- Similar adjustment mechanism to cover 21 LNG cargoes from Eni for 2026 and 2027 under projected demand-supply alignment
Pakistan State Oil (PSO) informed the federal government of Qatar Energy’s willingness to adjust the net proceeds differential for 24 LNG cargoes scheduled for 2026, The Express Tribune reported.
This move follows challenges in the gas sector, particularly due to low offtake by power producers, which has led to “demand destruction” and resulted in a surplus of LNG. A report has been submitted to the Economic Coordination Committee (ECC) of the federal cabinet.
Under a net proceeds differential mechanism, the cargoes will be diverted to the open market, and Pakistan will bear the financial loss if Qatar sells the LNG cargoes at a price below the agreed contract price.
The price differential will be passed on to LNG consumers, with policy guidelines to be issued by the federal government to the Oil and Gas Regulatory Authority (Ogra) to implement this.
Pakistan signed two LNG supply agreements with Qatar and one with Eni. As part of the Qatar agreement, the country receives nine cargoes per month, and under the Eni deal, one cargo per month.
However, the ongoing decrease in demand has led to surplus LNG. In response, the Petroleum Division and Pakistan LNG Limited (PLL) worked with Eni to sell 11 cargoes in 2025 on a net proceeds differential basis. Additionally, discussions were held with Qatar to defer five LNG cargoes scheduled for delivery in 2025.
The government initially estimated a surplus of approximately 177 LNG cargoes from July 2025 to December 2031, prompting a request to Qatar Energy to slow down supplies. After reviewing several options, including reducing surplus cargoes or amending contracts, the ECC authorised the Petroleum Division to discuss the matter with Qatar.
In late August 2025, a Pakistani delegation visited Doha to finalise the terms with Qatar Energy. Following further discussions, Qatar agreed to the net proceeds differential for 24 cargoes in 2026. PSO will close the discussions before the November 15, 2025, deadline.
Additionally, a similar mechanism will apply to 21 cargoes from Eni for 2026 and 2027, in line with the projected demand-supply balance.
