Pakistani Government Considers LNG Terminal Capacity for Power Plants

The Pakistani government is considering changes to its policy on liquefied natural gas (LNG) imports, particularly for power plants. The aim is to allocate unutilized capacity at LNG terminals to these plants, allowing them to import gas directly.

This move comes as the country faces electricity outages due to a shortage of gas, exacerbated by disruptions in LNG supplies through the Strait of Hormuz caused by the US-Iran war. As a result, Pakistan LNG Limited (PLL) has arranged spot LNG cargoes at record high prices, but these are insufficient to meet demand.

The government's proposal suggests auctioning unutilized capacity for a specified period and quota, taking into account downstream demand and plans for LNG imports. This would allow private parties to access idle capacity, potentially reducing the burden on consumers who have been paying over $0.2 million per day in capacity charges.