Pakistan turns to spot LNG market again

Amid fears of a return to countrywide electricity load-shedding during the summer season, Pakistan has again moved to arrange two spot liquefied natural gas (LNG) cargoes for power generation as the Strait of Hormuz remains closed due to the Iran-US war.

State-run Pakistan LNG Limited (PLL) floated a tender, to be opened on May 7 (today), for two urgent LNG cargoes from the spot market, for delivery between May 12–14 and May 24–26. PLL is seeking 140,000 cubic metres of LNG, equivalent to around 100 million cubic feet per day (mmcfd) of gas supply.

The government has already arranged a spot LNG cargo at a record rate of $18.4 per million British thermal units (mmBtu) in a rush to counter electricity shortages that caused 10–16 hours of load-shedding nationwide, triggering political backlash.

Pakistan State Oil (PSO) has been importing LNG from Qatar and supplying it to consumers at around $13 per mmBtu, which is used in power plants for electricity generation.

Currently, there is no LNG supply from Qatar, which has declared force majeure due to the Iran-US war, causing gas shortages for power generation in Pakistan.

The high cost of LNG being procured on the spot market will push up electricity tariffs, resulting in higher consumer bills in May and July 2026.

After arranging a spot LNG cargo, Federal Minister for Power Division Awais Leghari announced an end to load-shedding following the arrival of LNG supplies.

The government is now set to arrange two additional LNG cargoes to avoid possible electricity load-shedding in the coming months as the Strait of Hormuz remains closed.

The Power Division was of the view that the load-shedding experienced in recent weeks was primarily due to a gas shortage, not because of any system failure or lack of generation capacity.

Consumers faced up to five hours of load-shedding on April 13 and 14. However, the minister claimed there was no load management between April 17 and 19.