Pakistan Business Groups Press Government to Cut LNG Exposure as Hormuz Risk Persists
With Qatar and the UAE supplying 99% of Pakistan's LNG, a Gastech report has put Islamabad's industrial sector on notice.
Pakistan's business community called on Sunday (2026-09-20) for immediate policy action to reduce the country's reliance on imported LNG, citing prolonged supply disruptions tied to the Strait of Hormuz as an acute threat to power generation and industrial output.8
The urgency follows a Gastech report published Thursday (2026-09-17) that ranked Pakistan among Asia's most exposed economies to LNG supply shocks, with Qatar and the UAE together accounting for roughly 99 percent of the country's LNG purchases. Any sustained interruption to Gulf shipping routes hits Islamabad with almost no buffer.7
The structural vulnerability has been evident for months. When Hormuz traffic came under threat in late June (2026-06-29), Pakistan's state LNG importer moved into the spot market on an emergency basis, seeking delivery within days and inviting offers by June 29.4 The scramble came at a steep price: Pakistan LNG Ltd. had already purchased its most expensive cargo in approximately four years during the early phase of the disruption, according to a Bloomberg report referenced in the Times of India.3
Platts JKM LNG front-month was trading at $27.51 per MMBtu on Monday (2026-09-21), well above the $25 per MMBtu level that Asian prices crossed during the height of the supply squeeze earlier in 2026, which analysts at the time described as demand-suppressing territory.2
Wood Mackenzie has estimated that Gulf LNG export volumes could fall by 6.5 million tonnes per month if disruptions continue. The firm cut its forecast for Asian LNG imports to around five million metric tonnes for a two-month disruption scenario, down from 12.4 million tonnes expected under normal conditions. Lucas Schmitt, an analyst at Wood Mackenzie, said the conflict would "significantly reduce Asian LNG demand growth in 2026."1,7
Pakistan's exposure runs deeper than the spot market. The country holds two long-term LNG contracts covering about 6.75 million tonnes annually, both tied to Qatari supply, according to data reported by Outlook Business. The contracts provide volume certainty but not route security, and Qatar's export infrastructure has sustained damage during the conflict, sidelining an estimated 12.8 million tonnes per annum of supply capacity for what analysts describe as a multi-year repair horizon.6,2
The timing carries its own awkwardness. Pakistan spent much of 2025 managing an LNG oversupply, deferring deliveries and diverting shipments. None of that process meaningfully reduced the country's dependence on Qatar. When the disruption arrived, Islamabad found itself in the same exposed position it had occupied for years.6
The petroleum ministry has signaled one workaround. Petroleum Minister Ali Pervaiz Malik said Pakistan would raise LPG imports from Iran and was considering cheaper Iranian crude, a move that the ministry estimated could save between $170 million and $340 million on Pakistan's oil import bill, assuming up to 20 percent of petroleum purchases at discounts to international benchmarks. Whether Iranian volumes can substitute meaningfully for pipeline and LNG gas shortfalls remains a separate, unanswered question.5
Across the region, utilities are already shifting the generation mix. Bangladesh has increased coal-fired output and coal-based electricity imports this month, according to government data. Asian utilities more broadly are turning to coal as high LNG prices make gas-fired generation uneconomic, industry officials said. Global Energy Monitor has flagged roughly $107 billion in planned regional energy infrastructure investment as potentially at risk from the prolonged disruption.1
ICE Brent crude front-month was at $101.65 per barrel on Monday (2026-09-21), while Dubai crude was at $116.35 per barrel on the same data run — a spread that reflects the premium Gulf producers are commanding amid constrained regional supply flows. Platts JKM LNG front-month at $27.51 per MMBtu keeps spot LNG deeply expensive for price-sensitive South Asian buyers operating without substantial storage.2
For Pakistan's industrial sector, the arithmetic is stark. Spot procurement at elevated Platts JKM LNG front-month prices strains margins. Long-term contracts provide volume but not route diversification. Domestic gas production remains insufficient to cover the gap, and the Iranian LNG alternative does not exist at commercial scale. Whether Hormuz traffic stabilises enough for Qatar to resume full export schedules — and whether Pakistan can lock in any additional supply from outside the Gulf before the next disruption — are the two questions that matter most for Islamabad's energy planners in the weeks ahead.7,6