The
country has at least three LNG cargoes in excess that it imported from top
supplier Qatar and has no immediate use for, and is currently selling natural
gas at steep discounts to local users.
Power generation from gas-fired power plants, which has
historically accounted for a lion's share of LNG use in the country, has
declined for three straight years ended 2024, with cheaper solar power use
dramatically gaining at the expense of gas-fired generation, data from energy
think-tank Ember showed.
Pakistan
is currently exploring the possibility of transferring LNG cargoes to rented
tankers for "offshore storage and onward sale," state-owned oil and
gas producer OGDCL said in a presentation to industry and government.
"Excess LNG in the gas network has resulted in
significant production operations impact for local exploration and production
companies over last 18 months," OGDCL said, adding that it had forced
curtailment of domestic supply.
The domestic industry could suffer US$378 million in losses
over the next 12 months at the current rate of curtailment, according to the
presentation dated May 29 reviewed by Reuters.
It is
not immediately clear if Pakistan's long-term LNG import contracts with
QatarEnergy allows for a resale of cargoes. One of the government officials
said the country was still exploring ways to do it.
Qatar typically has a destination clause in long-term supply
contracts with buyers that restrict where the cargoes can be sold.
Pakistan
has already deferred five contracted LNG cargoes from Qatar without
financial penalty, shifting delivery from 2025 to 2026, as the country grapples
with surplus capacity.
Pakistan's petroleum minister Ali Pervaiz Malik declined to
comment on the presentation, but said renegotiating contracts with Qatar was a
"complex" process that could take at least a year, and a final
decision on initiating it had yet to be made.
"While the existing contract with Qatar allows Pakistan
to decline vessels, doing so incurs penalties and other complications,"
Malik told Reuters.
The glut has stemmed from several gas-fired power plants,
previously operating under must-run contracts, now being sidelined, Malik said.
"It was expected that summer season will create
extraordinary demand but the trend indicates the opposite," OGDCL said in
the presentation.
