Another brewing LNG crisis is most likely to hit the country again in September and October, as the government has refused to purchase 8 spot LNG cargoes for these months since the gas was offered at higher cost in range of $13.787-$16.0 per MMBTU (per million British thermal units). The Pakistan LNG Limited (PLL) — 100 percent state owned company, had floated the tender for 8 LNG spot cargoes (4 for September and 4 for October) but because of the higher than expected rates, the government cancelled them by rejecting to buy LNG at high sky spot prices.
However, PLL has not uploaded the details of the bids it received on its official web site, raising several eyebrows. The top sources in the Petroleum Division feared that the country could suffer from another gas crisis due to shortage in the aftermath of rejection of higher bids for spot cargoes. Earlier this week, a gas-cum-electricity crisis had hit the country because of dry docking of FSRU at Engro LNG Terminal, Annual Turn Around of a gas field in Sindh and low hydel generation from Tarbela Dam.
According to Petroleum Division officials, the global LNG market right now is too bullish driving the LNG prices to the higher side. However, the government, he said, will continue to monitor the market trends and if the prices start tumbling the PLL will retenderLNG cargoes for September and October.
When asked as to why PLL has not uploaded the details of bids’ on its website, he said there was no need to upload that as it had cancelled the tender due to higher bid price. Under PPRA, it is mandatory to upload details when a tender is issued and bids are accepted. He said no LNG importing country uploads the bids’ details on website even if the prices are accepted because they do not want to embarrass the LNG suppliers who also supply the gas to other countries.
The PLL earlier got the bids in range of $10.2937 per MMBTU to $11.7747 per MMBTU for July cargoes, and $10.51 to $10.8312 for cargoes to be delivered in August.
In case there is no respite in LNG prices in the international market, he said then the government will be left with no option but to procure more furnace oil and diesel to run power plants to generate the costly electricity to scale down the power crisis likely to emerge in September and October.
Four LNG trading companies had offered consignments for 8 time slots for September and October 2021. BB Energy submitted the highest bid price of $16 per for its LNG cargo for delivery in Pakistan on October 21-22. Gunvor also offered two cargoes at the higher price of $15.60 per MMBTU, for September 6-7 and another for September 10-11.