Pakistan weighs spot LNG imports to tackle power supply crunch

Pakistan may consider spot LNG purchases as the country faces a daily electricity shortfall of about 4,000 megawatts, with around 3,000 MW attributed to the closure of regasified LNG-powered electricity units following a Qatari force majeure, Power Minister Awais Ahmad Khan Leghari said during a televised address April 16.

LNG flows into the country have been hampered by developments in the Middle East, he said.

While purchasing spot LNG cargoes remains an option, he cautioned that this could lead to higher prices.

According to Leghari, contractual cargoes were available at about $16/million British thermal units. However, spot purchases could cost as much as $22-$25/MMBtu, potentially burdening consumers.

Platts, part of S&P Global Energy, assessed the JKM -- the benchmark price for cargo delivered to Northeast Asia -- for June at $16.196/MMBtu, up 26.7 cents/MMBtu from the previous session.

Industry analysts said Pakistan may experience persistent electricity shortages in the coming months due to restricted LNG shipments and reduced hydrogeneration amid limited water resources, particularly as it enters the summer season.

The government is also rationing electricity generated from fuel oil-fired power plants due to higher costs, the analysts said.

The country's LNG imports fell to $70 million in March from $226 million in March 2025, according to data released April 16 by the Pakistan Bureau of Statistics, a state-run entity that compiles trade data. In February, the South Asian nation's LNG imports totaled $189 million, according to the data.

"Spot LNG purchases can serve as a short-term lifeline to bridge the current supply crisis, but they come at a steep price for Pakistan's fragile economy," said Mohammad Waqas Ghani, head of research at JS Global, a Karachi-based brokerage firm, on April 16.

"It is still a better option than switching to fuel oil in the short term, as fuel oil would carry higher generation costs," Ghani said.

For long-term energy security and price stability, well-negotiated long-term contracts remain the "smarter and more affordable strategy" for the country, he said.

Although power generation in the country is stable and sufficient to meet demand, rising consumption during peak hours continues to pose a challenge, according to a statement issued by the spokesperson for Pakistan's power division on April 14.

As a result, the division has decided to implement countrywide load management during peak hours, the spokesperson said, noting that this curtailment -- lasting about 2.25 hours daily -- aims to minimize the use of costly fuels and prevent an increase in electricity tariffs.

In March, Pakistan was generating about 5,000 MW of electricity from three regasified LNG-fueled plants; however, operations were disrupted after QatarEnergy declared force majeure, according to Ministry of Energy officials.

The spokesperson said that, following Prime Minister Shahbaz Sharif's directive, arrangements have been made to supply 80 million cubic feet/day of gas to power generation companies in order to produce electricity and help curb price increases.

Abdul Azeem, head of research at Al Habib Capital Markets, a Karachi-based securities firm, said that with the onset of summer, electricity demand is expected to rise, with peak consumption anticipated to reach about 24,000 MW.

"To reduce load shedding, the government can manage demand by limiting electricity use during peak hours, for example, by closing commercial markets earlier. This can help ease pressure on the system and conserve fuel," Azeem said.

War curtails supplies

Last month, officials from Pakistan's Ministry of Petroleum informed members of the Senate's upper house that, in March, only two out of eight scheduled LNG cargoes arrived on time, as shipments from the region were disrupted by the war in the Middle East.

They said the arrival of six cargoes scheduled for April remains uncertain.

Pakistan typically imports about 9-10 LNG cargoes each month from Qatar under long-term LNG purchase contracts.

LNG imports in the nine months ended March 31 fell to $1.884 billion from $2.682 billion during the same period a year earlier, data from the Pakistan Bureau of Statistics showed April 16.

The effective closure of the Strait of Hormuz and disruptions to QatarEnergy's LNG exports have significantly altered Pakistan's gas balance, transforming a once-oversupplied market into one now supply-constrained, analysts at S&P Global CERA said in a report March 31.

"With LNG imports primarily consisting of Qatari volumes, the disruption eliminates a crucial source of supply and will set off demand curtailment and fuel switching across the power and industrial sectors," CERA analysts said.

Pakistan's overall gas consumption is expected to remain unchanged, but LNG demand is forecast to exceed 10 million metric tons/year by 2030 and reach 18.4 million mt/y by 2050 as domestic gas production declines, according to the analysts.

CERA analysts highlighted potential downside risks to the long-term forecast, such as payment defaults, uncertain demand growth and slow infrastructure development.