Pakistan has signed an agreement to cancel 21 liquefied natural gas (LNG) cargoes originally scheduled under a long-term contract with Eni for 2026 and 2027, as part of a broader plan to limit excess imports, according to an official document and two sources familiar with the matter.

A document from the state-owned Pakistan LNG Ltd (PLL), addressed to the Ministry of Energy and dated October 22, states that the company will proceed with the cancellation of 11 cargoes planned for 2026 and 10 for 2027, following a request from gas distributor SNGPL.

According to the document, seen by Reuters, only the shipments scheduled for January of both years and the one for December 2027 will be maintained to meet peak winter demand.

Two sources with knowledge of the dossier reported that Eni has accepted the decision in accordance with the contract’s flexibility provisions. LNG is in high demand globally, and suppliers typically earn more by selling cargoes on the spot market rather than through long-term contracts.

PLL, SNGPL, and Pakistan’s Ministry of Petroleum did not respond to requests for comment. Eni also declined to comment.

TOO MUCH GAS, TOO LITTLE DEMAND

According to two of the sources, Pakistan is also in talks with Qatar regarding gas supplies; among the options under consideration are the postponement or resale of certain cargoes in line with contractual clauses. QatarEnergy has not yet responded to a request for comment.

Eni signed a long-term LNG supply agreement with PLL in 2017, committing to deliver one cargo per month until 2032, with the option to redirect deliveries to other destinations.

Pakistan’s long-term LNG supply agreements with Qatar and Eni together cover around 120 cargoes annually: on average, nine per month from two Qatari contracts and one from Eni.

This year, LNG imports to Pakistan have dropped sharply due to reduced demand from power producers, attributed to increased solar and hydropower generation.

The surplus has forced Pakistan to sell gas at steep discounts, limit local production, and consider offshore storage or the resale of excess cargoes, according to the document.

(Translated by Jasmine Mazzarello, editing by Francesca Piscioneri)