The government has procured four liquefied natural gas (LNG) cargoes at the highest-ever rates at $15.19-$15.49 per mmBtu for the month of September. The state-owned Pakistan LNG Limited (PLL) first cancelled the tender of eight cargoes for September and October, arguing that the rates were higher at $13.78 per mmBtu, but now it has procured four cargoes at the highest-ever rates.
The PLL went for a closed tender for the month of September and managed to get the rates for four LNG cargoes at over $15 per mmBtu, which are the highest-ever rates since it started buying LNG in 2015. The government will procure three LNG cargoes from Gunvor and one from PetroChina.
The government is under tremendous pressure and compelled to buy the cargoes at the highest prices to avoid power load shedding in September. Gunvor will provide PLL the first cargo during September 6-7 at the rate of $15.397 per mmBtu, second cargo on September 12-13 at the price of $15.497 per mmBtu and the third one on September 17-18 at the rate of $15.397 per mmBtu. PetroChina will provide LNG cargo on September 27-28 at $15.199 per mmBtu.
Now the PLL is also going to float a tender for the months of October and November under the Public Procurement Regulatory Authority (PPRA) rules fearing that it will get bids close to $20 per mmBtu, keeping in view the prices’ trend in the international market as under the PPRA rules for holding up the rate for 15 days, the LNG suppliers also include the premium.
The government says that at present there is an LNG prices crunch in the international market and it is difficult to predict the future trend of the LNG prices. The PLL earlier got bids in the range of $10.2937 per mmBtu to $11.7747 per mmBtu for July cargoes, and $10.51 to $10.8312 per mmBtu for cargoes to be delivered in August.