LNG demand in Pakistan, China and India expected to rebound after US‑Iran war eases
Industry executives say Asian LNG demand, including Pakistan’s, will recover once Middle‑East supply disruptions end and spot prices normalise.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Positive · Buy bias
Power and Oil & Gas sectors, especially Pakistan LNG (PPL), likely benefit from lower LNG prices → Buy bias.
Sectors & Direction
Desk read
Desk call: Buy bias · Positively affected
- PowerPositively affected
- Oil & GasPositively affected
Companies
Mentions in This Briefing
Sectors: Power, Oil & Gas — Positive · Buy bias. PSX tickers: PPL, KEL. Power and Oil & Gas sectors, especially Pakistan LNG (PPL), likely benefit from lower LNG prices → Buy bias.
Full Story
Open on Business Recorder## Background
The ongoing US‑Iran conflict has choked LNG flows from Qatar and the United Arab Emirates through the Strait of Hormuz, a chokepoint that previously carried about 20% of global LNG shipments. The resulting supply shortfall has pushed Asian spot LNG prices to roughly $30 per MMBtu, far above the pre‑war $10 level.
## Impact on Regional Demand
Executives at major gas importers – GAIL (India), PetroChina (China) and Pakistan LNG (Pakistan) – told Reuters at the Gastech conference in Bangkok that the price spike has forced many industrial users to switch to coal or oil. However, they expect demand to bounce back once alternative supplies materialise and prices fall to a more affordable range.
- India: GAIL Chairman Deepak Gupta highlighted that price‑sensitive sectors have curtailed gas use, but the company is now sourcing cargoes from other regions and aims to restore gas consumption to 90‑95% of pre‑war levels. - China: PetroChina International CEO Luo Yizhou said gas‑fired power plants will increase LNG intake once prices return to $7‑$9 per MMBtu, supported by extensive new import terminals on the east coast. - Pakistan: Pakistan LNG CEO Masood Nabi indicated that additional volumes at reasonable prices would revive domestic demand, especially for power generation and industrial users.
## Outlook
Industry leaders, including Shell’s integrated gas head Cederic Cremers, estimate that the Middle East has already lost about 36 million tonnes of LNG this year. They anticipate 150‑200 million tonnes of new LNG capacity coming online over the next four to five years, which should stabilise the market and bring prices down.
## Implications for Pakistan
A fall in LNG prices would ease the cost pressure on Pakistan’s power sector, where gas‑fired plants compete with imported coal and diesel. Lower fuel costs could improve the financial outlook of power generators and the national gas importer Pakistan LNG (PPL). Investors should watch for any new supply contracts or cargo arrivals that signal a price correction.
## Global Perspective
ExxonMobil, GAIL and PetroChina all expect a short‑term dip in demand to be followed by a medium‑ to long‑term recovery as supply normalises. The broader sentiment remains bullish for LNG demand through 2050, according to NLNG’s vice‑president for global LNG marketing.
## Bottom Line
The consensus among market participants is that the current LNG price shock is temporary. Once the Strait of Hormuz re‑opens and alternative cargoes flow, Asian demand – including Pakistan’s – should rebound, supporting related equities on the PSX.