Pakistan announced plans to renegotiate its liquefied natural gas (LNG) supply agreement with Qatar, Reuetrs reports.
The country's Petroleum Minister cited the need for better terms in light of Pakistan's current economic crisis, which has led to reduced power consumption. The nation, which relies on natural gas for over a third of its electricity, faces the challenge of excess capacity and the associated costs due to long-standing contracts with independent power producers.
According to The News newspaper, Petroleum Minister Musadik Malik, while addressing a parliamentary committee on energy, stated that the existing contract with Qatar is expensive. "The Qatar agreement is costly, and we will negotiate better terms next year," Malik affirmed. This statement reflects the government's intention to alleviate financial pressure by seeking more favorable conditions in its energy agreements.
In December, Malik had announced that Pakistan was deferring an agreement to purchase LNG from Qatar by one year, moving the delivery of the contracted cargoes from 2025 to 2026. This decision was made as the country found itself with a surplus of LNG. The minister noted that the postponement of the deal did not incur any financial penalties.
Additionally, Pakistan had already deferred five LNG cargoes from Qatar and was in talks to defer five more from other suppliers, though the names of these sellers were not disclosed.
The move to renegotiate is part of Pakistan's broader strategy to manage its energy resources more effectively during an economic downturn that has significantly impacted its power sector. The government is attempting to navigate the financial obligations of its energy contracts while facing a reduction in demand for electricity.
The petroleum ministry has yet to respond to requests for comment on the renegotiation plans. As Pakistan enters discussions with Qatar, the outcome of these negotiations could have important implications for the country's financial and energy sectors.
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