MediumVI Energy Politics & Supply Security26 October 2026, Monday

Energas walks away from the Port Qasim LNG terminal plan

Energas, the joint venture between Lucky Group and QatarEnergy, has abandoned its plan for an LNG terminal at Port Qasim. The port authority said it would cancel the final letter of intent unless an unconditional acceptance arrives by 30 November.

Location: KARACHI

Dawn reported on 26 October that the Energas chairman, Muhammad Ali Tabba, had written to Prime Minister Shehbaz Sharif asking for the return of a 2 million dollar concession fee. The Port Qasim Authority refused. It said the fee is not refundable under the 2019 Project Guidelines and may be forfeited. The same letter stated that studies, permits and financing are the developer's responsibility.

The company blames policy change. The Integrated Energy Study completed in March 2025 concluded that no new LNG terminal would be needed for five years. The five-year tax exemption granted to new terminals was withdrawn in June 2021 on the grounds of IMF conditions. Pipeline capacity, gas transport agreements and an exemption from third-party access are listed among the unresolved items.

QatarEnergy is reported to have committed to supplying additional LNG at a price of about 10.2% of Brent to keep the terminal full. The threshold is 30 November: if no unconditional acceptance arrives by then, the letter of intent lapses and the 2 million dollars is forfeited. The project's first provisional letter of intent was issued in May 2020, so six years of process never turned into an investment decision.

Talay assessment

Bottom line

The withdrawal shows that the real constraint on private capital in Pakistan's gas infrastructure is regulation rather than construction. Removing the tax exemption, an official energy study that saw no need for a new terminal, and the unresolved question of third-party access all point the same way. With QatarEnergy's Brent-linked supply commitment still on the table, the collapse of the project says predictability was not enough even for a self-financing investor. The 30 November threshold will set a precedent well beyond 2 million dollars.

Likely effects

Gas import capacityNegative1–6 months
If the third terminal falls away, Pakistan stays tied to the capacity of its two existing terminals and loses flexibility at winter peaks.
Investor confidenceNegative6 months+
A six-year permitting process that ends in forfeiture raises the risk premium on private capital in energy infrastructure.
Relations with QatarUncertain1–6 months
As the state company leaves the partnership, multi-year supply contracts continue on a separate channel and the relationship tilts towards supply.

Possibilities, ranked

1
The project lapses60%
Energas gives no unconditional acceptance, the letter of intent is cancelled on 30 November and the concession fee is forfeited.
Watch: A cancellation notice from the Port Qasim Authority after 30 November
2
A late compromise25%
The government concedes on third-party access or on the tax item and the deadline is extended.
Watch: The Petroleum Ministry's decision on the third-party access exemption
3
A new tender opens15%
A fresh process is launched for the site with a different developer and the timetable slips into 2027.
Watch: A new terminal tender notice from the Port Qasim Authority

Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.

Market reaction

Indicators affected

Concession fee▼ 2 million dollars
Unconditional acceptance deadline▼ 30 November
Additional LNG price▲ ≈10.2% of Brent

Bottom line

Likely effects

Possibilities, ranked

Sources