Islamabad: Pakistan is set to initiate negotiations with Qatar over future LNG supply arrangements, months ahead of a key contractual price review scheduled for March 2026.
The early move comes amid a worsening surplus of re-gasified liquefied natural gas (RLNG), largely caused by consistent underutilization by the power sector, The News reported.
A senior Petroleum Division official confirmed that Federal Minister for Petroleum and Natural Resources, Ali Pervaiz Malik, will lead a delegation to Qatar by the end of August to begin discussions.
The visit is aimed at reshaping delivery schedules and laying the groundwork for upcoming pricing talks under two long-term LNG deals.
“Technically, talks on the price reopening clause should begin in March 2026, and the full negotiation process would likely take six to eight months,” the official said. “But given the evolving crisis and deferred cargoes piling up, we’re moving ahead of schedule.”
Under existing agreements, Pakistan imports nine LNG cargoes monthly from Qatar, five priced at 13.37% of Brent crude and four at 10.02%, through 15-year and 10-year take-or-pay contracts.
These supplies are intended primarily for four RLNG-powered plants in Punjab. However, the power sector has failed to offtake the committed volumes, breaching contract terms and triggering a buildup of unused gas.
Adding to the pressure is one additional cargo per month purchased from Italian firm ENI. Since February 2025, these shipments have been regularly diverted to the international spot market, a trend expected to continue through December.
Though Pakistan has the option to divert Qatari LNG cargoes to global buyers under the Net Proceeds Differential (NPD) clause, the terms are stricter than with ENI. Any profit from Qatar-sold cargoes goes entirely to Qatar, while Pakistan must absorb any losses if the gas is sold below contracted prices.
In contrast, profits and losses under the ENI agreement are shared with Pakistan LNG Limited (PPL).
During the upcoming talks, Pakistani officials plan to gauge Qatar’s position on renegotiating supply terms, potentially cutting volumes or adjusting prices post-2026.
The price reopening clause allows Pakistan to request a revision in pricing and quantities, a right it aims to exercise proactively to prevent further accumulation of excess gas.
The official painted a concerning picture of the current situation, warning that the underconsumption of RLNG has pushed the national gas system to a critical point.
As of August 3, the RLNG pipeline system’s pressure reached 5.170 billion cubic feet (bcf), well beyond the 5 bcf safety threshold.
The dangerously high pressure has forced authorities to shut down gas wells producing 350 to 400 mmcfd to prevent a possible system rupture.
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