The government will contact Qatar to request authorization to resell liquefied natural gas (LNG) supplied from Doha in the spot market if local demand is low, according to a senior official from the Ministry of Energy.
The discovery comes in light of the long-term LNG supply arrangement inked between Islamabad and Doha in 2016. The contract stipulates that the price modification is due in February 2026.
Under the agreement, Pakistan State Oil (PSO) is required to take supply regardless of local demand, which might cause pipeline problems for Sui Northern Gas Pipeline Limited (SNGPL) if the utility fails to utilize the gas.
Officials have stated that Pakistan is planning to approach Qatar through diplomatic channels in order to either cancel or sell LNG shipments on the spot market if local demand falls short.
The statement was made during a public hearing conducted on Friday by the National Electric electricity Regulatory Authority (Nepra) on a petition filed by electricity distribution firms requesting authorization to collect an extra Rs3.41 per unit from consumers owing to fuel changes in May 2024.
During the hearing, electricity distribution firms stated that the real fuel pricing was Rs9.12 per unit, as opposed to a reference price of Rs5.7 per unit, resulting in a rise of Rs3.41 per unit.
They also projected a 5% decrease in power use owing to weather, with total demand in May 2024 at only 17,000 megawatts. More power was generated using LNG rather than coal, with the cost of LNG-based electricity being Rs24.7 per unit.
The authorities elaborated on the need of forecasting LNG demand months in advance, pointing out that unanticipated declines in power-sector usage might result in greater line pack for gas utilities.
Their concern stems from rising line pack pressure in May, which placed the country’s gas transmission at danger when it reached critical levels due to the power sector’s reduced use of Re-Gasified Liquefied Natural Gas (RLNG).
Additionally, the hearing indicated that net metering accounted for less than 1% of the entire energy mix.
The intervenors accused the Power Division of employing propaganda to discourage net metering by emphasizing its small proportion, claiming that net metering customers consumed more power from the national grid at night, implying that criticism of net metering was unfounded.
