France is set to re-enter Pakistan’s Liquefied Natural Gas (LNG) market after more than a decade, following earlier legal disputes that led to the withdrawal of French company ENGIE (formerly GDF-Suez).
The engagement ceased after a contract awarded by the Pakistan Peoples’ Party (PPP) government in 2010 faced legal scrutiny, leading to the project’s cancellation.
The return of French interest in Pakistan’s LNG sector coincides with the depletion of Pakistan’s indigenous gas reserves, which are declining by 6% annually against a backdrop of increasing demand.
This scenario has opened up opportunities for French firms to contribute to averting a potential gas crisis in Pakistan.
Historically, the PPP government had granted a 3.5 million tonne LNG import project to GDF-Suez on February 9, 2010.
Allegations of financial losses tied to the deal prompted a Supreme Court intervention, which eventually found no fiscal discrepancies but led to the cancellation of the project due to internal disputes.
The Pakistan Muslim League-Nawaz (PML-N) administration, succeeding the PPP, successfully initiated LNG imports through a 2015 agreement with Qatar, marking a shift in Pakistan’s energy import strategy.
However, recent challenges in securing LNG through spot purchases have highlighted the need for diversified LNG sourcing strategies.
In recent developments, Dr. Musadiq Masood Malik, Pakistan’s Minister of Energy, met with French Deputy Head of Mission, Guillaume Dabouis, to discuss potential collaborations in the energy sector, including LNG provision, energy resource exploration, and enhancing the energy infrastructure.
The discussions also covered initiatives aimed at reducing line losses and bolstering the energy sector.
The Pakistani government has expressed a commitment to a comprehensive approach to its energy challenges, with plans to present a robust strategy to the International Monetary Fund (IMF) that aligns with national interests.
This approach is part of a broader economic reform agenda focusing on various sectors, including energy, finance, and IT, with an emphasis on integrating modern technologies in agriculture to drive transformation and growth.
The renewed dialogue between France and Pakistan suggests a strengthening partnership, with potential benefits for Pakistan’s energy landscape and broader economic prospects.
