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Pakistan has decided to seek renegotiation of its LNG deal with Qatar after industrial slowdown and lower power demand left the country with more than 50 surplus cargoes over the next one-and-a-half years.
The Pakistan-Qatar LNG deal, set to expire in 2031, has created challenges for policymakers. Officials are weighing options between keeping 400 mmcfd of cheaper local gas production facilities closed while diverting costly imported gas to residential use or pursuing renegotiation of the contract.
The Economic Coordination Committee (ECC) has authorized the Petroleum Division to begin talks with Qatar in order to reduce import volumes and limit the diversion of LNG to households. Petroleum Minister Ali Pervaiz Malik is expected to travel to Doha, although it remains uncertain if Qatari authorities will be willing to revisit the agreement.
Official estimates suggest Pakistan will face at least 51 surplus LNG cargoes valued between $1.2 billion and $1.5 billion from July 2025 to December 2026. Malik has consistently urged that either the Power Division lift its full 600 mmcfd quota of imported gas or the government will have no choice but to seek renegotiation of the LNG deal with Qatar.
A Finance Ministry statement confirmed that the ECC reviewed the overall gas supply situation and directed the Petroleum Division to take measures to reduce losses and improve efficiency.
Sources highlighted three possible options under consideration for the Pakistan-Qatar LNG deal:
- Reducing monthly LNG cargoes to 6 or 7 instead of the current 9.
- Requesting an extension of the agreement with surplus deliveries deferred beyond 2031.
- Invoking the Non-Performance Damages (NPD) clause, which allows Qatar to sell gas to third parties and claim losses from Pakistan.
The agreement obligates Pakistan to pay for contracted LNG volumes regardless of consumption, though limited flexibility exists to adjust up to three cargoes annually.
The deal includes two long-term agreements signed in 2016 and 2021, together enabling imports of up to 3.75 million tonnes per annum (MTPA). The 2016 contract, priced at 13.37 percent of Brent crude, allows termination after 11 years if price renegotiations in 2026 fail. The 2021 deal has a shorter four-year review period starting in 2026 but also runs until 2031 unless renegotiated or ended earlier.
With surplus cargoes building up and energy costs mounting, the renegotiation of the LNG deal with Qatar has become a pressing issue for Pakistan’s energy planners.
