Pakistan has successfully negotiated the cancellation of 21 liquefied natural gas (LNG) cargoes scheduled under its long-term contract with Italy’s Eni. This pivotal decision is part of a national strategy to curb excess imports that have resulted in a significant surplus across the country’s gas network.
The state-owned energy sector entities confirmed that the cancellations—11 cargoes slated for 2026 and 10 for 2027—were initiated by the major gas distributor, Sui Northern Gas Pipeline Ltd (SNGPL). Eni reportedly agreed to these significant adjustments under the existing contract’s flexibility provisions.
The agreement allows only minimal shipments to continue during peak winter demand periods: specifically, the January cargoes in both 2026 and 2027, and the December 2027 shipment. Furthermore, Pakistan has reached a separate agreement with Eni not to receive any additional cargoes throughout 2025.
This concerted effort to scale back purchases is necessitated by changing national energy dynamics. The surplus gas has accumulated primarily due to declining demand from the power sector, which is increasingly utilizing greater output from solar and hydropower sources. Reduced gas consumption by industrial units generating their own electricity has further exacerbated the glut, leaving the system significantly oversupplied for the first time in several years.
This unexpected surplus has forced the government to adopt drastic measures, including selling gas at substantial discounts, limiting domestic production, and exploring complex options like offshore storage or reselling excess volumes.
**Broader Strategy and Qatar Negotiations**
The move represents one of Pakistan’s most aggressive strategies yet to manage its LNG obligations. The original contract with Eni, signed in 2017, committed the supplier to delivering one cargo per month until 2032.
Beyond the Eni contract, Pakistan is also actively engaged in negotiations concerning its supplies from Qatar. The Gulf state’s agreements, combined with the Eni deal, historically account for approximately 120 cargoes annually. Options currently being discussed with Qatar involve deferring certain scheduled cargoes or utilizing contractual clauses to resell the supplies back into the market.
Notably, these negotiations with long-term suppliers occurred despite strong global demand for LNG, a scenario which usually incentivizes suppliers to utilize flexibility provisions to earn higher profits by selling cargoes on the open spot market.
