Pakistan Issues Fourth Spot LNG Tender as Summer Heat Strains Power Supply

Pakistan Issues Fourth Spot LNG Tender as Summer Heat Strains Power Supply Islamabad seeks 1 million tons on the spot market just as the Iran war keeps Asian LNG scarce and India's demand climbs, tightening competition for cargoes. Pakistan has gone back to the spot market, issuing a tender for 1 million tons of LNG to cover surging summer power demand, The Nation reported on Thursday (2026-06-04). It is the country's fourth spot tender in recent weeks.⁷ That matters because Pakistan is buying into one of the tightest LNG markets in years. Asian spot prices crossed $25/mmBtu after the Iran war damaged Qatar's liquefaction infrastructure and disrupted flows through the Strait of Hormuz, a route that handles close to 20% of global LNG, according to a March 2026 assessment that flagged Pakistan and India among the most exposed buyers.^7,3 The timing is awkward for Islamabad. Pakistan's inflation soared 11.7% in May (2026-05), the state statistics agency reported earlier this month, with core inflation up 9% on the year. Buying premium-priced spot cargoes to keep air conditioners running is exactly the kind of import bill a country with that inflation print can least afford.⁷ The supply backdrop is the problem. Damage to Qatar's facilities has sidelined around 12.8 million tons per annum, with recovery timelines stretching as far as five years, while leading consultancies have cut global LNG supply projections by as much as 35 million tons. Asian prices have surged 143% on the disruption.³ India sits on the other side of the same squeeze. India's LNG demand is rising as the regional market tightens, which puts the two South Asian buyers in direct competition for the same scarce cargoes at a moment when neither can easily absorb $25/mmBtu gas.⁷ For richer importers, the response has been to burn something else. Japan and South Korea sharply raised coal-fired generation in April and early May as LNG prices climbed, according to market data cited by Kyodo, with gas-fired electricity displaced as buyers reached for cheaper fuel.^5,6 The numbers behind that switch are concrete. Fei Xu, senior gas analyst at ICIS, said Japan's increased coal generation displaced roughly four LNG cargoes in April, about half the annual import reduction the government had expected from its clean-energy push. The Iran war, in other words, is unwinding a year of planned LNG demand growth in weeks.⁶ The shift reflects Iranian retaliation to U.S.-Israeli strikes that disrupted around 17% of LNG export capacity in Qatar, the world's second-largest supplier. Elsewhere in Asia, a heatwave in Vietnam pushed coal-fired generation up 12.3% in April to a record 17,864 gigawatt-hours, government figures showed.⁶ Pakistan has fewer outs. Its coal optionality is thinner than Japan's or South Korea's, and the seasonal demand driving the tender is heat, not industrial load that can be deferred. That leaves spot LNG as the marginal fuel for keeping the grid up through summer, regardless of price.⁷ There is a longer-running structural shift underneath all this. Coal generation fell in both China and India in 2025 for the first simultaneous drop in half a century, with Indian coal power down 3.0% year-on-year, or 46 terawatt hours, as each country added record clean-energy capacity, Carbon Brief reported. India's rising LNG appetite runs against that grain, a reminder that a single supply shock can pull buyers back toward whatever fuel clears the market.⁴ The trade to watch is the spot-market reaction to how Pakistan's tender clears. Four tenders into the summer, with India bidding alongside and Qatari supply still impaired, the question is whether South Asian buyers can secure volumes at all, or whether they get priced out and forced toward coal and load-shedding.^7,3 US gas, by contrast, looks comfortable. June Nymex Henry Hub front-month settled at $2.96/mmBtu on Friday (2026-05-15), up 7.4% on the week, with weekly vessel departures from US export terminals reaching 141 Bcf, up 26 Bcf despite maintenance at several facilities. The constraint is liquefaction and shipping capacity, not the resource. Whether more of that gas can reach a short Asian market through the summer is the open question for anyone watching the arb.^1,2