KARACHI: Pakistan has struck a deal to cancel 21 liquefied natural gas cargoes under its long-term contract with Italy’s Eni as part of a plan to curb excess imports that have flooded its gas network, according to an official document and two sources.
The document from state-owned Pakistan LNG Ltd. (PLL) to the country’s Ministry of Energy dated October 22 said 11 cargoes planned for 2026 and 10 for 2027 would be canceled at the request of gas distributor SNGPL.
Only the planned January shipment in both years, and the December shipment in 2027, would be retained to meet peak winter demand, according to the document, reviewed by Reuters.
Two sources familiar with the matter in Pakistan said that Eni had agreed to the move under the contract’s flexibility provisions. LNG is in strong demand globally, and suppliers typically stand to earn more by selling cargoes in the spot market than under long-term contracts.
Eni declined to comment. PLL, SNGPL, and Pakistan’s petroleum ministry did not reply to requests for comment.
RENEGOTIATING SUPPLIES FROM QATAR
PLL’s move marks one of Pakistan’s most significant steps yet to rein in LNG purchases as rising renewable generation and lower industrial demand leave it with surplus imported gas.
Eni signed a long-term LNG supply deal with PLL in 2017, committing to deliver one cargo per month until 2032, with the option to divert shipments to other destinations.
The first source, and a third, said that Pakistan was also in talks with Qatar about gas supplies from the Gulf state, with options including deferring some cargoes or reselling them under existing contract clauses. Last week a technical team visited Karachi to schedule the cargoes. The talks are ongoing and no decision has been reached, the first and third sources said.
QatarEnergy did not immediately respond to a request for comment.
TOO MUCH GAS, TOO LITTLE DEMAND
Pakistan’s long-term LNG supply deals with Qatar and Eni together cover around 120 cargoes a year, including on average nine a month from two Qatari contracts and one from Eni.
But Pakistan’s LNG imports have fallen sharply this year as demand from power producers dropped amid higher solar and hydropower output.
Lower gas use by power plants and industrial units generating their own electricity have added to the surplus, leaving the system significantly oversupplied for the first time in years.
The glut has forced Pakistan to sell gas at steep discounts, curb local production, and consider offshore storage or reselling excess cargoes, according to government presentations reviewed by Reuters.
Eni’s last delivered cargo to Pakistan was received at the GasPort terminal on January 3, according to Kpler data. The first source, and a fourth one, said Pakistan had also agreed a deal with Eni not to receive any further cargoes in 2025.
Eni shipped out 12 cargoes to Pakistan in 2024.
