Pakistan’s Energy Crisis Set to Ease as Qatari LNG Breaks Through Hormuz

Pakistan is set to receive a much-needed energy boost as Qatari liquefied natural gas (LNG) shipments are expected to arrive in the country this month. According to Bloomberg, the first consignment could arrive as early as Thursday, based on ship-tracking data. Prior to this, Pakistan has been grappling with power outages due to a shortage of gas, with rolling blackouts lasting up to 24 hours in some regions.

The situation escalated after Qatar declared force majeure on its exports following Iranian strikes that damaged its Ras Laffan LNG hub. As a result, Pakistan has been relying on spot LNG markets, paying exorbitant prices for the occasional shipment. Qatar has traditionally been the largest supplier of liquefied natural gas to Pakistan, under longstanding contracts.

In recent months, Pakistan has issued multiple tenders for prompt gas deliveries, often paying $20 or more per million British thermal units (MMBtu) for the gas. However, these prices have been significantly higher than pre-war LNG prices paid by Pakistan. The international LNG price currently stands at around $23.18 per MMBtu, while the bids received from Pakistan have been as high as $26.969 per MMBtu.

Consequently, a fresh tender has been issued. The anticipated Qatari LNG deliveries should help alleviate the energy crisis in Pakistan, where power generation costs have skyrocketed due to the gas shortage and frequent blackouts.