Pakistan is in discussions for increased deliveries of liquefied natural gas (LNG) from Qatar, the latest effort by the South Asian nation to help ease a crippling fuel crunch, Bloomberg reported on Tuesday.
The government asked Qatar its biggest LNG supplier for several additional shipments every month starting as soon as this year, according to people with knowledge of the matter. Pakistan is requesting additional cargoes as part of its long-term contract, one of the people said.
Discussions are ongoing, and it isn’t clear if Qatar has the spare capacity to meet the request, said the people, who requested anonymity as the talks aren’t public. Qatar, one of the world’s top LNG exporters, is also being asked for more cargoes by European and Asian buyers amid a global supply shortage, and has repeatedly said it has little ability to boost deliveries in the short term. Pakistan’s petroleum minister Musadik Malik did not respond to a request for a comment.
The global energy crunch is the latest problem for Prime Minister Shehbaz Sharif’s administration, which came into power in April after a period of political upheaval. The nation’s energy import costs doubled in the 10 months ended April, while an ongoing fuel shortage is triggering rolling blackouts across the country. The move comes as hours-long power outages hit the country, with demand outstripping generation during the peak summer months.
Pakistan has experienced hours-long power cuts over the last month, with urban centres seeing four- to six-hour outages a day and rural areas over eight hours. There is currently a gap of 4,600 megawatts between supply and demand, with supply at 21,000 megawatts and demand at 25,600 megawatts. Soaring global fuel prices have also
increased pressure on the external account and the local currency has hit record lows against the dollar. Boosting deliveries from Qatar would not only alleviate Pakistan’s fuel supply deficit, it would also help insulate the country from the volatile and expensive spot market. State-owned Pakistan LNG didn’t award a spot market purchase tender last week after two suppliers were disqualified, which could further exacerbate its fuel shortage. Pakistan also aims to sign a new long-term liquefied natural gas purchase deal, and is considering an agreement with various countries.
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