Pakistan plans to renegotiate its long-term liquefied natural gas (LNG) supply deal with Qatar as it seeks to reduce its energy costs in response to growing demand, according to Petroleum Minister Musadik Malik. Speaking before a parliamentary energy committee on Friday, Malik confirmed that the country aims to secure more favorable terms in the coming year.
“The Qatar agreement is costly, and we will negotiate better terms next year,” he told the committee. The existing LNG deal with Qatar is notably more expensive compared to other international agreements, Malik explained.
Natural gas plays a crucial role in Pakistan’s energy sector, accounting for about a third of its power generation. However, the country has been grappling with an ongoing economic crisis that began in 2022. This has led to a reduction in power consumption, though the government continues to bear the financial burden of excess power capacity under long-term contracts with independent power producers.
Amid the economic turmoil, Pakistan has sought financial assistance from international bodies such as the International Monetary Fund (IMF) and the World Bank, as well as from Gulf nations like Saudi Arabia and the UAE. Additionally, the country has faced the repercussions of high global energy prices during 2022 and 2023, which pushed Pakistan out of the international spot LNG market.
The current 10-year LNG contract with Qatar includes provisions that allow either party to review or terminate the agreement after a decade. In 2024, Pakistan opted to defer LNG cargoes from Qatar, shifting delivery from 2025 to 2026, a move that Malik confirmed would not incur any financial penalties.
“We currently have a surplus of LNG, so we are not importing any new cargo,” Malik said in December, reflecting the country’s current energy situation.
As Pakistan continues to navigate its financial challenges, renegotiating the LNG deal with Qatar is part of broader efforts to reduce the economic strain while securing a more sustainable energy future.