Pakistan to renegotiate LNG deal with Qatar amid rising energy costs

ISLAMABAD: Pakistan is set to renegotiate its liquefied natural gas (LNG) supply agreement with Qatar, as the current 10-year contract includes provisions that allow either party to terminate or review it after a decade. This decision comes as the country aims to combat rising energy costs and secure better terms to meet its increasing energy demands, reported The News.

Federal Minister for Petroleum Musadik Malik shared this information during a briefing to the National Assembly’s Standing Committee on Energy (Petroleum Division). He pointed out that the existing deal with Qatar features a 13.37 percent price slope, making it more expensive than other international contracts. “The Qatar agreement is costly; we aim to negotiate better terms next year,” Malik stated.

In addition to the Qatar agreement, Malik discussed Pakistan’s LNG deal with Azerbaijan, which operates on a take-and-pay basis. This arrangement offers flexibility, allowing Pakistan to procure cargoes as needed without being tied to strict commitments. Malik noted that Azerbaijan provides one cargo monthly, with the option to opt out of purchases if necessary.

Also read: Government to reduce LNG imports from Qatar

The minister also highlighted the urgent need for upgrades at Pakistan’s refineries to meet Euro-V standards and indicated that a biofuel policy would be presented to the cabinet within a month.

During the committee meeting, issues regarding gas shortages in Sindh were raised, with provincial representatives criticizing the diversion of surplus gas to other regions, which they argued violates constitutional provisions. Lawmakers from Sindh called for constitutional amendments if such practices persist.

Musadik Malik acknowledged the long-standing contentious nature of resource distribution in Pakistan. He insisted that the gas allocation process complies with the Constitution, although he conceded that Sindh is not receiving its fair share.

Syed Naveed Qamar from Sindh argued that the Constitution prioritizes gas supply to producing provinces, yet Sindh is facing shortages.

The Petroleum Secretary revealed that 80 percent of Sindh’s industry depends on local gas, in contrast to 20 percent in Punjab, while gas from Sindh is being supplied to Balochistan, which has high losses exceeding 50 percent.

Upon asked about the rationale for diverting gas to low-recovery areas, officials from the Sui Southern Gas Company (SSGC) said a high court ruling prohibits billing consumers in the province above a certain limit, a decision currently under legal challenge.

“We are complying with the court’s orders,” Malik noted, adding that the responsibility for losses in Balochistan should also rest with the provincial high court. The issue of gas theft in Balochistan was also addressed, with committee member Moin Amir Pirzada suggesting the establishment of a separate gas management company for the province.