(CTN News) – The Pakistani government is set to approach Qatar with a request to allow the resale of liquefied natural gas (LNG) imported from Doha in the spot market if domestic demand falls below expected levels, a senior official from the Ministry of Energy informed The News.
This move comes in light of a long-term LNG supply contract signed between Islamabad and Doha in 2016, with a scheduled price revision due in February 2026.
Pakistan Seeks Qatar’s Approval
Under the terms of the agreement, Pakistan State Oil (PSO) is obligated to accept LNG supplies regardless of domestic demand, posing logistical challenges for Sui Northern Gas Pipeline Limited (SNGPL) when there is excess gas.
Officials revealed that diplomatic channels will be utilized to negotiate with Qatar, seeking either the cancellation of shipments or permission to sell them on the spot market in case of inadequate domestic demand for LNG.
The disclosure was made during a public hearing conducted by the National Electric Power Regulatory Authority (Nepra) on Friday.
The hearing addressed a petition by power distribution companies seeking approval to levy an additional Rs3.41 per unit from consumers due to fuel adjustments for May 2024.
During the hearing, power distribution companies highlighted that the actual fuel rate amounted to Rs9.12 per unit, significantly higher than the reference price of Rs5.7 per unit, resulting in a necessary increase of Rs3.41 per unit.
They also noted a 5% decrease in electricity consumption attributed to weather conditions, with total demand in May 2024 reaching only 17,000 megawatts.
LNG played a more prominent role in electricity generation compared to coal, with LNG-based electricity costing Rs24.7 per unit.
Officials emphasized the importance of accurately forecasting LNG demand months in advance, citing the risk of increased line pack pressures on gas utilities due to unexpected drops in power-sector consumption.
The hearing also revealed concerns about the low share of net metering in the energy mix, prompting intervenors to accuse the Power Division of unfairly criticizing net metering. They argued that net metering users contribute positively to the national grid, particularly by consuming more electricity at night.
Moreover, questions were raised during the hearing regarding a coal scandal at the Sahiwal coal power plant, cases lost by the Central Power Purchasing Agency (CPPA) in international courts, and the escalating circular debt in the power sector.
While defending the power distribution companies’ stance, the CPPA declined to address these queries during the hearing, stating their relevance was outside the scope of the proceedings and suggesting that intervenors submit written queries for further consideration.