Pakistan's energy structure transformation forces LNG supply chain restructuring

Facing the shrinking natural gas consumption market, the Pakistani government is accelerating the adjustment of liquefied natural gas (LNG) import strategy. The latest data show that the daily processing capacity of the country's natural gas transmission and distribution system fluctuates sharply between 4.9 and 5 billion cubic feet, forcing the authorities to urgently transfer the entire LNG cargo originally scheduled to arrive at the port next month to the international market. This is the third large-scale supply adjustment adopted by Pakistan after the two-ship cargo transfer of the Italian National Electric Power Company (ENI).

energy market analysts pointed out that structural changes on the demand side are the core motivation for this strategic adjustment. Over the past six months, Pakistan's daily consumption of natural gas has continued to shrink at a rate of 1.5-0.2 billion cubic feet per month. Even during the summer peak period, the utilization rate of LNG power plants is still less than 65% of the design value. Economic accounting shows that the cost of RLNG power generation based on Brent oil price of 12.14 per cent is as high as Rs 26-27 per unit, making it completely lose its price advantage in competition with coal and hydropower.

supply chain restructuring lies in long-term contractual obligations. Although Qatar rejected five requests for delivery extensions, it agreed to extend the relevant cargo rights until 2026. Under the framework agreement with ENI, Pakistan is conducting intensive negotiations on eight shipments between May and December 2025 in an attempt to mitigate the risk of excess through the transfer of cargo rights or price adjustment mechanism. It is worth noting that the state-owned Pakistan Liquefied Natural Gas Company (PLL) has maintained a cautious silence on this, only confirming the existence of "technical negotiations" but not disclosing the specific terms.

system have shown multi-dimensional characteristics. The gas pipeline operator SNGPL alerted the Federal Department of Energy as early as January, recommending that 11 ships of undelivered goods be resold to the international market. The latest load forecast of the National Power Dispatching Center (NPCC) shows that even if it enters the traditional peak season, the demand for natural gas power generation will still hover at a low level. This mismatch between supply and demand forces Pakistan to explore a new import model of "pre-quarantine + third-party treatment" in order to avoid overloading the domestic storage and transportation system while fulfilling its international contractual obligations.

Industry insiders believe that the LNG supply chain restructuring not only reflects the profound changes in Pakistan's energy consumption structure, but also indicates that the global energy market is undergoing a demand-side driven rebalancing process. For emerging economies that rely too much on long-term contracts, the establishment of more flexible procurement mechanisms has become a top priority to ensure energy security.