Pakistan may face a natural gas shortage in the winter months as LNG flows from Qatar and the UAE have been severely disrupted. Masood Nabi, the CEO of Pakistan LNG (PLL), stated at the WPC energy conference in Riyadh that the winter challenges ahead for Pakistan will be serious.
Disruption in LNG Transit from the Strait of Hormuz
Nabi further explained that the main issue for Pakistan at present is not the lack of access to gas, but the severe disruption in LNG transit from the Strait of Hormuz. This disruption has arisen due to political and security conditions in the region, forcing Pakistan to turn to spot market gas purchases and pay high costs for each additional shipment.
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Last year, Pakistan sourced 99% of its LNG imports from Qatar. However, following the declaration of force majeure by Qatar in March due to Iranian attacks on the Ras Laffan LNG export hub, Pakistan has faced serious energy supply issues. In this situation, Pakistan has been forced to purchase LNG from the spot market, significantly increasing electricity production costs.
High Costs of LNG Purchases and Their Consequences
According to estimates, Pakistan will need to spend over one billion dollars to secure the necessary LNG during the winter months, as spot prices are rising, putting additional pressure on the country's financial resources. Given the disruption in supply from Qatar, Pakistan will need to purchase 10 additional shipments from the spot market for delivery between November 2026 and February 2027, which will be priced at double the cost of LNG imported from Qatar.
In recent months, some LNG shipments from Qatar have reached Pakistan, but these shipments have been due to direct guarantees from Iran to Pakistan for safe passage through the Strait of Hormuz. Meanwhile, demand for LNG in Asia and Europe has surged, and this competition has driven prices up. Given these conditions, Pakistan needs to quickly adjust its strategies for gas supply in the upcoming winter while also considering increasing domestic gas production.
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