Pakistan seeks six-year LNG supply contract amid energy crisis

August 7 (ANI): Amid the severe energy crisis,Pakistan sought a six-year Liquefied Natural Gas (LNG) supply contractfrom international trading companies, by issuing a two-part tender seeking bid prices.

Pakistan is heading towards a severe energy crisis in the coming monthswithout the proper LNG supply required to generate electricity, fuelindustries, and household consumption.
Last month, the 5-year LNG term agreement with GUNVOR with PakistanLNG Limited (/topic/pakistan-lng-limited) (PLL) expired. Now thecountry’s fully-owned company released the tender for a termagreement for six years.

The News International reported that bids are invited from internationalLNG suppliers for term cargoes on a delivered ex-Ship (DES) basis at PortQasim, Karachi.
As per the publication, if Pakistan gets the price bid, it will purchase 72LNG cargoes in six years, which means one cargo having an LNG quantityof 140,000m3 every month.
The ongoing Russia-Ukraine war, emergency gas purchases by Europeancountries and the continuing disruption in the global energy suppliesbecause of the last two COVID-19 pandemic years have increased LNGprices significantly, thus making it difficult for a financially doomedcountry like Pakistan to purchase gas cargoes at affordable rates.
Citing a top official at the Energy Ministry, PLL has issued a two-parttender, as per The News International.
Under the first part of the tender, bids are invited for only one year –2023 starting from December 2022 to December 2023 under which 12LNG cargoes will be delivered to Pakistan, one cargo a month.
Under part two, Pakistan will seek 60 LNG cargoes for 5 years startingfrom January 2024 to December 2028 — one cargo every month, TheNews International reported.

At present, Pakistan is relying on LNG cargoes under long-termsagreements. It is getting 6 cargoes per month from Qatar under a 15-yearagreement at 13.37 per cent of the Brent, 2 cargoes again from Qatarunder a 10-year contract at 10.2 per cent of the Brent, and one cargounder a 15-year agreement from ENI at 12.14 of the Brent.

Pakistan is perhaps the worst hit by the ongoing global LNG supplycrunch. Consequently, the Shehbaz Sharif-led government has limited options toaddress the issue, which include buying gas at a high rate or in thesports market; maximising electricity generation from other fuels orfacing more load shedding in the coming months. Several cities inPakistan, including Lahore and Karachi, are facing up to 10-18 hours ofload shedding per day.

Related posts