Pakistan Seeks LNG to Offset Iran Conflict Disruptions

Amid disruptions caused by the conflict in Iran, Pakistan is actively considering the purchase of liquefied natural gas (LNG) from the spot market. Petroleum Minister Ali Pervaiz Malik emphasized that while seeking such alternatives, the preference remains for government-to-government agreements to avoid steep market premiums.

With LNG spot cargo prices soaring between $20 and $30 per mmBtu due to unrest in the Middle East, Pakistan's decision will hinge on whether these prices remain viable for the power sector. Existing agreements with Azerbaijan's SOCAR and other measures like rerouting crude supplies through Saudi Arabia's Red Sea port of Yanbu are also under consideration.

Pakistan is bolstering its domestic energy output with record production from the Baragzai X-01 well. Despite energy cuts in LNG use, gas remains essential for meeting peak summer demands. However, prolonged shortages could impact food security, with officials mulling costlier energy alternatives like furnace oil, indicating potential tariff hikes.