By SKM
November 19, 2026
ISLAMABAD: Pakistan will continue to pay $538,535 per day — nearly $15 million per month — in capacity and utilization charges to its two RLNG terminals despite the force majeure declared by QatarEnergy on March 4 on LNG supplies to buyer countries, following the halt of LNG production on March 2.
The country, which has so far imported LNG worth $35 billion, has already paid around $3 billion in capacity charges alone, making the ongoing financial burden particularly alarming amid a worsening external account position. Soon after QatarEnergy declared force majeure on March 4, Pakistan’s key energy entities — Pakistan State Oil, Sui Southern Gas Company, Sui Northern and Pakistan LNG Limited — also invoked force majeure under their respective agreements.
Senior officials in the Petroleum Division confirmed that government entities, including Sui Southern Gas Company and Pakistan LNG Limited, have also invoked force majeure under their respective agreements. However, the contracts signed with Engro Elengy Terminal Pakistan Limited (EEPTL) and Pakistan GasPort Limited (PGPCL) require uninterrupted payment of capacity charges in US dollars—even when LNG supply is disrupted and no regasification takes place.
This means Pakistan remains locked into payments despite receiving no gas, exposing what officials describe as a critical flaw in the structure of long-term LNG terminal agreements. The burden comes at a time when the government is already grappling with rising POL prices linked to Dubai and Oman benchmarks, raising fears of a higher oil import bill and further depletion of foreign exchange reserves.
The regasification of two LNG cargoes imported on March 1 and March 3 is expected to conclude by March 27, 2026, after which Pakistan will have no LNG available for processing. Despite this, the government will still be required to continue paying daily capacity charges to terminal operators under existing agreements.
This means that even in the complete absence of LNG supply, Pakistan will remain locked into fixed dollar-denominated payments, further intensifying the financial burden on the energy sector and the national exchequer.
Federal Minister for Petroleum, Ali Pervaiz Malik, termed the agreements “faulty” and “not in favour of the country,” questioning the rationale behind continuing payments during a force majeure situation. “When there is no LNG available for regasification, how can terminal operators continue to receive capacity charges?” he asked, adding that he has directed PLL and SSGC to engage terminal companies and seek relief.
Under the agreements, however, relief appears unlikely. One of the terminal operators has made it clear that the contracts do not permit suspension of payments under force majeure and warned that any unilateral halt could trigger legal proceedings at the London Court of International Arbitration (LCIA) for breach of contract.
The financial commitments stem from long-term take-or-pay arrangements signed to attract private investment in LNG infrastructure. The EETPL terminal, operational since March 28, 2015, has a regasification capacity of 690 MMcfd, of which SSGC contracted 600 MMcfd for 15 years. Under this agreement, SSGC pays $228,016 per day in capacity charges, $59,900 per day in utilization charges, and approximately $47,986 per cargo per day for regasification, translating to $0.4798 per MMBtu.
Similarly, the PGPL terminal, operational since January 4, 2018, has a capacity of 750 MMcfd, with PLL booking 600 MMcfd. PLL is obligated to pay $245,220 per day in capacity charges and $5,400 per day in utilization charges, regardless of whether LNG is supplied. The regasification tariff stands at $0.4177 per MMBtu. Crucially, even if PLL fails to supply LNG after invoking force majeure, it remains bound to continue capacity payments under the agreement.
Officials say these payments are meant to ensure uninterrupted terminal operations, including maintenance of floating storage and regasification units (FSRUs) and staffing costs. However, critics argue that the contracts place disproportionate risk on the public sector, especially in extraordinary situations like supply disruptions caused by external events.
The cumulative impact is severe. In addition to fixed daily payments, Pakistan faces broader macroeconomic pressures, including a rising import bill and potential strain on foreign exchange reserves. The continuation of dollar-denominated payments without corresponding energy supply is being viewed as an unsustainable drain on the economy.
The episode has also reignited concerns about governance and negotiation of energy contracts, with policymakers now questioning why safeguards against force majeure scenarios were not adequately incorporated. With agreements locked in for 15 years and legal risks looming, Pakistan has limited room to maneuver. Ends
