LNG disruptions put Pakistan’s energy supply under pressure

Pakistan is facing significant pressure from disruptions in liquefied natural gas (LNG) supplies following the closure of the Strait of Hormuz, raising concerns over the country’s energy and power security.

A report released at the Gastech conference said Pakistan is among the countries most affected by the disruption. Qatar and the United Arab Emirates provide around 99 per cent of Pakistan’s LNG supplies. The fuel is mainly used for power generation, fertiliser production and industrial activities.

The report noted that LNG contributes nearly 30 per cent of Pakistan’s overall gas supply. Continued uncertainty in international shipping and fuel prices could therefore create additional challenges for the country’s energy sector.

The disruption has also renewed discussions about reducing dependence on imported gas. The report suggested greater investment in renewable energy, including large-scale solar projects, wind farms and commercial rooftop solar systems. Energy storage facilities could also help strengthen the power system.

Pakistan may also need to expand gas storage capacity and improve the flexibility of its power generation system. Building larger strategic fuel reserves and maintaining additional operating capacity could help the country respond to unexpected supply disruptions.

The report said the conflict involving Israel, the United States and Iran and the resulting bottleneck around the Strait of Hormuz have highlighted the vulnerability of global gas and LNG markets. It added that supply disruptions could increase electricity generation costs because of higher fuel prices and shipping uncertainty.

Pakistan is also considering greater reliance on coal, hydropower and nuclear energy to manage gas shortages and strengthen domestic power supplies.

Universal Gas Distribution Company (UGDC) CEO Ghiyas Abdullah Paracha said the company held discussions with several international firms during the Gastech conference.

He said some companies had expressed interest in developing gas storage facilities in Pakistan, while others showed interest in long-term LNG supply agreements with UGDC.