limited domestic demand, forcing authorities to sell gas at steep discounts to local users.
Gas-fired power generation, historically a major consumer of LNG, has steadily declined over the past three years, with solar power gaining ground, data from energy think-tank Ember shows. As a result, local gas producers have been forced to curtail output.
To manage the surplus, the state-owned Oil and Gas Development Company Limited (OGDCL) is considering using rented tankers for offshore storage and potential onward sale of LNG. “Excess LNG in the gas network has resulted in significant production operations impact for local exploration and production companies over the last 18 months,” OGDCL said in its May 29 presentation.
Pakistan has already deferred five LNG shipments from Qatar without penalties, shifting deliveries from 2025 to 2026. However, it remains unclear whether the country’s long-term contract with QatarEnergy permits resale of LNG, as such deals typically include destination clauses restricting re-exports.
Petroleum Minister Ali Pervaiz Malik declined to comment on the OGDCL presentation but acknowledged that renegotiating the Qatar contract is “complex” and could take at least a year. He noted that while Pakistan can decline LNG vessels, doing so could trigger penalties.
“The anticipated summer demand spike has not materialized,” the OGDCL report noted, further exacerbating the LNG surplus situation.
Reporting by Ariba Shahid and Sudarshan Varadhan; editing by David Evans
