Pakistan turns to spot LNG buying as Qatar supply disruption triggers energy crisis

Pakistan has re-entered the spot LNG market after nearly three years, as disruptions in long-term supply from Qatar have led to a severe energy crunch and widespread power outages across the country.

For years, Pakistan depended heavily on contracted LNG shipments from Qatar. However, ongoing conflict in the Middle East has forced a shutdown of Qatari LNG production and exports, disrupting these steady supplies.

The situation has been worsened by restrictions around the Strait of Hormuz, which have effectively blocked a significant portion of global LNG movement. At the same time, attacks on regional energy infrastructure have caused damage to Qatar’s key LNG facility at Ras Laffan, further tightening supply.

QatarEnergy has indicated that the financial impact of the disruption at the Ras Laffan complex could reach around $20 billion annually, with full restoration potentially taking several years. The company has also declared force majeure on certain long-term LNG contracts, affecting committed deliveries.

As a result, global gas markets have reacted sharply, with prices in Asia and Europe climbing to multi-year highs. Despite these elevated costs, Pakistan has been forced to seek cargoes from the spot market due to worsening domestic shortages.

In response to the crisis, Pakistan LNG Ltd has issued a tender to purchase three LNG cargoes for delivery between late April and mid-May. Suppliers have been invited to submit their offers by April 24.

Compounding the issue, several LNG vessels that were loaded in Qatar before the escalation of tensions—and were destined for Pakistan—remain stranded in the Gulf, unable to transit through the Strait of Hormuz. This has further strained supply and intensified the country’s ongoing energy challenges.

Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.