By Staff Reporter
ISLAMABAD: Pakistan is back in the market for liquefied natural gas (LNG) after a year-long hiatus, as it tries to secure supplies for the winter season amid a global gas crunch.
The state-owned Pakistan LNG Limited (PLL) issued a tender on Wednesday for two spot cargoes of 140,000 cubic meters each, to be delivered in December at Port Qasim in Karachi, according to the tender document. The tender closes on October 4 and is valid until October 6.
The move comes after Pakistan failed to buy any LNG from the spot market since September 2022, when Russia’s invasion of Ukraine triggered a surge in gas prices and a shortage of cargoes.
Pakistan, which relies on natural gas for more than a third of its power generation, faced electricity cuts as domestic gas production declined and LNG imports dropped.
Pakistan’s LNG imports fell by 18 percent in the last fiscal year that ended in June. The country imported 8.7 million tons of LNG in the period, down from 10.6 million tons a year earlier.
The country’s LNG import terminals have been operating below capacity for months, as PLL struggled to find affordable cargoes in a tight market.
The company canceled several tenders and rejected bids that were deemed too expensive. In July, PLL received only one offer for a winter cargo at a premium of 30 percent to the market price, which it declined.
Pakistan’s LNG procurement has also been hampered by its low credit rating and foreign exchange crisis, which have increased the financing costs and payment risks for sellers.
The country currently has access to LNG at approximately $11-$12 per mmbtu through its long-term contracts, which include agreements with Qatar Energy, Qatargas II T1, and a recent agreement with Azerbaijan.
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