Pakistan to Seek Qatar’s Approval for Reselling LNG Amid Low Domestic Demand
- Pakistan plans to request Qatar’s permission to resell imported LNG on the spot market due to low domestic demand.
- The obligation under the 2016 long-term LNG supply contract has caused pipeline issues for Sui Northern Gas Pipeline Limited (SNGPL).
- The National Electric Power Regulatory Authority (Nepra) held a public hearing on fuel adjustments, revealing a 5% drop in electricity consumption and increased line pack pressure for gas utilities.
ISLAMABAD: In response to fluctuating domestic demand, the Pakistani government plans to request Qatar’s permission to resell liquefied natural gas (LNG) imported from Doha on the spot market. This development follows the long-term LNG supply contract established between Islamabad and Doha in 2016, with a price revision due in February 2026.
Domestic Challenges and Pipeline Issues
Pakistan State Oil (PSO) is currently bound by the agreement to take LNG supplies regardless of domestic consumption levels. This obligation has led to pipeline issues for Sui Northern Gas Pipeline Limited (SNGPL) when domestic utility companies fail to consume the gas.
Government’s Diplomatic Efforts
Senior officials from the Ministry of Energy revealed plans to approach Qatar through diplomatic channels, seeking either to cancel shipments or sell the surplus LNG on the spot market in case of low domestic demand.
Public Hearing on Fuel Adjustments
During a public hearing on Friday, the National Electric Power Regulatory Authority (Nepra) addressed a petition from power distribution companies requesting permission to collect an additional Rs3.41 per unit from consumers due to fuel adjustments for May 2024. The actual fuel rate stood at Rs9.12 per unit, compared to a reference price of Rs5.7 per unit.
Impact of Low Electricity Consumption
The hearing also highlighted a 5% drop in electricity consumption due to weather conditions, with total demand in May 2024 reaching only 17,000 megawatts. More electricity was produced using LNG rather than coal, with the cost of LNG-based electricity at Rs24.7 per unit. This unexpected drop in power-sector consumption has increased line pack pressure for gas utilities, risking the country’s gas transmission system.
Additional Issues Raised
Participants at the hearing also discussed the minimal share of net metering in the total energy mix, criticizing the Power Division’s efforts to discourage net metering. Concerns were raised about the National Electric Power Regulatory Authority’s (Nepra) role in providing consumer relief and the rising circular debt in the power sector. Questions were also posed about a coal scam at the Sahiwal coal power plant and cases lost by the Central Power Purchasing Agency (CPPA) in international courts.
CPPA’s Response
Representatives from the CPPA refused to address these additional queries, deeming them irrelevant to the public hearing. They requested intervenors to submit their questions in writing.
