Lucky Group and QatarEnergy quit Port Qasim LNG terminal; PQA sets 30 November deadline on $2m fee
Energas blames Pakistan's energy policy changes and the lost tax holiday. The Port Qasim Authority says the $2 million concession fee will be forfeited.
Energas, the consortium of the Lucky Group and QatarEnergy, has dropped its plan to build an LNG terminal at Port Qasim, Karachi, blaming changes in Pakistan's energy policy, Dawn reported on Monday 26 October 2026. The Port Qasim Authority (PQA) has told the company its letter of intent will be cancelled, and its $2 million concession fee forfeited, unless it gives "unconditional acceptance" and an updated project status by 30 November 2026.
Why Energas walked away
Energas chairman Muhammad Ali Tabba called the policy changes a "clear frustration of purpose". The reasons the company gave, as reported by Dawn:
- Pakistan's Integrated Energy Study (final report, 28 March 2025) found no new LNG terminals were needed for the next five years.
- The five-year tax holiday for new LNG terminals under the 2011 LNG Policy was withdrawn in June 2021, which Energas linked to IMF conditions and said made the project "redundant and infructuous".
- Unresolved issues with the government and the PQA over pipeline capacity, gas transportation agreements, the tie-in area, an exemption from third-party access rules and income tax.
What Qatar had offered
According to informed sources quoted by Dawn, QatarEnergy had booked capacity at the terminal and offered extra LNG at about 10.2% of Brent, close to the price Pakistan State Oil pays under its second long-term Qatar contract.
The $2 million dispute
The PQA says the $2 million was an initial concession fee under its Project Guidelines 2019, not a refundable advance, and that surveys, approvals and financing were the developer's job. Energas has asked Prime Minister Shehbaz Sharif to refund it, saying it is not at fault under the contract.
Timeline
| Date | Event |
|---|---|
| May 2020 | Provisional letter of intent issued |
| June 2021 | Tax holiday for new terminals withdrawn |
| August 2022 | Policy changed so private terminals give part of their capacity to the government |
| 28 February 2026 | US-Israel strikes on Iran; Strait of Hormuz closed, Qatar's LNG output suspended |
| October 2026 | Energas abandons the project |
| 30 November 2026 | PQA deadline before the letter of intent is cancelled |
What it means for you
Pakistan now imports LNG through two terminals at Port Qasim, and gas for homes is rationed every winter. A third private terminal would have let more private buyers import LNG directly. With it gone, winter supply and prices remain set by government cargoes. Work out what your gas bill will look like with the gas bill calculator.
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