Pakistan weighs over $1 billion LNG imports to avert winter gas shortage

Pakistan is weighing 10 spot cargoes of liquefied natural gas (LNG) worth over $1 billion to guard against a possible winter gas shortage. According to The News, the Petroleum Division and the National Crisis Management Cell differ over the cost and volume of imports. Prime Minister Shehbaz Sharif is expected to make the final call.

The Petroleum Division has proposed buying 10 spot cargoes for December to February demand, whereas the NCMC favours existing supply contracts to protect foreign exchange reserves. LNG prices have topped $27 per million British thermal units, with delivered costs possibly reaching $30 per MMBtu and each spot cargo potentially costing over $100 million. The uncertainty is compounded by QatarEnergy's force majeure, extended twice and in place until November 6, amid regional conflict and shipping disruption through the Strait of Hormuz.

The NCMC thinks more than 12 cargoes could come through existing deals until February 2027, priced at 13.37% of Brent crude, though the force majeure clouds their availability. A compromise would buy five spot cargoes for an estimated $500 million while diplomatic efforts seek 17 Qatari cargoes through February 2027, with deliveries dependent on regional security. Sui Northern Gas Pipelines Limited's winter requirement is projected to jump from 500 MMCFD to 1,550 MMCFD, and Sui Southern Gas Company's from 300 MMCFD to 500 MMCFD. A shortfall could mean supply curtailments for export industries, CNG stations, cement and power generation.