36 LNG cargoes to become surplus in 2025, SIFC informed

ISLAMABAD: The Petroleum Division has informed the Special Investment Facilitation Council (SIFC) that due to less gas consumption and gas supply disconnection from Captive Power Plants (CCPs) by January 31 under the IMF diktat, the number of 13 additional LNG cargoes is likely to increase to 36. 

It must be recalled that Qatar has already deferred dispatch of five LNG cargoes to 2026, which were supposed to reach the country in 2025.

Among the 36 surplus LNG cargoes, six are those that will become additional after the deal tenure of PLL with KE for LNG supply would terminate by end of December 2025.

“We are now in contact with Qatar for deferment of import of 5 more LNG cargoes; but so far, there is no progress,” a senior official told The News. “We sensitised the executive committee of the SIFC that met on December 11, 2024,” he added. 

However, authorities are upset about how to deal with the surplus LNG cargoes. There is no clause in the agreement with Qatar and the ENI about diverting or selling the LNG cargo in the open market and, if the government refuses to inject the 36 RLNG cargoes in its system, it would be tantamount to sovereign default, which the government cannot afford.

However, the SIFC, as per the official sources, asked the Petroleum Division to explore the possibility of selling surplus RLNG to 3rd parties/ new customers while simultaneously devising a viable way forward for disposing around 2.8 million pending connection requests on RLNG rates by January 15, 2025. 

Since December 26, 2024, hydro generation will remain less than 1000MW because of canals’ closures till January 31. Due to it, the reliance on thermal electricity generation has increased to bridge the gap because of reduction in hydro generation, and RLNG-based power plants have started more consumption of imported gas for power generation. 

More importantly on account of the peak winter in January, the demand for the domestic sector had also increased manifold to 950mmcf in the jurisdiction of Sui Northern. So the line pack pressure has now dwindled to 4.4bcf from over 5bcf, but the average consumption in 12 months has remained at lower side.

Till December 2024, every month gas consumption went down by 150mmcf, owing to which 18 LNG cargoes were estimated to be surplus in 2025. Out of which, on the request of the government, Qatar rescheduled the import of 5 cargoes to 2026, which were to arrive in 2025. But now, under the expected scenario, 36 RLNG cargoes would become surplus. Pakistan could not consume it mainly because of low growth and reduced industrial activities and high gas tariffs.

In 2024, the line pack pressure increased many times due to LNG glut, putting the country’s national pipeline network in jeopardy because of a massive drop in gas consumption across the country.

Pakistan imports 120 LNG cargoes from Qatar under two GtG agreements in one year. Under the agreements, it imports nine LNG vessels a month (five cargoes a month under 13.37pc of Brent and 4 cargoes under 10.2pc of Brent). One cargo is imported through a term agreement with ENI. “This is how the country imports 10 LNG cargoes a month,” he said.