Pakistan weighs costly LNG amid outages

LNG tanker at import terminal illustrating costly emergency gas purchases and energy strain in Pakistan

Key Points

01Pakistan seeks emergency LNG cargo for early September 2026
02Power outages linked to missing LNG and idle 5,000 MW capacity
03Spot LNG cargo costs have jumped to about USD 75 million
04Higher LNG prices risk pressure on tariffs and external accounts

Emergency LNG tender to tackle fuel shortfalls

State-owned Pakistan LNG Limited has floated a spot tender for 140,000 cubic metres of liquefied natural gas, with a tolerance of plus or minus 5%. The cargo is sought for delivery at Port Qasim between September 4 and September 8, 2026, and is described as an emergency measure to address acute gas shortages.

The tender is intended to quickly add regasified LNG supplies into the system to support power generation. The specified volume and narrow delivery window underline the urgency of securing additional fuel as the country grapples with electricity shortfalls.

Power outages tied to LNG supply disruptions

Federal authorities have publicly apologised for prolonged night-time load-shedding affecting consumers. They have linked the outages in part to the non-availability of contracted LNG supplies from Qatar, which has reduced fuel available for gas-fired power plants.

Officials state that regasified LNG shortages have left plants with about 5,000 megawatts of capacity unable to operate. This lost capacity has constrained overall generation at a time of strong electricity demand, contributing to extended power cuts.

Surging spot LNG prices complicate purchases

Petroleum Ministry officials report a sharp increase in international spot LNG prices. A single cargo that would typically cost around USD 30–35 million is now priced near USD 75 million on the spot market, more than doubling the outlay for each shipment.

The higher cargo cost has triggered concern over the impact on Pakistan’s external accounts, as larger hard-currency payments are needed for the same volume of fuel. It also raises questions about affordability for the power sector and consumers.

Balancing supply security and consumer costs

Authorities are weighing how to respond to the fuel shortfall while limiting economic strain. Securing spot cargoes at current prices would bolster generation capacity but could significantly increase the cost of producing electricity.

Officials have signalled concern that passing higher LNG import costs through to retail tariffs could push up consumer electricity bills. At the same time, failure to source additional fuel risks ongoing outages, leaving policymakers to balance supply security against fiscal and consumer pressures.

Key Takeaways

01Pakistan’s emergency LNG tender highlights how fuel supply gaps are directly translating into electricity shortages and idle generation capacity.
02The loss of about 5,000 MW of gas-fired output underscores the power system’s dependence on imported LNG and contracted long-term supply reliability.
03A more than twofold jump in spot LNG cargo costs is turning short-term purchases into a potential strain on both the current account and end-user tariffs.

References