Energas, a consortium involving Lucky Group and Qatar Energy, has withdrawn from its plan to build an LNG terminal at Port Qasim, citing changes in Pakistan’s energy policy and unresolved tax and regulatory issues.

The Port Qasim Authority (PQA) has warned the company that it will cancel the project’s final letter of intent (LOI) unless Energas gives unconditional acceptance by November 30, 2026. The company also risks losing the $2 million concession fee it has already paid.

Energas Chairman Muhammad Ali Tabba has asked Prime Minister Shehbaz Sharif to order a refund of the fee.

Why Energas Abandoned the Project

In a letter to the prime minister, Tabba said Energas had launched the project using its own funds and in good faith to meet Pakistan’s energy needs at the time. He argued that the country’s requirements and energy policy have since changed.

He cited the government’s Integrated Energy Study issued in March 2025, which found that Pakistan would not need new LNG terminals for the next five years.

Tabba also pointed to the withdrawal of a five-year tax holiday for new LNG terminals in June 2021 under conditions linked to the International Monetary Fund (IMF).

Other unresolved issues included pipeline capacity, gas transportation agreements and exemptions for third-party access. These hurdles remained despite earlier government efforts to facilitate the investment.

PQA Rejects Refund Request

The PQA has rejected Energas’s request to recover the $2 million fee, arguing that it was a concession fee rather than a refundable advance.

The authority said the 2019 Project Guidelines allow the amount to be forfeited. It also maintained that obtaining approvals, conducting studies and arranging financing were the developer’s responsibilities.

Qatar Energy had joined the project as a stakeholder and committed to supplying additional LNG at a price linked to around 10.2 percent of Brent crude prices, with the aim of keeping the terminal fully utilized.