By Staff Reporter
ISLAMABAD: Pakistan has booked a liquefied natural gas cargo from France’s TotalEnergies SE at $18.40 per million British thermal units, a purchase intended to plug a looming supply shortfall for roughly a month, a petroleum ministry official said Monday.
The deal comes as global oil and gas shipping has been disrupted since last month, when the United States and Israel launched a war on Iran. That conflict has slowed tanker traffic through the Strait of Hormuz, a critical chokepoint for energy exports from the Middle East. State-owned Pakistan LNG Ltd. issued the tender on April 24 and received four bids, marking the country’s return to the spot market for the first time in more than two years. Islamabad has received no LNG shipments since Feb. 28, when the conflict began.
The cargo is scheduled to arrive between April 27 and 30. It is expected to deliver about 100 million cubic feet a day for roughly a month, offering limited breathing room to an overstretched power system that has already seen outages of up to seven hours. TotalEnergies initially offered $18.88 per mmBtu for the late-April delivery window but revised its bid downward to win the contract, the petroleum ministry official, who asked not to be identified, told Arab News.
Pakistan requires at least 400 mmcfd of LNG per month, according to officials. Even though cheaper offers were available for May deliveries, the government chose to take only one cargo to limit its exposure to volatile spot prices.
Documents show Vitol Bahrain offered $18.54 per mmBtu for May 1-7 delivery, while OQ Trading quoted $17.997 per mmBtu for May 8-14. Both bids were passed over. Officials in the petroleum and power divisions said the additional supply should help ease power outages in the short term. “We hope the loadshedding will ease once the cargo arrives at the LNG terminal,” a power division official said.
The purchase reflects a sharp shift from last year’s relative surplus to a tightening supply situation, driven by rising electricity demand and constrained imports. Qatar, Pakistan’s biggest LNG supplier, provided most of the 6.64 million metric tons the country imported in the prior year and itself relies heavily on shipments routed through the Strait of Hormuz. Iran’s blockade of the waterway, which handled about 20% of global LNG flows before the war, pushed Asian spot prices to three-year highs. Prices have since pulled back but were last quoted at $16.05 per mmBtu — still a 54% increase from levels on Feb. 23. Officials said buying just one cargo is unlikely to have a material impact on fuel costs or consumer electricity tariffs. It will, however, provide immediate relief to the power sector as Pakistan navigates the fallout from the conflict.
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