Pakistan has cancelled 21 liquefied natural gas (LNG) cargoes from Italy’s Eni under a long-term supply agreement, as the country faces a significant gas surplus that has strained its distribution network, according to a report by Reuters. The cancellations include 11 shipments scheduled for 2026 and 10 for 2027, following a request from Sui Northern Gas Pipelines Limited (SNGPL). Only the January cargoes for both years and one in December 2027 will be retained to meet peak winter demand.
Italy’s Eni agreed to the cancellation under flexible contract clauses that allow the company to benefit from profitable sales in the spot market. This arrangement gives Eni an advantage as global LNG prices remain volatile, while also helping Pakistan reduce its excess supply burden.
In addition to the Eni deal, Pakistan is in talks with Qatar to either defer or resell additional LNG shipments under existing long-term contracts, though no final decision has been made yet. Together, the agreements with Eni and Qatar account for about 120 LNG cargoes per year.
The current oversupply has created logistical and financial challenges for Pakistan’s gas sector. Authorities have been forced to sell surplus gas at discounted rates, cut back on local production, and explore options such as offshore storage or re-exporting LNG to balance supply and demand.
Eni last delivered an LNG cargo to Pakistan on January 3, 2025, after supplying 12 shipments in 2024. Both parties have also mutually agreed to suspend all deliveries for the year 2025 as part of efforts to manage Pakistan’s energy surplus and stabilize its gas market.