Pakistan urgently negotiates LNG cargoes with Qatar as Strait of Hormuz disruptions threaten power supply, raising fears of summer outages, costly fuel alternatives and mounting pressure on the national grid.
Pakistan and Qatar are in advanced talks for the urgent supply of at least four liquefied natural gas cargoes that could pass through the Strait of Hormuz within days, as Islamabad scrambles to contain a worsening electricity shortfall ahead of peak summer demand.
Facing criticism over load shedding even before the onset of summer, Pakistan’s power division has already asked the petroleum division to arrange around 400 million cubic feet per day of LNG to sustain power generation, banking on the reopening of key international supply routes.
LNG imports had been halted early last month after the Strait of Hormuz was closed following US-Israel attacks on Iran. Tehran retaliated by targeting fuel installations in neighbouring countries, including Qatar, Saudi Arabia, the United Arab Emirates and Kuwait.
Qatar subsequently declared force majeure on all its global LNG contracts, including those with Pakistan.
Urgent call
Amid a growing electricity deficit, the power division issued an urgent call to stakeholders to secure LNG cargoes after indications emerged that Pakistani-flagged vessels might be able to cross the strategic Middle Eastern chokepoint.
Qatari LNG shipments had earlier been turned back from the Strait of Hormuz. While the precise number remains unclear, sources said at least 25 to 30 loaded cargoes from Qatar Petroleum are believed to be stranded between processing facilities and the strait.
Pakistan has approached Qatar at the highest level, requesting at least four of these cargoes for Islamabad and signalling readiness to deploy its renewed diplomatic capital if needed.
Technical teams from both sides are currently working to finalise arrangements. The push comes as Prime Minister Shehbaz Sharif and Chief of Defence Forces Field Marshal Asim Munir recently concluded a rapid tour of Middle Eastern countries as part of diplomatic efforts aimed at easing tensions between the United States and Iran.
A senior petroleum division official said uninterrupted operations of global fuel supply routes, especially through the Strait of Hormuz, are critical. The power division has sought more than 400mmcfd of LNG to meet demand across K-Electric service areas and distribution companies.
Officials warned that the electricity shortfall is expected to widen as temperatures climb, making it difficult to stabilise the national grid without major LNG-based power plants in Punjab, which together have a generation capacity of around 6,000 megawatts.
They added that reliance on high-speed diesel and furnace oil at current market rates would sharply increase generation costs. Even one or two cargoes from the spot market could still be viable within the overall energy mix.
“With the onset of the summer season, electricity demand has started to rise significantly across the country. In this regard, the availability of RLNG remains critical for ensuring optimal power generation and maintaining system stability,” the power division said in a communication to the petroleum division.
Reliance on HSD
The ministry cautioned that any shortfall in RLNG supply would force greater reliance on expensive alternatives such as high-speed diesel.
“This would not only result in a substantial increase in the overall cost of generation but would also lead to prolonged hours of load management, thereby increasing the fuel cost adjustment burden on end consumers,” it said.
All four large LNG-based plants run by the federal and Punjab governments, along with the medium-sized Nandipur plant, can switch to HSD as a backup fuel. However, the cost difference in power generation typically exceeds 25 rupees per unit and is expected to be even higher amid volatile oil prices.
These plants also play a key role in maintaining grid stability and enabling the evacuation of surplus electricity from southern regions.
To ensure smoother operations, the power division has shared a detailed weekly forecast of RLNG requirements, broken down by solar and non-solar hours along with average demand projections for the National Grid Company system.
“K-Electric has also conveyed its RLNG requirement for the KE system,” the power division said, formally asking the petroleum division to allocate Qatar-contracted cargoes in line with demand projections for both national and Karachi networks to support uninterrupted and cost-effective power supply.
Officials noted that HSD-based generation costs, which had already exceeded 45 rupees per unit before the US-Israel strikes on Iran, may now have risen beyond 80 rupees per unit.
At the same time, the use of HSD for electricity generation remains challenging due to its high cost and strong demand in transport and agriculture, particularly as the crop harvest nears completion.
Pakistan’s summer peak electricity demand typically exceeds 28,000 megawatts, compared with current peak levels of 19,000 to 20,000 megawatts and less than 9,000 megawatts during daytime hours, partly due to increased reliance on solar energy. While solar generation has reduced grid demand during daylight hours, many consumers switch back to the grid after sunset, adding further pressure to the system.
This post is republished from DAWN.
