Pakistan plans to renegotiate its long-term LNG supply agreement with Qatar to reduce costs as the country faces rising energy demands, Pakistani Petroleum Minister Musadik Malik announced on Friday.
Malik stated that the current deal with Qatar is too expensive and confirmed that better terms will be sought next year, according to a report by The News. He added that Pakistan’s existing LNG agreement with Qatar is pricier compared to other international deals.
Natural gas accounts for about one-third of Pakistan’s power generation. The country aims to lower energy costs amid an ongoing economic crisis that has plagued Pakistan since 2022. Although power consumption has decreased due to the crisis, the federal government still faces financial obligations from long-term power agreements with independent producers.
Pakistan has sought financial support to ease its economic troubles, reaching out to Gulf nations like Saudi Arabia and the UAE, as well as international organizations such as the IMF and World Bank.
The country has also struggled with high global energy prices in 2022 and 2023, which pushed it out of the international LNG spot market.
Pakistan now views its long-term LNG deal with Qatar as costly. The 10-year agreement includes a clause allowing either party to review or terminate the deal after a decade.
At the end of 2024, Pakistan deferred LNG shipments from Qatar, pushing them to 2026 instead of 2025. Malik explained that the country currently has a surplus of LNG, so it is not importing additional cargoes at the moment. The deferment does not result in financial penalties, the minister confirmed.
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