Qatar Cancels 24 LNG Cargoes as Pakistan Restarts Local Gas Production
Qatar has agreed to cancel 24 surplus Liquefied Natural Gas (LNG) cargoes for 2026 while allowing Pakistan to reopen previously shut local gas wells from January 2026. The decision came amid declining gas demand, surplus LNG imports and growing financial pressure on Pakistan’s gas sector. The move is expected to restore domestic gas supply, reduce import dependency and ease the country’s mounting circular debt.
Qatar Agrees to LNG Cargo Cancellations
Pakistani Government sources confirm that Qatar will cancel 24 LNG shipments which are scheduled for 2026. Earlier the federal cabinet had approved the diversion of 45 LNG cargoes due to falling domestic gas consumption and these steps reflect Pakistan’s broader strategy to manage surplus imported gas and rebalance the energy mix.
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Local Gas Wells to Reopen from January 2026
The surplus LNG had forced Pakistan to shut local gas fields producing around 200 million cubic feet per day (MMCFD). With cargo cancellations now agreed, these wells are set to resume production from January 2026, helping stabilize the gas supply system and prevent pipeline damage caused by unused LNG.
Reduced LNG Imports and Major Savings
Pakistan has plans to import 85 LNG cargoes from Qatar in 2026 that is down from the earlier plan of 120. Overall 35 cargoes will be cancelled including 24 by Pakistan LNG Limited and 11 by Italy’s Eni. These cancellation are expected to generate savings of approximately Rupees 20.1 billion.
Impact on Gas Sector Finances
Officials say the move will help Sui gas companies meet financial obligations of nearly Rs850 billion. Pakistan gas sector circular debt currently stands at Rupees3.1 trillion which include Rs1.7 trillion in principal and Rupees 1.4 trillion in interest and Authorities have prepared a six year plan featuring debt restructuring, interest relief and a proposed Rs5 petroleum levy to manage the crisis.
Declining Demand and LNG Surplus
Gas consumption has dropped due to increased renewable energy generation and lower industrial demand. Long-term LNG contracts with Qatar and Eni cover around 120 cargoes annually but reduced power sector usage has created an oversupply. As a result Pakistan has been forced to sell gas at discounts, cut domestic production and explore storage or resale options.
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Conclusion
The cancellation of LNG cargoes by Qatar and Eni marks a significant shift in Pakistan’s gas strategy and by reopening the local gas wells and cuts the costly imports and addressing the surplus supply Pakistan aims to reduce the financial strain, manage circular debt and align energy imports with actual demand. While challenges remain these steps signal a move toward a more balanced and sustainable gas sector in Pakistan.