Pakistan diverts 6 LNG shipments amid slumping demand, soaring prices

Pakistan has diverted six liquefied natural gas cargoes — one per month from July to December 2025 — due to declining industrial demand caused by slowing economic activity and higher gas prices.

According to a document obtained by Nukta from the Oil and Gas Regulatory Authority, Pakistan LNG Limited (PLL), a state-run LNG importer, confirmed the diversion of cargoes through December 2025 at the request of Sui Northern Gas Pipelines, another state-owned company. PLL has a 15-year contract to import one cargo per month.

The document stated: “It has been confirmed by PLL that it made arrangements with ENI to divert its cargoes outside Pakistan on request of Sui Northern Gas for the months of July 2025 to December 2025.”

In January 2025, Sui Northern Gas, the largest gas distributor with over 7.5 million consumers, asked PLL to defer 11 cargoes scheduled for 2025. So far, five cargoes — including one set for delivery next month — have been deferred.

PLL signed a 15-year agreement with ENI in 2017. Under the deal, cargoes were priced at 11.624% of Brent crude in the first two years, 11.95% in the third and fourth years, and 12.14% from the fifth year through 2032.

The document attributed reduced domestic and commercial gas consumption to higher prices, which have altered usage patterns. It noted that steep LNG tariffs, increased system gas prices, and levies on captive power consumers have pushed industrial users toward the national grid or alternative fuels.

Commercial sectors face challenges due to record-high gas prices of 3,900 Pakistani rupees per million British thermal units (mmBtu), leading to a 60% drop in business activity. Government data shows gas prices have surged in the past two years:

• Commercial consumers: 1,650 to 3,900 rupees/mmBtu
• General industries: 1,200 to 2,100 rupees/mmBtu
• Export-sector power plants: 1,100 to 3,500 rupees/mmBtu
• Cement companies: 1,100 to 4,400 rupees/mmBtu

A government official said Pakistan also deferred five cargoes under its Qatar LNG agreement for 2025, which will now arrive in 2026. The country has two Qatar LNG contracts: a 15-year deal priced at 13.37% of Brent and a 10-year deal at 10.2%.

Sui Northern Gas estimates gas sales for the fiscal year ending June 30, 2026, will total 281,999 billion BTU (BBTU), including 92,594 BBTU diverted to domestic consumers. This marks a 13% decline from the 325,217 BBTU projected for fiscal year 2025.

Analysts say industrial production is slowing, with economic growth likely to hit a low of 2.6% this fiscal year, down from earlier estimates of 3.5%. Slower production has also dampened electricity demand.

Data from the National Electric Power Regulatory Authority shows LNG-based power generation fell 4% to 17,847 gigawatt-hours (GWh) in the first 10 months of this fiscal year, down from 18,571 GWh a year earlier. LNG’s share in the energy mix dropped to 17.7% from 18.4%.

From January to May 2025, Pakistan State Oil imported 45 LNG cargoes, while PLL imported one. During the same period in 2024, PSO brought in 47 cargoes and PLL imported seven, government data showed.