Here’s a shocking reality: Pakistan is drowning in natural gas, and it’s forcing the country to make some drastic moves. But here’s where it gets controversial—instead of celebrating this surplus, Pakistan is canceling deals and renegotiating contracts, leaving many to wonder if this is a smart move or a missed opportunity. In a bold step, Pakistan has decided to cancel 21 liquefied natural gas (LNG) cargoes from Italy’s Eni, as revealed by an official document and insider sources. This decision, part of a broader strategy to tackle excess imports, highlights a growing imbalance between supply and demand in the country’s gas network.
The document, dated October 22 and sent by state-owned Pakistan LNG (PLL) to the Ministry of Energy, details the cancellation of 11 cargoes scheduled for 2026 and 10 for 2027, at the request of gas distributor SNGPL. Only the January shipments in both years and the December 2027 shipment will be retained to meet peak winter demand. And this is the part most people miss—while LNG is in high demand globally, Pakistan’s surplus has forced it to rethink its long-term contracts, even as suppliers like Eni could potentially earn more by selling to the spot market.
Eni has reportedly agreed to the cancellation under the contract’s flexibility provisions, though the company declined to comment. PLL, SNGPL, and Pakistan’s petroleum ministry have also remained silent on the matter. Meanwhile, Pakistan is in talks with Qatar to renegotiate its gas supplies, exploring options like deferring or reselling cargoes under existing contract clauses. A technical team recently visited Karachi to discuss scheduling, but no final decision has been made.
So, what’s causing this oversupply? Pakistan’s long-term LNG deals with Qatar and Eni total around 120 cargoes annually, but domestic demand has plummeted due to increased renewable energy generation and lower industrial consumption. Power plants and industries are using less gas, leaving the system oversupplied for the first time in years. This glut has forced Pakistan to sell gas at discounted rates, curb local production, and even consider offshore storage or reselling excess cargoes.
Here’s the kicker: While Pakistan’s move to cancel cargoes might seem pragmatic, it raises questions about the country’s energy strategy. Is relying heavily on long-term contracts in a rapidly changing energy landscape still viable? Or should Pakistan focus more on flexible, short-term deals to adapt to shifting demand? Eni’s last cargo delivery to Pakistan was in January, and the country has agreed not to receive any further shipments in 2025. With 12 cargoes delivered in 2024, the shift is already underway.
This situation isn’t just about numbers—it’s about the future of Pakistan’s energy security. As renewable energy gains traction, how should countries balance traditional gas imports with emerging alternatives? What do you think? Is Pakistan making the right call, or is this a missed opportunity to capitalize on its surplus? Let’s spark a debate in the comments—your insights could shape the conversation!
