ISLAMABAD — Pakistan’s power sector consumed 28% less Regasified Liquefied Natural Gas (RLNG) in June 2025 than its committed volumes with Sui Northern Gas Pipelines Limited (SNGPL), creating both operational disruptions and financial strain for the state-run gas utility, according to a report by Business Recorder.
SNGPL has conveyed its concerns to the Directorate General of Gas (Petroleum Division) and the Power Division, warning that the deviation from the 550 million cubic feet per day (MMCFD) committed off take — with actual average usage falling to 396 MMCFD — is resulting in excess gas pressures in the pipeline system.
The company stated that continued underutilisation of RLNG poses risks to regasification operations at both LNG terminals, potentially causing delays in offloading cargoes and exposing the company to demurrage penalties and “take-or-pay” financial obligations. In the event of system imbalance, SNGPL may have to resort to curtailment of local gas supplies to maintain pipeline safety and pressure levels.
In parallel to the off take shortfall, the power sector’s unpaid RLNG bills to SNGPL have risen to Rs165.26 billion, compounding liquidity challenges.
SNGPL has urged the Petroleum Division to intervene and ensure immediate compliance with agreed RLNG off take volumes, while also requesting the Power Division to compensate for unutilised gas to restore balance in the system.
The National Power Control Centre (NPCC), now restructured as the Independent System and Market Operator (ISMO), has come under criticism for dispatching decisions that deviate from the Economic Merit Order (EMO). While ISMO argues that partial loading and plant selection are within the provisions of existing Power Purchase Agreements (PPAs), stakeholders at NEPRA hearings have questioned why lower-cost, indigenous fuel-based plants are often sidelined in favour of RLNG-fired units — particularly during demand peaks in Central Punjab.
In a recent hearing, NEPRA officials and industry experts called for real-time publication of generation mix and fuel costs to enhance operational transparency.
Following a March 2025 decision by the Economic Coordination Committee (ECC), the minimum RLNG offtake obligation under take-or-pay terms was revised down to 50% effective January 1, 2025, with implementation beginning May 2025. However, this reduction has not fully insulated SNGPL from excess inventory issues.
Member (Technical) of NEPRA, Rafique Ahmad Shaikh, in an additional note to the April 2025 Fuel Cost Adjustment (FCA) determination, pointed out that forced outages at lower-cost plants such as Uch-I and Engro PowerGen Qadirpur contributed to increased reliance on expensive RLNG-based generation. These outages, while not illegal under the terms of generation licenses, have cost implications that distort fuel cost recoveries.
Shaikh emphasised that ISMO should present a financial impact assessment of these outages during future FCA proceedings, including three-year outage data for each plant to assess operational reliability.
Partial Load Adjustment Charges (PLAC) — incurred when plants operate below optimal efficiency due to dispatch limitations — totalled Rs2.92 billion in April 2025 alone, pushing the cumulative FY25 total to Rs32.8 billion. Shaikh called for the creation of a comprehensive mechanism to reduce PLAC through improved demand-side management and generation planning.
Separately, Pakistan LNG Limited (PLL) has offloaded six scheduled LNG cargoes from Italian supplier ENI into the international spot market, under a 15-year supply agreement originally stipulating monthly deliveries from July to December 2025. Additionally, Pakistan has deferred five LNG shipments from Qatar to 2026, citing subdued domestic demand.
These developments point to a broader structural mismatch in Pakistan’s LNG procurement and power dispatch systems — where contracted gas volumes, operational inefficiencies, and limited absorption capacity continue to disrupt both gas and power sector equilibrium.
