LNG in the age of outrage

In the latest debate over Pakistan’s energy costs, a single number is being used to fuel public outrage: the daily payment made to the country’s LNG import terminals. It is often described as “payment for nothing.” In fact, it is payment for readiness.

An LNG terminal is not a gas producer or supplier. It is infrastructure. Its job is to remain operational and ready—every hour of every day—so that when a ship arrives, the cargo can be converted back into gas and supplied to the national grid. Think of a fire station. The municipality does not stop paying for trucks, equipment, or firefighters because there wasn’t a fire yesterday. It pays for readiness. The same principle applies here. A terminal that is available and ready is, in fact, performing its function—whether one cargo arrives or more.

The debate turns on a basic distinction that is being overlooked. There are the gas supply contracts, which determine when and how much gas arrives. And there are the terminals, which ensure that when gas does arrive, there is somewhere for it to........

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