Lucky-QatarEnergy Consortium Drops Port Qasim LNG Terminal Plan

Energas, a consortium of Pakistan’s Lucky Group and QatarEnergy, has dropped its plan to build a liquefied natural gas (LNG) terminal at Port Qasim, blaming changes in the country’s energy policy and long-pending policy and fiscal issues with the government. The decision puts the proposed Port Qasim LNG terminal effectively on hold.

Energas chairman Muhammad Ali Tabba has written to Prime Minister Shehbaz Sharif asking for a refund of the $2 million concession fee the consortium paid to the Port Qasim Authority (PQA). The PQA has rejected the refund request and warned that it will cancel the project’s final letter of intent unless Energas gives its unconditional acceptance by November 30, 2026.

Why Energas Dropped the Port Qasim LNG Terminal

In its letter, the consortium pointed to two main problems.

• Change in energy needs: The government’s Integrated Energy Study of March 2025 concluded that Pakistan would not need any new LNG terminal for the next five years, removing the demand case for the project.
• Loss of tax incentive: When the provisional letter of intent was issued in May 2020, the LNG Policy 2011 offered terminal operators a five-year tax holiday from the start of commercial operations. That exemption was withdrawn for new terminals in June 2021 under IMF conditions, while the existing terminals continued to benefit from it.

Energas said these changes, along with issues that remained unresolved with the government and port authorities, made the project commercially unviable.

QatarEnergy’s Role in the Project

QatarEnergy had joined the project as a stakeholder and had committed to supply additional LNG at a price linked to around 10.2% of Brent crude to keep the terminal in use. Ahead of the prime minister’s visit to Qatar in August 2022, Pakistan had also changed its LNG policy to remove restrictions on new private terminals offering part of their capacity to the government, a step meant to support projects like this one.

How the Port Qasim LNG Terminal Exit Affects Pakistan

• Foreign investment: The exit of a Qatar-backed project is a setback for the government’s drive to attract Gulf investment, as investors watch how policy changes affect long-term projects.
• Energy supply: Pakistan currently depends on its two existing LNG terminals at Port Qasim. Without a third terminal, the country has less spare capacity if gas demand rises again.
• Policy certainty: The dispute over the $2 million fee and the withdrawn tax holiday highlights how sudden policy shifts can stall private infrastructure plans.

What Happens Next

The next key date is November 30, 2026. If Energas does not accept the PQA’s terms by then, the port authority says it will cancel the final letter of intent, and the consortium will lose the $2 million fee unless the prime minister’s office steps in. Any decision by the government on the refund request will show whether it wants to keep the door open for the investors to return.

Read More: Energy Crisis: Qatar Halts All LNG Supplies to Pakistan Amid Escalating Middle East War