By Staff Reporter
ISLAMABAD: Pakistan failed to secure any spot liquefied natural gas (LNG) cargoes for October-to-December delivery, officials said on Tuesday, as suppliers shunned the country’s tenders due to banking issues.
Pakistan LNG Ltd (PLL), the state-owned company that procures LNG for the country, did not receive any offers for its tender seeking six cargoes for the fourth quarter, which closed on Tuesday.
They said several overseas banks were not accepting letters of credit from Pakistani counterparts to finance LNG purchases, making suppliers reluctant to bid for the tenders.
Letters of credit are a guarantee by a lender to pay a seller if the buyer fails to do so.
PLL did not immediately respond to a request for comment.
The company had issued tender seeking three cargoes for January and February delivery, which closes on July 14, according to its website.
Pakistan imported 9 billion cubic metres (bcm) of LNG last year, down nearly 20 percent from 11.2 bcm in 2021.
The South Asian nation has two long-term supply contracts with Qatar, one for 3.75 million metric tons of LNG a year and another for 3 million metric tons a year. It also has an annual portfolio deal with Italy’s ENI for 0.75 million metric tons a year.
Pakistan is facing a weakening currency, political turmoil and an increasing risk of a sovereign default. The International Monetary Fund recently criticized the government’s budget as insufficient to meet the goals of its bailout program.
The failure to buy spot LNG cargoes will worsen energy shortages in Pakistan, which relies heavily on gas imports to meet its power demand.
The country was hit hard by the global energy crisis last year due to its high dependence on imports and several of its tenders also failed to attract offers from suppliers.
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