Pakistan to buy high-priced LNG again

The contract awarded to Pakistan LNG Limited (PLL) for May is very expensive for the country mainly due to supply chain disturbances on the international market following the war between Russia and Ukraine.

The company has chosen the lowest bid for LNG shipments. Out of seven, six contract awards for LNG shipments were received. The cargoes were urgently requested after already committed cargoes were cancelled.

The lowest contract price for cargo requested for delivery from May 1 to May 2 was received at $29.67 by Total Energies Gas and Power. The second bid for the same delivery period was received from Vitol Bahrein at $29.79 per mmbtu.

Pakistan, which has become increasingly dependent on LNG in recent years, due to the depletion of indigenous natural gas deposits, a separate bidding process was launched for six deliveries in May and June earlier this month.

Qatar Energy offered the lowest price for delivery from May 12 to 13 at $25.15 per mmbtu and for the delivery period from June 6 to 7 at $27.65 per mmbtu.

The CNG association and the general industry hoped to resume gas supply, which was suspended at the beginning of the month because of a shortage. “The government took a bold step and bought LNG from the international market in these challenging times to reduce gas shortages and secure power generation supplies specifically and other consumers,” All Pakistan CNG Association Chairman Ghiyas Paracha stated.

Gas demand increases during the winter season because people in the northern and Balochistan regions use gas geysers and heaters to heat themselves and their homes.