Full Breakdown
Pakistan to Sell Excess LNG Amid Supply Glut
12/7/2025, 8:53:21 PM
Introduction of LNG Sales Strategy
Petroleum Minister Ali Pervaiz Malik announced that Pakistan will begin selling excess liquefied natural gas (LNG) in international markets starting January 1. This decision follows a gas supply glut that has led to significant financial losses for domestic producers. Malik highlighted that reduced usage of imported gas for power generation has resulted in an excess supply, compelling the government to divert gas to domestic consumers, which has exacerbated the circular debt in the gas sector. He noted that this situation has caused a loss of approximately Rs1,000 billion since 2018-19.
Background on Gas Imports and Financial Implications
Pakistan has been importing LNG from Qatar and the Italian energy company Eni. The minister's remarks come after reports indicated that Pakistan had canceled 21 LNG cargoes under its long-term contract with Eni to manage excess imports. Malik emphasized that selling the surplus LNG would alleviate financial burdens and allow state-owned enterprises in the sector to operate at full capacity, thus generating profits.
Foreign Investment in the Energy Sector
During the press conference, Malik also discussed anticipated foreign investments in Pakistan's petroleum sector. He mentioned that Turkish Petroleum, in collaboration with local companies, would engage in onshore and offshore exploration activities after a two-decade hiatus. The Turkish company is set to establish an office in Islamabad, employing 10 to 15 Turkish nationals. Furthermore, a delegation from the State Oil Company of Azerbaijan Republic (SOCAR) is expected to visit Pakistan to explore collaboration opportunities in oil and gas exploration, with SOCAR also planning to open an office in the country.
Infrastructure Developments and Future Projects
Malik revealed plans for significant infrastructure investments, including a multi-million dollar oil pipeline project from Machike to Thalian, in collaboration with Pakistan State Oil (PSO) and Frontier Works Organisation (FWO). Construction of the pipeline is slated to commence within the next month and a half. Additionally, he announced that private fundraising efforts for the Reko Diq project have been finalized, with local companies and Canadian mining giant Barrick Gold set to invest over $3.5 billion. The total investment for the first phase of the Reko Diq project is projected to reach between $6 billion and $7 billion, with a signing ceremony anticipated in the coming months.
Criticism & Opposition
While the government's strategy aims to mitigate financial losses and attract foreign investment, critics may raise concerns regarding the long-term sustainability of relying on LNG imports and the environmental implications of increased fossil fuel extraction and infrastructure development.
Official Statements & Responses
Malik stated, “From January 1, we will sell this excess fuel in international markets and reduce our burden while limiting the loss caused by it.” He also noted the importance of foreign investment, stating, “We are moving towards decreasing our reliance on imported oil and gas.”
What's Next
As Pakistan prepares to implement its LNG sales strategy and initiate infrastructure projects, the government is expected to finalize agreements with foreign investors and continue discussions with Qatar regarding gas supplies. The upcoming months will be critical in determining the success of these initiatives and their impact on Pakistan's energy landscape.
