Pakistan LNG Shipments From Qatar Expected This Month Amid Energy Crisis

The South Asian nation has been grappling with severe energy shortages, including rolling blackouts that can last up to 24 hours in some areas, after Qatar declared force majeure on its LNG exports. This declaration followed damage to Qatar's Ras Laffan LNG hub, reportedly due to Iranian strikes. Consequently, Pakistan has been compelled to seek LNG from the more expensive spot markets, often paying substantial premiums.

Previously, Qatar was Pakistan's largest LNG supplier under long-term contracts. Over the past three months, Pakistan has issued multiple tenders for prompt LNG deliveries, consistently offering prices around $20 per million British thermal units (MMBtu) or higher. A tender earlier this month failed to secure an order after only one bid was received at $26.969 per MMBtu, a price considered too high by Pakistani officials, especially compared to pre-war prices. A senior Pakistan LNG Limited executive noted that the international LNG price was around $23.18 per MMBtu.

Following the failed tender, Pakistan LNG issued a new one. The arrival of Qatari cargoes is expected to alleviate the energy crisis, which has driven up power generation costs by 38% year-on-year as of July. These costs have likely continued to climb as spot LNG prices have trended upward, exacerbated by QatarEnergy's extension of its force majeure.