Energas has pulled out of its plan to construct a liquefied natural gas terminal at Port Qasim, citing shifts in Pakistan’s energy policy and persistent fiscal hurdles. The Port Qasim Authority warned the company that it will cancel the project’s final letter of intent unless Energas provides unconditional acceptance by 30 November 2026.
Muhammad Ali Tabba, who wrote to Prime Minister Shehbaz Sharif seeking a $2 million refund, explained that the project's viability was impeded by unresolved matters with the government and other authorities. Tabba stated, "Energas’s inability to proceed with the project is attributable to two critical factors: firstly, a fundamental change in national energy policy and requirements, resulting in a clear frustration of purpose; and secondly, the persistent and longstanding unresolved policy and fiscal matters with the government, PQA and other government bodies/authorities, which have continuously impeded the viability."
The Port Qasim Authority rejected the refund request, asserting that the $2 million was a concession fee rather than a refundable advance. Under paragraph 27 of the final letter of intent, the company faces the forfeiture of that $2 million fee if it fails to meet the deadline.
The Port Qasim Authority maintained that the developers were responsible for financing, design, construction, and conducting all necessary surveys and environmental studies. A five-year tax holiday for new terminals, originally provided under the LNG Policy 2011, was withdrawn in June 2021 due to International Monetary Fund conditions.
An Integrated Energy Study from March 2025 indicated that no new LNG terminals were required for the next five years. Qatar Energy had previously committed to supplying extra LNG at approximately 10.2 percent of Brent to ensure the terminal reached full capacity.
