Bangladesh, Pakistan and India have been significantly affected by the changes to the LNG market in 2022.
“Europe is trying to grab every molecule of gas wherever it is available,” he said. “They are purchasing everything from current to future gas. And their purchasing power is much higher than that of developing countries. So obviously, countries like Bangladesh, India, and Pakistan have been hit very hard.”🚨🚦
One of the big problems countries such as Pakistan have faced in terms of LNG supply is the nature of the contracts they have signed with suppliers.
Pakistan has signed contracts with trading companies which may not necessarily produce the LNG themselves. The contracts often include break clauses, meaning the suppliers can sell the LNG to other markets if they wish at short notice. They must pay a penalty in that case.
However, soaring LNG prices elsewhere mean they can easily pay the penalty and still make substantial profits by selling in the more profitable market. 🚦