Pakistan has reached an agreement with Italian energy company Eni to cancel 21 liquefied natural gas (LNG) cargoes under a long-term supply contract. According to an official document and government sources, the decision was made due to an oversupply of imported gas in the country’s pipeline network.

A document sent by Pakistan LNG Limited (PLL)—a state-owned company—to the Ministry of Energy stated that the cancellation was made at the request of Sui Northern Gas Pipelines Limited (SNGPL), the main gas distributor. Under the plan, 11 cargoes for 2026 and 10 for 2027 will be canceled. Only the shipments scheduled for January of both years and December 2027, when gas demand peaks during winter, will be kept.

Sources said that Eni agreed to the cancellation under the flexibility clauses of the contract. The company found it commercially viable because strong global LNG demand allows suppliers to earn higher profits by selling cargoes on the spot market instead.

Declining Demand and Talks with Qatar

Pakistan is currently facing a surplus of imported gas due to increased renewable energy generation and reduced demand from industries. This move marks one of the country’s largest efforts to reduce LNG purchases.

Sources added that Pakistan is also holding discussions with Qatar to adjust its LNG supply arrangements. Options include postponing some shipments or reselling them under the existing contract terms. However, no final decision has been made yet.

For the first time, Pakistan is dealing with an excess supply of gas, which has forced it to sell gas at discounted rates locally and explore options to store or resell surplus LNG internationally.