Pakistan will maintain payments exceeding $15 million monthly for its LNG terminals despite QatarEnergy’s force majeure declaration earlier this month, as per The News International. The country is currently disbursing about $538,535 daily to the two terminals even though LNG production has been halted since March 2. Federal Minister for Petroleum, Ali Pervaiz Malik, has criticized the agreements, labeling them as flawed and against Pakistan’s interests.
Several state-run entities, including Pakistan State Oil, Sui Southern Gas Company, Sui Northern Gas Pipelines Limited, and Pakistan LNG Limited, have invoked superior force clauses in response to QatarEnergy’s force majeure. However, private LNG terminal operators’ agreements still necessitate continuous payments in US dollars, even during supply interruptions and regasification halts. This situation leaves Pakistan obligated to make payments without receiving gas, revealing a significant flaw in long-term LNG terminal contracts, officials have pointed out.
The ongoing payments are exacerbating financial strain on Pakistan, especially considering its fragile external account position. Economic fragility in the country has intensified following the US–Israel conflict with Iran, leading to a notable rise in oil prices and a widening trade gap. Pakistan’s economic vulnerability is evident in its low GDP growth rate of 3.1%, a Human Development Index (HDI) rank of 168 out of 193 countries, a per capita income of $1,812, a poverty rate of 28.9%, an adult literacy rate of 60%, 25.2 million out-of-school children, and an unemployment rate of 12.8% for ages 15–24.
