ISLAMABAD: Pakistan has reached an agreement with Qatar to cancel 24 surplus Liquefied Natural Gas (LNG) cargoes for 2026, prompting the federal government to reopen previously closed local gas wells starting January next year. This decision comes as the country adjusts its energy supply in response to declining domestic gas demand and increased reliance on renewable energy.
The Ministry of Petroleum confirmed that the local gas fields, which were shut down to manage excess LNG shipments, will resume operations from January, contributing an estimated 200 million cubic feet per day (MMCFD) to the national grid. These wells were kept offline earlier to prevent potential pipeline damage caused by underused LNG supplies.
Initially, Pakistan had planned to import 120 LNG cargoes from Qatar and Italy’s Eni in 2026. However, after renegotiations, the country will now import only 85 cargoes, with 24 canceled by Pakistan LNG and 11 by Eni, generating projected savings of around Rs20.1 billion. This move is expected to ease the financial pressure on the Sui gas companies, which currently face obligations totaling Rs850 billion.
The country’s gas sector is grappling with a circular debt of Rs3.1 trillion, including Rs1.7 trillion in principal and Rs1.4 trillion in interest. Officials have drafted a six-year plan to manage this debt, including proposals for a Rs5 petroleum levy, interest relief, and debt restructuring options, which will be submitted to the federal cabinet for approval.
Pakistan’s reduced LNG imports reflect declining gas consumption by power plants, which are increasingly using solar and hydropower, and by industrial facilities generating their own electricity. The surplus LNG has forced authorities to sell gas at discounts, limit domestic production, and explore options such as offshore storage or resale of excess shipments.
The country’s long-term LNG agreements with Qatar and Eni cover roughly 120 cargoes annually, averaging nine per month. Pakistan had already reached a similar agreement with Eni in November 2025 to cancel 21 LNG cargoes under a long-term contract. The latest negotiations with Qatar allow for greater flexibility in managing the energy supply while avoiding unnecessary costs.
With these adjustments, Pakistan aims to stabilize its gas sector finances, ensure consistent domestic supply, and make the energy mix more sustainable. The reopening of local gas wells alongside canceled LNG cargoes is expected to optimize resource utilization while reducing financial strain on the gas companies.
The first shipments of local gas are scheduled to flow in January 2026, marking a significant step in Pakistan’s effort to balance imported LNG with domestic production, safeguard pipeline infrastructure, and improve energy sector efficiency.
