ISLAMABAD: Pakistan is considering purchasing liquefied natural gas (LNG) from the spot market to manage supply disruptions caused by the conflict involving Iran, Petroleum Minister Ali Pervaiz Malik said on Wednesday. However, he stressed that Islamabad prefers government-to-government agreements to avoid paying elevated market prices.
The move comes after force majeure from Qatar disrupted contracted supplies, forcing Pakistan to either make expensive spot purchases or shift to alternative fuels ahead of peak summer demand. Spot LNG prices have surged to between $20 and $30 per mmBtu due to escalating tensions in the Middle East.
Meanwhile, officials said any procurement decision would depend on affordability for the domestic power sector. Pakistan is also exploring existing state-level arrangements, including cooperation with Azerbaijan’s SOCAR, to secure more stable and cost-effective supplies.
In addition, the country has rerouted some crude oil shipments through Saudi Arabia’s Red Sea port of Yanbu to bypass the Strait of Hormuz. Malik noted that insurance costs on this alternative route are comparatively lower.
Despite efforts to reduce reliance on LNG, Pakistan still depends heavily on imported fuels, particularly during high-demand periods. Authorities have also considered using furnace oil to curb load shedding, although this could increase electricity tariffs.
At the same time, domestic production is showing improvement. The Oil and Gas Development Company Limited reported that the Baragzai X-01 well in Khyber Pakhtunkhwa is producing around 15,000 barrels of oil per day and 45 million cubic feet of gas, with potential for further increases.
Nevertheless, Malik warned that prolonged supply disruptions could pose risks to industrial output and food security, underscoring the urgency of securing reliable energy sources.
