Pakistan Reduces Monthly Qatar LNG Imports Due to Lower Demand


Qatar has reduced its LNG supply to three cargoes or 40% from five in a month, which has eased the pressure on Pakistan as the country was unable to consume the LNG due to low demand amid the lockdown, reported a local media outlet. 

The agreement has been reached without declaring force majeure on shipments.

According to a senior official at the Petroleum Division, ‘

This will also provide relief to the government per month as the LNG import from Qatar is at higher side which is locked for 15 years at 13.37 percent of the Brent.

He further told the media that after this there will be a reduction in financial losses as the government will now not buy five LNG vessels from Qatar and purchase only three in a month. Pakistan is bound to import five cargoes in a month for 15 years. In addition, Pakistan buys LNG from Gunvor and ENI under three to five-year tenders.

Coronavirus has resulted in reduced gas demand in Pakistan. The government was not able to absorb the 100 percent contracted supply of LNG from Qatar keeping in view the drastic dip in RLNG use in the country on account of low economic activities on account of a countrywide lockdown.

The report noted that the LNG transmission system was also on the verge of collapse as the line pack had reached 5.2 billion cubic feet.

The countrywide lockdown has massively slowed down all industrial activities consuming just 146 MMCFD LNG and more importantly, the CNG sector is just consuming 20 MMCFD of RLNG because of a massive dip in road traffic as far as the local industry is concerned.

Against the import of LNG of 810 MMCFD, the consumption on Sunday slightly increased to 490 MMCFD as the power sector has increased LNG consumption to 300 MMCFD.

He further said that as regards to line pack, all efforts are being made to enhance off-take by Power Division which was around 100-150 MMCFD and has now increased to more than 300 MMCFD as of Sunday. The SNGPL is trying its best to manage the system load which is under stress due to closure of industrial and commercial activities and lockdown of cities.

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