ISLAMABAD: The government has yet to approve a proposed $2 billion liquefied natural gas (LNG) import plan to meet Pakistan’s winter gas demand, despite warnings from the Petroleum Division that further delays could lead to supply disruptions for industries, power plants and fertiliser manufacturers.
Thank you for reading this post, don't forget to subscribe!According to government officials, the Petroleum Division has sought approval from the Cabinet Committee on Energy (CCOE) to arrange 22 LNG cargoes for the November 2026 to February 2027 period, with supplies intended for residential consumers and the power sector.
The proposed imports include cargoes from Qatar, Azerbaijan and the United States. However, uncertainty surrounding deliveries under Pakistan’s long-term LNG agreement with Qatar has increased the likelihood of relying on more expensive spot-market purchases.
Officials estimate that importing 22 cargoes at an average cost of $87 million each would require nearly $2 billion. The government had initially projected an import bill of around $1.5 billion, assuming supplies from Qatar at approximately $12 per million British thermal units (MMBTU).
Petroleum Minister Ali Pervaiz Malik said the matter remained pending before the CCOE. Although Prime Minister Shehbaz Sharif has chaired meetings to review the winter fuel situation, a formal decision on the proposed imports has yet to be taken.
The Petroleum Division has warned that gas demand could nearly double during winter, rising from 850 million cubic feet per day (mmcfd) to 1,600 mmcfd. Demand on the Sui Northern Gas Pipelines Limited (SNGPL) network is projected to increase from 550 mmcfd to 1,100 mmcfd.
Under the proposed gas load-management plan, domestic consumers would receive priority supplies, particularly during cooking hours. Supplies to industry, power plants and fertiliser manufacturers would depend on availability, while compressed natural gas (CNG) stations could face restrictions, especially in December and January.
In severe shortages, gas supplies to industrial, cement and CNG sectors could be curtailed further to protect household consumption.
The proposed import plan also envisages Pakistan LNG Limited arranging four cargoes from Azerbaijan, Pakistan State Oil coordinating four cargoes with other market participants, and exploring three cargoes through a US government-nominated supplier.
The delay has also raised concerns over fertiliser production. According to the Food Ministry, the suspension of operations at Fauji Fertiliser Bin Qasim, FatimaFert and Agritech could result in a monthly urea shortfall of 109,000 tonnes.
The Petroleum Division has assessed the financial implications of importing LNG against importing urea, concluding that LNG imports and supplies could carry higher costs for a single month than importing urea and providing subsidies.
The government now faces the challenge of securing sufficient winter fuel supplies while managing the financial burden of LNG imports, protecting foreign exchange reserves and minimising disruptions to households and key economic sectors.
Story by Shahbaz Rana
