Pakistan LNG Demand May Rebound as Global Supplies Increase and Prices Ease

Pakistan's LNG demand may be on the verge of recovery as global supplies increase and prices ease, according to Pakistan LNG CEO Masood Nabi. Global spot LNG prices have risen to nearly $30 per million British thermal units (MMBtu), approximately three times the pre-war level of around $10, due to disruptions in Middle Eastern exports caused by the US-Iran conflict.

The conflict has removed about 36 million tonnes of Middle Eastern LNG from the global market so far this year. Qatar and the UAE have been unable to export most of their LNG through the Strait of Hormuz, which previously handled around one-fifth of global LNG supplies.

As a result, prices surged, weakening demand across Pakistan, India, and China, prompting some gas consumers to switch to alternative fuels like coal and oil. However, Nabi believes that if prices become more affordable with the influx of new LNG volumes, demand could rebound in these countries.

In India, where price-sensitive industries have switched fuels when gas became uneconomical, GAIL Chairman Deepak Gupta reported that initial restrictions on gas consumption have since been restored to around 90% to 95% after increasing purchases from alternative sources. Industry executives expect the decline in Asian LNG consumption to prove temporary if prices fall as supply conditions improve.