Pakistan Hit by Severe LNG Shortages as Hormuz Disruptions Deepen

Pakistan has emerged among the countries most severely exposed to liquefied natural gas supply disruptions caused by restrictions around the Strait of Hormuz, intensifying concerns over electricity generation, industrial activity and gas availability. The disruption is particularly significant because imported LNG has become an important part of the country's energy system and supplies several critical sectors of the economy.

Qatar and the United Arab Emirates account for roughly 99% of Pakistan's LNG supplies, according to an assessment presented at the Gastech energy conference. Imported LNG represents about 30% of the country's overall gas supply and is used extensively by power plants, fertiliser producers and industrial consumers. That heavy dependence on a small number of Gulf suppliers leaves Pakistan vulnerable when shipping through the region is interrupted.

The latest pressure follows prolonged instability around major Middle Eastern energy routes. Disruption to flows through the Strait of Hormuz and mounting uncertainty around other regional shipping corridors have tightened the global LNG market and pushed Asian spot prices sharply higher. For Pakistan, purchasing replacement cargoes on the international spot market can therefore become substantially more expensive at the same time that available supplies are limited.

The domestic power sector faces an additional challenge as demand for gas is expected to remain substantial through the coming winter. Industry data indicate that electricity generation could require as much as 400 million cubic feet of gas per day during the season, while only a limited number of LNG cargoes have been confirmed for September. Although the rapid expansion of solar generation has reduced some pressure on the national grid, gas remains important for electricity production, households and industries that cannot easily switch fuels.

Energy planners are consequently examining ways to reduce Pakistan's exposure to future supply shocks. Options highlighted during discussions at Gastech include accelerating renewable-energy deployment, increasing storage capacity, improving flexibility at gas-fired power plants and maintaining larger strategic fuel reserves. Pakistan has also relied more heavily on coal, hydropower and nuclear generation as imported gas supplies have become less predictable, though the shift cannot fully eliminate the economic impact of expensive or disrupted LNG.

The Universal Gas Distribution Company has held discussions with international companies over possible investments in gas storage infrastructure and longer-term LNG supply arrangements. Chief executive Ghiyas Abdullah Paracha said international firms had shown interest in storage projects and long-term contracting, while the company also presented changes taking place in Pakistan's gas market and opportunities for greater private-sector participation.

The immediate impact could be felt through higher power-generation costs, pressure on industrial users and tighter gas availability if disruptions persist. Longer term, the crisis is increasing the urgency of diversifying fuel sources, expanding domestic storage and securing more resilient supply contracts. Decisions taken in the coming months will be important for Pakistan's ability to protect electricity generation and industrial output from future geopolitical shocks affecting Gulf energy routes.