Pakistan to increase Qatar LNG volumes

Qatar could be set to increase LNG sales to Pakistan as Islamabad strives to offset a crippling fuel crunch, Bloomberg reported June 7.

The biggest roadblock in negotiations appears to be whether Qatar has enough capacity to fulfil extra orders, however there is optimism that extra gas to Pakistan could be delivered later this year, Bloomberg said.

Qatargas initially signed a 15-year sales and purchase agreement to supply 3.7mn metric tons/year of LNG to Pakistan State Oil Company in 2015. In the following year, it agreed a second long-term supply deal for a 20-year term with Global Energy Infrastructure Ltd. A third deal for 3mn mt/yr was signed in February 2021 between Pakistani State Oil Company and Qatar Petroleum.

Following the election of Pakistan's new prime minister, Shehbaz Sharif, in April, attention has again turned to resolving the fuel shortages that have consistently crippled its economy. Pakistan suffers from rolling power outages, particularly in the summer demand season. Power outages in urban areas can last four to six hours every day, and energy access in the countryside is even worse.

Tighter oil and gas markets due to the turmoil in Ukraine have exacerbated the situation. While prices for natural gas have soared globally over the past year, the impact in Pakistan is even greater since its currency has hit record lows over the same period.

No spot award tender was issued by state-owned supplier Pakistan LNG last week as two suppliers were "disqualified". A deal with Qatar is just one of the long-term LNG purchase options that Islamabad has on the table, The News said.