ISLAMABAD: Pakistan is weighing the option of importing liquefied natural gas (LNG) from the spot market to address potential supply disruptions triggered by the ongoing Iran conflict, while prioritising government-to-government agreements to avoid high costs.
Petroleum Minister Ali Pervaiz Malik said that Qatar’s force majeure situation has compelled Pakistan to explore expensive spot cargoes or alternative fuel options ahead of rising summer demand. Spot LNG prices have surged to between $20 and $30 per mmBtu amid escalating tensions in the Middle East.
The minister noted that any procurement decision would depend on whether prices remain viable for the power sector. Pakistan is also exploring existing arrangements with SOCAR under government-to-government frameworks to secure more affordable supplies.
In parallel, Pakistan has started rerouting some crude oil shipments through Saudi Arabia’s Red Sea port of Yanbu to bypass the strategically sensitive Strait of Hormuz. According to the minister, insurance costs on this route are comparatively lower than those associated with shipments passing through or near Hormuz.
Pakistan, which imports nearly all of its oil, remains vulnerable to global supply shocks despite reducing reliance on LNG in recent years. Gas continues to play a critical role in meeting peak electricity demand during the summer months.
To strengthen domestic supply, the country has initiated production from its highest-ever yielding oil and gas well. “We have arrangements in place to meet domestic and industrial requirements,” Malik stated, noting that gas shortages have not significantly disrupted industrial activity, with eight out of ten fertiliser plants currently operational.
Authorities are also evaluating the use of costlier alternatives such as furnace oil to reduce load-shedding, though this may lead to higher electricity tariffs. The minister cautioned that prolonged energy shortages could pose risks to food security if industrial and agricultural operations are affected.
By Reuters
