ISLAMABAD: Pakistan’s dependence on imported liquefied natural gas (LNG) is facing fresh challenges as disruption around the Strait of Hormuz threatens LNG shipments, pushes up international gas prices and raises concerns about the country’s energy security.

Pakistan relies heavily on imported LNG for power generation, fertiliser production and industrial activity. A recent assessment by Gastech Conferences estimates that Qatar and the United Arab Emirates account for about 99% of Pakistan’s LNG supplies, highlighting the country’s exposure to disruptions affecting a limited number of suppliers and a critical shipping route.

LNG provides around 30% of Pakistan’s overall gas supply, making uninterrupted imports important for both the energy sector and the wider economy.

Strait of Hormuz disruption puts Pakistan LNG supply under pressure

The latest disruption has highlighted the risks associated with Pakistan’s dependence on imported LNG.

Any prolonged interruption to LNG shipments could affect fuel availability for power plants and industries while also increasing procurement costs. Higher international LNG prices could eventually place additional pressure on electricity-generation costs and the broader economy.

Pakistan’s exposure is particularly significant because much of its LNG comes from the Gulf region and must pass through strategically important maritime routes.

The situation has therefore renewed calls for a more diversified energy strategy that can reduce the impact of international supply disruptions and price volatility.

Pakistan needs stronger energy security strategy

The LNG supply concerns have increased the focus on measures that could strengthen Pakistan’s long-term energy security.

Gastech’s assessment highlights greater investment in renewable energy, energy storage and flexible power-generation capacity as potential ways for Asian economies to improve resilience.

For Pakistan, this could include expanding utility-scale solar and wind projects, encouraging commercial and industrial rooftop solar installations and developing battery-storage systems.

Increasing gas-storage capacity could also provide an additional buffer during periods when LNG shipments are delayed or international prices rise sharply.

Rising LNG prices increase pressure on Pakistan

International LNG markets have become increasingly sensitive to geopolitical developments and disruptions to major shipping routes.

Reuters has reported a significant increase in Asian LNG prices during the current disruption, with Pakistan among the countries affected by pressure on imported gas supplies.

When LNG becomes expensive or difficult to secure, countries can turn to alternative fuels. Pakistan has traditionally relied on a combination of natural gas, coal, hydropower, oil and nuclear energy for its electricity requirements.

However, switching between fuels is not always straightforward. Power plants may require specific infrastructure or modifications to operate with different fuels, while alternative energy sources can also carry environmental, logistical and financial costs.

Pakistan explores coal, hydropower and nuclear energy

The pressure on imported LNG is increasing attention on other sources of energy available to Pakistan.

According to the Gastech assessment, coal, hydropower and nuclear power are among the alternatives being considered as the country seeks to reduce its exposure to imported gas.

Renewable energy could also play a greater role in Pakistan’s future energy mix. Solar and wind generation can reduce dependence on imported fuels, although greater renewable penetration will require investment in electricity transmission, grid management and energy-storage technologies.

A broader energy mix could help Pakistan reduce the risks created by excessive dependence on any single fuel or group of suppliers.

Gas storage could improve Pakistan’s energy resilience

The current LNG disruption has also brought attention to Pakistan’s limited ability to manage sudden changes in imported gas supplies.

Developing additional gas-storage facilities and strategic fuel reserves could give energy companies and power producers greater flexibility during supply interruptions.

More flexible power plants could provide another layer of protection by allowing electricity generation to respond more quickly to changes in fuel availability and prices.

Such infrastructure would require substantial investment, but it could help reduce Pakistan’s vulnerability to future international energy-market disruptions.

Private sector seeks investment in Pakistan’s gas market

The changing energy environment is also creating opportunities for private investment in Pakistan’s gas sector.

Universal Gas Distribution Company (UGDC) Chief Executive Officer Ghiyas Abdullah Paracha said the company held discussions with international firms at Gastech regarding potential projects involving gas storage, long-term LNG supplies and gas distribution.

Paracha said some international companies had expressed interest in developing gas-storage facilities in Pakistan, while others were considering long-term LNG supply arrangements with UGDC.

The company has also been seeking foreign investment and potential joint-venture partners for dedicated gas-distribution networks, reflecting the growing role of private companies in Pakistan’s evolving gas market.

LNG disruption highlights need for energy diversification

The current pressure on Pakistan’s LNG supplies has highlighted a broader challenge facing the country: how to maintain reliable and affordable energy while reducing exposure to international fuel-market shocks.

In the short term, securing reliable LNG supplies and maintaining adequate fuel inventories will remain important for Pakistan’s power and industrial sectors.

Over the longer term, however, energy diversification could become increasingly important. Greater investment in renewable energy, battery storage, gas-storage facilities, hydropower and other domestic energy resources could help strengthen the country’s energy resilience.

Pakistan’s dependence on imported LNG is unlikely to disappear quickly, particularly because several industries and power producers continue to rely on natural gas. But the current disruption demonstrates why a broader and more flexible energy system could become an increasingly important part of Pakistan’s energy planning.