LNG contract deferred for a year: Musadik

ISLAMABAD: Pakistan has deferred an agreement to buy Liquefied Natural Gas (LNG) from a country for a year, Petroleum Minister Musadik Malik said on Wednesday.

The country will now receive the contracted LNG cargoes in 2026 instead of 2025.

Without disclosing the names of the sellers, Malik told reporters, “We currently have a surplus of LNG, so we are not importing any new cargo,” adding there are no financial penalties for deferring, rather than cancelling, the order.

The annual power use in Pakistan, which gets over a third of its electricity from natural gas, has fallen 8-10 percent year-on-year over the past three quarters, the power minister said in November, primarily due to higher tariffs curbing household consumption.

The government said in November it was slashing its electricity tariffs over the winter to boost consumption and cut the use of natural gas for heating. Many power utilities in Pakistan have had to curtail or even halt operations in winter months due to demand dropping by up to 60 percent from peak summer levels.

Malik said in June that Pakistan was unlikely to buy LNG cargoes on the spot market until at least the beginning of winter in November due to oversupply and high prices.

Pakistan, which last bought a spot LNG cargo in late 2023, cancelled its spot LNG tender for delivery in January owing to oversupply and lack of buyers in Pakistan at spot prices.

Meanwhile, Musadik Malik denied media reports claiming that Pakistan had reached a deal with Russia to import crude oil at a discounted rate. “The news of a deal with Russia on crude oil is absolutely false. No agreement has been reached with Russia regarding such a deal,” Malik told reporters.

The federal minister’s clarification comes after it was reported that Islamabad had decided to import Russian crude oil at a discounted rate on the offer of Moscow.

Elaborating the issue, the minister said the government wasn’t buying any crude oil cargo from Russia. “We are creating such a framework that the consumer gets cheap oil.”

Malik also revealed that Pakistan has signed MoUs of $2.7 billion with Saudi Arabia. According to the federal minister, seven of these MoUs have already transformed into agreements.

He said that five Saudi companies participated in a roadshow held by the Pakistan Refinery Limited (PRL) in Saudi Arabia, with one of them expressing interest in investing $1.7 billion in PRL. Malik added that a roadshow for establishing a new refinery in Pakistan will be held in Saudi Arabia soon.

The petroleum ministry is currently working on the roadshow for the Greenfield refinery project, he noted. The minister also disclosed that an understanding has been reached with Saudi Arabia for the provision of trained personnel. Additionally, Saudi companies have shown significant interest in investing in Pakistan’s mineral sector, he said.

Meanwhile, Pakistan Refinery Limited (PRL) Wednesday clarified that no agreements or commitments have been made by the PRL to import crude oil from Russia.

In a notice to the Pakistan Stock Exchange (PSX), PRL addressed recent news reports suggesting that it has agreed to import Russian crude oil at discounted rates. “We remain committed to transparency and will keep our stakeholders informed of any developments directly through our official channels,” it added.