Government to Reopen Shut Local Gas Wells from Next Year as Qatar Agrees to Cancel Surplus LNG Cargoes

Islamabad: The federal government has decided to reopen shut local gas wells from January 2026 after Qatar agreed to cancel surplus LNG cargoes, easing pressure on Pakistan’s gas system and finances.

Sources in the Ministry of Petroleum said that gas from previously closed local fields will start flowing into the system from January, as these fields had earlier been shut down to accommodate excess imported LNG.

According to officials, local gas fields were closed due to surplus LNG cargoes, as the power sector was unable to consume the imported fuel. The excess LNG was injected into the gas pipeline network, forcing authorities to shut domestic gas fields to prevent damage to pipelines.

Qatar has agreed to cancel 24 LNG cargoes scheduled for 2026, reducing Pakistan’s total LNG imports from 120 to 85 cargoes next year. In total, 35 LNG cargoes will be cancelled, including 24 Qatar LNG cargoes and 11 cargoes from ENI, resulting in an estimated saving of Rs201 billion.

Ministry sources said that surplus LNG had earlier forced the shutdown of local gas wells producing around 200 MMCFD. With the cancellation of excess cargoes, the system will now be able to absorb domestic gas production.

Officials added that the cancellation of surplus cargoes will help meet financial requirements, as the Sui gas companies’ funding needs of Rs850 billion are being addressed. However, the gas sector’s circular debt has reached Rs3.1 trillion, including Rs1.7 trillion in principal and Rs1.4 trillion in interest.

The Ministry of Petroleum has prepared a six-year plan to manage the circular debt stock. The plan, comprising three options, will be presented to the federal cabinet for approval. These options include the imposition of a Rs5 petroleum levy, dividend adjustments by gas companies, and waiver of interest on circular debt.

Officials expressed hope that reopening local gas fields and reducing LNG imports would improve system efficiency and provide relief to the national exchequer.