Pakistan ramps up furnace oil use, delays nuclear maintenance amid LNG shortages

Pakistan is running its furnace oil-based power generation to full capacity and delaying nuclear plant maintenance, as it scrambles to manage electricity shortages caused by disruptions to liquefied natural gas (LNG) supplies amid the Iran war, the power minister said on Thursday.

The supply crunch comes as Qatar's force majeure stemming from the Iran war have disrupted LNG imports, forcing countries such as Pakistan to seek alternative fuels or expensive spot cargoes. Areas throughout Pakistan experienced load-shedding on Wednesday.

The country is facing a shortfall of around 3,400 megawatts due to reduced hydropower output, as rainfall and lower irrigation demand have limited water releases from reservoirs, Awais Leghari, power minister told a press conference.

There has also been a sharp drop in LNG-based generation, prompting load management of up to 6–7 hours in some areas, Leghari added.

Pakistan's LNG-fired plants, with about 6,000 MW capacity, are producing only around 500 MW due to gas shortages, while hydropower output has fallen to about 1,600 MW, roughly half of last April's level, he said.

To plug the gap, the country is arranging additional fuel supplies and has delayed nuclear plant maintenance to sustain generation, Leghari said.

Authorities are also running costlier furnace oil plants and seeking LNG supplies via government-to-government deals, including with Azerbaijan's SOCAR, Leghari said.

'TRYING TO AVOID STEEP PREMIUMS'

Petroleum Minister Ali Pervaiz Malik said on Wednesday Pakistan may tap spot LNG markets but will prioritise such deals to avoid steep premiums, with prices at $20–$30 per mmBtu amid the conflict.

Pakistan typically imports 8–10 LNG cargoes a month under long-term contracts, but had, in recent years, faced a supply glut and cancelled shipments as domestic generation and solar uptake reduced demand.

Pakistan had minimal reliance on furnace oil in April last year due to its high cost, instead generating about 3,000 MW from LNG and 3,200 MW from hydropower.

Demand has also fluctuated sharply, rising from about 9,000 MW earlier in April to 20,000 MW within days as temperatures climb.

Rooftop solar growth — estimated at 12–14 GW and possibly up to 18 GW — has cut daytime grid demand, shifting shortages to evening peaks when solar generation falls and LNG-fired plants are typically needed.

Despite the shortages, the minister said diversification into coal, renewables and nuclear power had helped cushion the impact of the crisis.

-Reporting by Ariba Shahid, writing by Shanima Aniyeri; Editing by YP Rajesh and Janane Venkatraman/Reuters