Pakistan's bold move to cancel Eni LNG cargoes has sparked a wave of controversy and intrigue. In a surprising turn of events, Pakistan has decided to cancel a significant number of liquefied natural gas shipments from Eni, an Italian energy giant, as part of a strategic plan to address an unexpected surplus of imported gas.
This decision, outlined in an official document and confirmed by sources, is a response to a unique situation where Pakistan's renewable energy generation has surged, coupled with reduced industrial demand, leaving the country with an abundance of gas.
But here's where it gets interesting: Pakistan's state-owned Pakistan LNG (PLL) has not only canceled 21 cargoes but has also initiated talks to renegotiate its supply agreement with Qatar, another major LNG supplier.
The original deal with Eni, signed in 2017, committed to delivering one cargo per month until 2032, with the flexibility to divert shipments. However, with the unexpected drop in demand, Eni has agreed to cancel shipments under the contract's flexibility provisions.
And this is the part most people miss: Pakistan's long-term supply deals with Qatar and Eni together account for a staggering 120 cargoes annually, highlighting the scale of the surplus.
The glut of gas has forced Pakistan to take drastic measures, including selling gas at discounted rates, curbing local production, and even considering offshore storage or reselling excess cargoes.
Eni's last delivery to Pakistan was in January 2025, and sources indicate that Pakistan has agreed not to receive any further cargoes from Eni this year.
With the talks ongoing, the future of Pakistan's LNG supply and the potential impact on the global LNG market remain uncertain.
So, what do you think? Is Pakistan's move a smart strategic decision, or is it a risky gamble? We'd love to hear your thoughts in the comments!
