Hormuz Disruption Forces Pakistan to Ration Gas Amid Soaring LNG Prices

The Strait of Hormuz disruption has severely impacted Pakistan's LNG imports, forcing the country to ration gas and consider alternative energy sources. According to Iqbal Z Ahmed, Chairman of Pakistan GasPort, the country received only three LNG cargoes last month, down from as many as 10-12 in the past. The reduction in supplies is having a significant impact on power generation, with higher prices further straining the economy.

Prices are already unaffordable for Pakistan, with the latest cargo purchased at around $27 per mmBtu. Ahmed warned that LNG companies risk undermining their own market by charging excessively high prices as new supplies come online. He urged producers to consider limiting profit margins rather than relying on market-driven pricing.

Ahmed also pointed out that US LNG producers could play a larger role in supplying countries such as Pakistan, India, and South Korea. The country has significant coal reserves and is expanding its solar power capacity, but it lacks alternatives to expensive LNG. Ahmed noted that Pakistan's two LNG terminals are being significantly underutilised, with the potential for private companies to import and sell LNG at better prices.