LNG supply expected to improve, ban on domestic connections may end soon

Islamabad: The decision to ban new domestic LNG connections in Pakistan may be reversed in the coming weeks, and the government is hoping for an improvement in the supply of liquefied natural gas from Qatar, which will further boost the availability of gas within the country.

Sources in the Petroleum Division say the force majeure by Qatar on LNG supply could still be in effect until the end of August. Following this period, the supply chain is anticipated to return to normal, leading to better availability of LNG imports to Pakistan.

If the much-anticipated supply improvement materialises, the government will review the ban on new domestic LNG connections in September, sources said. The ruling is designed to give relief to consumers who have been waiting for new connections for a long time.

The other key development announced in September is that demand for LNG from the power generation industry might fall due to the weather conditions, officials said. Domestic and other consumers are likely to get relatively better gas availability as the demand from the power sector is reduced, and this could further ease the supply pressure.

But the relevant authorities have explained that final clearance to lift the ban won’t just be based on expectations, as a full review of the existing LNG availability, reserves and demand would be conducted. If the import supply is restored as planned and adequate quantities are available to meet the domestic needs, then the official announcement of the restoration of new connections can be made.

According to energy experts, the availability of LNG in Pakistan is directly related to the global supply chain, import agreements and local demand. That is why the government usually takes decisions regarding new connections, keeping these factors in mind so that the gas supply of existing consumers is not affected.

If the above estimates are accurate, the Sept. improvement in the LNG supply situation should help to open up new domestic connections, as well as ease general gas management, according to sources. It remains to be seen, however, until a new analysis of supply and demand conducted by the appropriate agencies is made that the final decision will be made.