Pakistan will renegotiate its long-term LNG supply deal with Qatar as it looks to lower its costs for the growing energy demand going forward, Pakistani Petroleum Minister Musadik Malik said on Friday.

“The Qatar agreement is costly, and we will negotiate better terms next year,” Pakistani newspaper The News quoted Malik as telling a parliamentary committee on energy.

The country’s current LNG supply deal with Qatar is more expensive than other international deals, the minister was quoted as saying.

Pakistan, which uses natural gas for around a third of its power generation, seeks to lower energy costs amid an economic crisis that has been gripping the country since 2022.

The crisis has slashed power consumption but the federal government still needs to pay for the excess power capacity under long-term deals with independent power producers.

Pakistan has sought international funding to ease its economic and financial crisis, including from Gulf countries such as Saudi Arabia and the United Arab Emirates (UAE) and international lending institutions including the International Monetary Fund (IMF) and the World Bank.

Amid the crisis, Pakistan has additionally suffered from the high global energy prices in 2022 and 2023, which essentially priced the country out of the international spot LNG market.

Pakistan now considers its long-term contractual deal with Qatar to be expensive, too.

The current 10-year deal that Pakistan has with Qatar includes a provision allowing either party to terminate or review the treaty after a decade, The News reports.

At the end of 2024, Pakistan deferred contracted LNG cargoes from Qatar to receive these in 2026 instead of 2025.

“We currently have a surplus of LNG, so we are not importing any new cargo,” Malik said in December, as quoted by Reuters.

The deferment of the LNG cargoes doesn’t incur financial penalties for Pakistan, the minister added.

By Tsvetana Paraskova for Oilprice.com

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