Pakistan’s liquefied natural gas (LNG) deal with Qatar has a provision that allows either country to renegotiate the agreement in 2026. However, no decision has been made yet on whether to pursue this renegotiation, as Petroleum Minister Musadik Malik shared with Reuters.
Malik provided clarification after his comments about the deal were mentioned in the media. He had said the Qatar LNG deal was costly and that Pakistan would try to negotiate better terms next year. Malik explained that he was discussing the details of Pakistan’s LNG contracts, noting that renegotiation could happen after ten years of the Qatar LNG deal. The government now has an entire year to explore its options before making a final decision.
Pakistan’s largest LNG contract was signed in 2016 with Qatar’s Qatargas-2, one of the world’s biggest LNG producers. The deal is for up to 3.75 million tons of LNG annually over 15 years. However, if the parties fail to agree on a new price, the agreement can be canceled and shortened to 11 years.
Due to an ongoing economic crisis, Pakistan’s energy demand has decreased, which has led to excess energy capacity. The country still has to pay for power it no longer uses due to long term contracts with independent power producers.
In December, Malik mentioned that Pakistan had postponed receiving five LNG shipments from Qatar, originally scheduled for 2025, to 2026, without facing any penalties.
