The Pakistani paradox: too much gas, 20 ENI shipments cancelled and negotiations with Qatar resume.

Remember 2022? The panic, the LNG tankers worth their weight in gold, the desperate rush to buy LNG (Liquefied Natural Gas) to fill storage and survive the winter without gas from Moscow. It seems like a lifetime ago, but in energy terms, it was yesterday. In that context, the idea of ​​having "too much gas" sounded like a science-fiction luxury, almost heresy.

Yet, in November 2025, this is the reality of an entire nation: Pakistan.

Islamabad now finds itself in the paradoxical situation of having to cancel LNG imports because it literally has nowhere to put it. Its network is saturated, demand has collapsed, and long-term contracts, signed in unsuspecting times, have become a noose around its neck.

The news, reported by Reuters , marks a turning point: Pakistan has reached an agreement with our ENI to cancel 21 LNG cargoes scheduled under their long-term contract. This drastic move reveals a deep structural problem for Islamabad and, at the same time, an interesting (and likely welcome) opportunity for the Six-Legged Dog.

The Deal: Less Gas, Fewer Problems (for Pakistan)

Let's analyze the facts. The document, from the state-owned company Pakistan LNG Ltd (PLL) and addressed to the Pakistani Ministry of Energy, is dated October 22. The request is clear: cut supplies.

The agreement with ENI provides for the specific cancellation of:

• 11 shipments expected for 2026
• 10 shipments expected for 2027

These cargoes, requested by the national distributor SNGPL , are simply excess. According to the revised plan, Pakistan will retain only January shipments for both years (and December 2027) to cover peak winter demand. For the rest, the taps will be closed.

But the situation is even more immediate. According to internal sources cited by Reuters, Pakistan has already reached an agreement with ENI not to receive any cargo for the entire year 2025. ENI's last delivery dates back to January 3, 2025, to the GasPort terminal. Since then, nothing.

The “Glut” of gas: when demand is lacking

How is it possible that an emerging country of over 240 million people, historically hungry for energy, suddenly finds itself “swimming” in gas?

The answer isn't simple and is a mix of good and bad news. It is, technically speaking, a failure of aggregate gas demand . There are two main reasons:

1. Renewables Rise (The Good News): Pakistan has invested in solar and hydroelectric power. This new "green" generation is coming online faster than expected, crowding out gas-fired thermal generation, which is more expensive and polluting.
2. Industrial Slowdown (The Bad News): Industrial demand is declining. Power plants and industrial units that generate their own electricity (often gas-fired) are consuming less. This is a technically negative signal, suggesting an underlying economic slowdown.

The result is a "glut," a surplus. The grid is oversupplied for the first time in years. For the Pakistani government, this is a management disaster. It is forced to sell the excess gas (the gas it is contractually required to withdraw) at steep discounts, cut local production, and even consider offshore storage or resale at a loss.

How did ENI react? A "No Comment" that's worth its weight in gold.

And here we come to the fundamental question for the Italian public: how did ENI react to this massive cancellation?

Officially, as is standard practice for energy giants in contractually sensitive situations, "Eni declined to comment." A polite "no comment."

But reading between the lines of the energy market, it's hard to imagine anyone in San Donato Milanese crying. In fact, it's plausible they're quietly celebrating.

To understand why, we need to take a step back and explain the difference between long-term contracts (LTC) and the “spot” market.

• The Long-Term Contract (LTC): The one between ENI and Pakistan was signed in 2017, valid until 2032. At that time, LNG was abundant and prices were low. "Indexed" LTCs (often to oil or hubs like the Henry Hub) guaranteed the seller (ENI) a secure customer for 15 years and the buyer (Pakistan) a stable and predictable price, protected from volatility.
• The Spot Market: This is the market for immediate purchases and sales. After the 2022 crisis and the disappearance of Russian gas pipelines to Europe, this market exploded. Spot prices skyrocketed to insane levels and, although they are now lower than their peaks, they remain structurally much higher and more volatile than pre-crisis levels (and therefore the prices locked in the 2017 contract).

By accepting Pakistan's request (made possible, Reuters specifies, by "flexibility clauses" in the contract), ENI isn't suffering a loss. On the contrary, it's gaining a huge advantage .

Those 21 cargoes (plus those in 2025) that ENI will not deliver to Pakistan at the (relatively low) 2017 prices, it is now free to take and resell on the global spot market at the (much higher) 2025-2027 price.

In a global market where LNG demand remains strong, especially in Asia and Europe, ENI has just transformed a low-margin delivery obligation into 21 very high-margin "golden cargoes." Pakistan is freeing itself of gas it doesn't know how to manage, and ENI is free to maximize its profit on that same gas. A win-win operation, although ENI, for obvious reasons of commercial diplomacy, has been careful not to comment.

At the same time, this extra gas represents an additional guarantee not only for Italy, but also for Europe, where some countries, such as Germany, have not yet completed their winter reserves .

And now the problem is called Qatar

The move with ENI was just the appetizer. The real headache for Islamabad is Qatar.

Pakistan has two much larger long-term contracts with Qatar, which cover the majority of its supplies (about 120 cargoes per year in total, compared to ENI's 12). And the government is also desperately trying to renegotiate with Qatar.

The options on the table are similar: postpone deliveries or find a way to resell excess cargo, taking advantage of contractual clauses. A Qatari technical delegation was in Karachi last week to discuss cargo scheduling.

But renegotiating with QatarEnergy isn't like renegotiating with ENI. Qatar dominates the LNG market, is less flexible, and holds an overwhelming bargaining position. Talks, sources say, are "underway" and "no decision has been reached." Translated from diplomatic parlance: it's complicated.

The Pakistan paradox holds a lesson for all energy planners. The green transition is disruptive not only for production, but also for the management of fossil fuel contracts. Signing 15-year commitments in such a rapidly changing world is a gamble. A gamble that this time Pakistan is paying for, and which ENI, thanks to the market's flexibility, is turning into an opportunity.

Questions and Answers

Why is Pakistan canceling gas cargoes if it is a developing country?

Pakistan is facing a gas surplus ("glut"). This is caused by two main factors: a sharp increase in renewable energy production (solar and hydroelectric), which has reduced the need for gas-fired power plants, and a simultaneous decline in industrial demand, likely due to an economic slowdown. With too much gas in the grid and no place to store it, it is forced to cancel future imports for which it had signed long-term contracts.

Does the cancellation of 21 LNG cargoes represent a loss for ENI?

No, on the contrary. ENI hasn't officially commented, but this cancellation is almost certainly a financial advantage. The contract with Pakistan was signed in 2017 at (presumably) much lower prices than current ones. Now ENI is free to take those 21 LNG cargoes, which it no longer has to deliver to Pakistan, and sell them on the global spot market at current prices, which are significantly higher. It turns a low-margin contract into a high-profit opportunity.

What is Pakistan trying to do with Qatar?

In addition to the contract with ENI, Pakistan has much larger supply contracts with Qatar. Given the structural nature of the gas glut, it is also seeking to renegotiate with Doha. Options under discussion include postponing deliveries (hoping for domestic demand to recover) or reselling LNG cargoes to other countries, using the clauses in existing contracts. However, negotiating with Qatar, the world's leading exporter, is considered much more complex than negotiating with ENI.

The article The Pakistani paradox: too much gas, 20 ENI shipments are cancelled and negotiations with Qatar resume, comes from Scenari Economici .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/il-paradosso-pakistano-troppo-gas-si-cancellano-20-carichi-di-eni-e-si-ridiscute-con-il-qatar/ on Tue, 04 Nov 2025 13:00:47 +0000.