Cabinet nods diversion of 45 LNG cargoes to tackle shrinking domestic demand
PSMU Desk
ISLAMABAD: The federal cabinet has approved the diversion of 45 liquefied natural gas (LNG) cargoes in response to declining domestic demand for gas. This move follows a decision by the Economic Coordination Committee (ECC), which had already endorsed the plan. The proposal was presented to the cabinet during a recent meeting, where it received formal approval.
According to sources, two key summaries were placed before the cabinet for approval: “Update on Negotiation with State of Qatar for Mitigation of Surplus LNG” and “Operation of Two SNGPL-Based Urea Manufacturing Plants (Fatima Fertiliser and Agritech).”
During the discussion, the Petroleum Division informed the cabinet that due to persistently low demand for gas in Pakistan, Pakistan State Oil (PSO) had accumulated surplus LNG stocks. After negotiations with Qatar, a mutually agreed solution was reached that would allow the sale of up to 24 LNG cargoes in 2026 on a net proceeds differential (NPD) basis. Additionally, an agreement was signed with energy giant Eni to sell 11 cargoes in 2026 and 10 cargoes in 2027, also on the NPD basis.
The cabinet thoroughly discussed the matter and approved the decision taken by the ECC to proceed with the LNG diversion.
Regarding the supply of gas to urea manufacturing plants connected to the Sui Northern Gas Pipelines Ltd (SNGPL) network, the cabinet addressed the ongoing long-term arrangements for gas provision to the fertiliser sector. It was noted that previous cabinet approval had allowed gas supply to two key fertiliser plants—Fatima Fertiliser and Agritech—until October 30, 2025. The ECC recommended extending this supply until December 31, 2025, as negotiations for long-term gas agreements continue.
After reviewing the details, the cabinet ratified the ECC’s decision on both the LNG diversion and gas supply to fertiliser plants, underscoring its commitment to managing the country’s energy resources efficiently amid shifting demand dynamics.
