Pakistan’s economy has sustained a loss of $194 million (Rs53.374 billion) over the past four months due to a reduction in local gas production by 329 mmcfd, equating to a monthly adverse impact of $48 million (Rs13.344 billion). The value of curtailed local gas, when matched with RLNG costs, stands at $500 million (Rs139 billion).
According to a news report, the curtailment has also caused crude oil production losses amounting to Rs5 billion and cost the national exchequer Rs20 billion in lost tax revenue. These figures, disclosed in the latest data, highlight the decision to close local oil and gas wells to justify importing spot LNG cargo.
Despite earlier considerations to import LNG at $15 per MMBTU, a ministerial meeting chaired by Deputy Prime Minister Ishaq Dar on December 16, 2024, decided against purchasing spot LNG for January. Members of the National Assembly criticized the government for prioritizing costly LNG imports over utilizing cheaper local gas.
Energy companies, including MOL Group, OGDCL, and Pakistan Petroleum Limited (PPL), have expressed frustration over the forced gas curtailments. MOL Group reported curtailments of 110 mmcfd in the Tal Block, warning of risks to reservoir integrity and productivity. OGDCL reported an $8 million revenue loss over the past eight weeks due to curtailed production of 1,461 mmcfd of gas, 26,394 barrels of oil, and 1,391 MT of LPG.
PPL highlighted the negative impact of curtailed production on field development plans, operational longevity, and investor confidence. Persistent gas curtailments and a lack of clear resolution are eroding stakeholder trust, jeopardizing investment in Pakistan’s energy sector.
Authorities from the Petroleum Division attributed the gas curtailment to efforts to manage national transmission network pressure caused by RLNG consumption in the power sector. However, they failed to justify the $194 million loss resulting from a 50% reduction in local gas production over the past four months.
Data reveals that gas curtailments included reductions of 50 mmcfd from Sui (SML), 25 mmcfd from Qadirpur, 70 mmcfd from Mari (Ghazij + HRL), 30 mmcfd from Mari-GTH, 45 mmcfd from Nashpa, and 80 mmcfd from MOL, among others. The authorities also noted that lower GDP growth and high gas tariffs have reduced gas consumption by 150 mmcf per month.
To manage LNG supplies, the Power Division shifted five LNG cargos initially scheduled for 2025 to 2026. However, stakeholders warn that continued mismanagement and gas curtailments could have dire consequences for the country’s energy sector and broader economy.
