Pakistan again turns to spot LNG market, seeks bids for 2 cargoes
Why this matters: local context for readers following news across Pakistan and the region.
ISLAMABAD: State-run Pakistan LNG Limited (PLL) on Wednesday floated urgent tenders for the import of two liquefied natural gas (LNG) cargoes for delivery between May 12-14 and May 24-26 amid rising temperatures and power shortfall. The company set May 7 (Thursday) as the deadline for bids, which will be opened the same day, given the urgent need to meet the power demand expected to spike again as the cargo imported in the last week of April has been consumed. The tender comes after authorities’ expectations of the Middle East crisis easing and the reopening of the Strait of Hormuz did not materialise. Last month, PLL had rejected two bids for the same delivery period but accepted one cargo at $18.4 per million British thermal units (mmBtu). Qatar, a long-term LNG supplier to Pakistan, had been reluctant to dispatch LNG cargoes stranded in the Gulf amid the closure of the Strait of Hormuz. Earlier, three LNG cargoes from Qatar destined for Pakistan were turned back from the strait due to security reasons. Both tenders require 140,000 cubic metres of LNG to be delivered on an ex-ship (DES) basis. Each cargo of this capacity for Pakistan typically translates into around 100 million cubic feet per day (mmcfd) of gas supply. In April, the Oil and Gas Regulatory Authority (Ogra) had notified a massive 19–22 per cent increase in the price of regasified liquefied natural gas (RLNG) to $12.50–$14 per mmBtu for sale at the distribution stage by the two Sui gas companies for the month of March. The increase was mainly due to higher terminal charges amid lower import volumes and a minor rise in import prices, data from the authority showed. The basket RLNG price was based on only two cargoes in March, compared to eight cargoes each in February and March, due to a force majeure declared by Qatar. Both cargoes were imported under two LNG contracts between Pakistan State Oil and QatarGas at an average price of about $7.68 per mmBtu (DES), compared to $7.45 per mmBtu last month, b