Pakistan and Qatar have agreed to review their long-term liquefied natural gas (LNG) supply agreements as Islamabad seeks greater flexibility amid a growing gas surplus. The development follows ongoing discussions between Pakistan State Oil (PSO) and QatarEnergy regarding the pricing and future structure of the contracts.
According to officials, both sides have formally served price review notices under existing agreements that run until 2031. The contracts, signed under government-to-government arrangements, cover the annual supply of 6.75 million tonnes of LNG to Pakistan.
Price Review Process Begins
The review process started after contractual clauses allowed both parties to reassess pricing formulas once specific milestones were reached. Consequently, PSO and QatarEnergy initiated negotiations to determine whether current prices continue to reflect prevailing market conditions.
Officials said the talks could lead to revised pricing for the remaining duration of the agreements. However, if negotiations fail to produce a consensus within the stipulated period, the contracts provide mechanisms that may allow further action, including termination under certain conditions.
Pakistan has faced a surplus of LNG supplies in recent years due to lower-than-expected demand from the power sector. As a result, the government previously authorized negotiations with QatarEnergy to reduce cargo deliveries and ease pressure on the domestic gas system.
Surplus Supply Drives Negotiations
The country has already arranged the diversion of 24 LNG cargoes during the current year to manage excess supplies more effectively. Officials believe the review offers an opportunity to align contract terms with changing energy requirements and market realities.
Energy experts say the outcome of the negotiations could influence Pakistan’s long-term energy planning while maintaining cooperation with one of its most important LNG suppliers.
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