Dec, Jan: Global Traders Show no Interest in LNG Supply

Global RLNG traders have shown no interest in supply of liquefied natural gas (LNG) for December and January 2022 due to delay in inviting tenders, Ghiyas Abdullah Paracha, CEO of Universal Gas Distribution Company (UGDC) and Central leader of All Pakistan Compressed Natural Gas Association (APCNGA) told Business Recorder.

Pakistan LNG Ltd (PLL) did not receive any offers in a tender seeking eight spot cargoes for delivery over December to January. Pakistan LNG had issued the latest buy tender in September with offers due by October 11 and to remain valid until October 26.

Pakistan State Oil (PSO) and PLL apprised the Energy Minister, Hammad Azhar, on Tuesday that they had 10 LNG cargoes each for November and December against 11 LNG cargoes last year during this period. The energy minister held a meeting on Tuesday to review the gas situation in the winter season.

They informed in the meeting that the LNG traders had not shown interest to make a bid for LNG cargoes due to higher prices in the global market. Under gas load management plan, the energy minister reiterated to provide uninterrupted gas supply to export, power and fertiliser sectors along with domestic consumers.

Pakistan meets 70 percent requirement of gas from its local gas at average price of around $4 per mmbtu. Due to lack of LNG availability, Pakistan will switch to furnace oil imports to meet requirement of power sector. The minister emphasised utilising the unutilised capacity of second existing LNG terminals.

Since July 2020, Paracha said that government of the PTI had allowed the private sector to import LNG but they had not been able to bring a single ship of LNG due to monopoly of state companies. The PLL has been importing LNG to make onward supply to SNGPL to feed the consumers. However, it had not been able to import LNG on pretext of higher LNG prices in global market.

Shortages on the systems of both state-owned Sui companies, the Sui Northern Gas Pipeline Limited (SNGPL) and the Sui Southern Gas Company (SSGC) is increasing as both the SNGPL and the SSGCL has a deficit of 244million cubic feet per day (MMCFD), the sources said.

Both gas companies on Friday had announced suspension of gas supplies to all the CNG stations, cement, and non-export general industries, along with captive power across their franchised areas including, Sindh, Balochistan, Punjab, and Khyber-Pakhtunkhwa (KP). The SSGCL suspended supplies for 72 hours and the SNGPL halted supply for 48 hours.

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