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Pakistan to buy expensive LNG again



ISLAMABAD:

The tender awarded to Pakistan LNG Limited (PLL) for the month of May is quite costly for the country mainly owing to supply-chain disruptions in the international market on the back of Russia-Ukraine war.

The firm selected the lowest bid for liquefied natural gas (LNG) cargoes. Out of seven, six contract prices for LNG cargoes were received. The cargoes were sought on an urgent basis after earlier committed cargoes were cancelled.

The lowest contract price for a cargo requested for May 1-2 delivery received at $29.67 per mmbtu from Total Energies Gas and Power. The second bid for the same delivery window was received from Vitol Bahrain at $29.79 per mmbtu.

Pakistan, which has increased its dependence on LNG in recent years, due to depleting indigenous natural gas deposits, issued a separate tender for six deliveries in May and June earlier this month.

Qatar Energy quoted the lowest bid for May 12-13 delivery at $25.15 per mmbtu and for the June 6-7 delivery window at $27.65 per mmbtu.

Total Energies Gas and Power again quoted the lowest bid for May 17-18, May 27-28 and June 16-17 deliveries at $31.77, $26.87 and $29.04 per mmbtu, respectively. There was no bid for the June 1-2 delivery window so far, industry sources said. The final decision on acceptance or rejection will be taken in a board meeting of PLL.

The CNG association and general industry hoped to resume gas supply which was suspended earlier this month due to shortage. “The government has taken a bold step and bought the LNG from the International market in this difficult time for reducing gas shortages and ensuring supply to power plants specifically and other consumers,” All Pakistan CNG Association Chairman Ghiyas Paracha stated.

The gas demand rises in the winter season because people in northern areas and Balochistan use gas geysers and heaters to keep themselves and their homes warm.

Published in The Express Tribune, April 22nd, 2022.

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