KARACHI: Pakistan LNG Limited (PLL) will buy eight spot LNG cargoes, and has invited bids for supply of eight LNG shipments to be delivered in December 2021 and January 2022. The bids will be opened on October 11, 2021.
According to the tender document, four spot LNG cargoes up to 140,000 cubic meters in capacity each are spread over four windows in December 2021, i.e. December 6-7, December 10-11, December 15-16 and December 26-27, 2021.
The remaining four spot LNG cargoes are scheduled for delivery on January 14-15, January 19-20, January 24-25 and January 29-30, 2022. All cargoes will be supplied on a Delivered Ex-Ship (DES) basis to the facility located in Port Qasim, Karachi.
To recall, Pakistan LNG Limited (PLL) got 12 bids for five cargoes for October-November 2021 in the range from $19.8477 up to $22.4866 per mmbtu in response to the emergency tender.
The PLL had earlier issued a tender on July 24, seeking bids for seven cargoes for October-November and it opened the bids on August 24 for seven cargoes at price range from $17.1447 to up to $25/mmbtu.
But the company didn’t take the decision because it could hold the bids’ validity for 15 days after opening date of August 24, 2021. It went for the emergency tender with the aim to get cheaper prices and got the bids, which were also on the higher side.
Pakistan has become one of the top emerging markets for the super-chilled fuel in recent years as domestic gas production has plateaued. Pakistan, which imported its first cargo five years ago, currently has two LNG terminals. It’s running the two terminals at capacity to meet peak winter demand, with 12 cargoes secured for December and 11 for January.
Two more LNG terminals, Energas and Mitsubishi’s Tabeer Energy, are expected to start in the next few years.
Consumer addition is increasing the gap between demand and supplies, day by day. Especially in winter, the gas demand further increases and as a result the government is being to curtail supplies to various sectors.
The power sector accounts for one-third of Pakistan’s natural gas consumption. The residential and industrial sectors also account for a large portion of gas demand. In the period of 2005-2014, natural gas consumption was mostly flat, largely due to gas supply constraints. Since LNG imports began in 2015, gas demand has increased.
Government has mandated the state-owned companies i.e. Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL) to import LNG on behalf of the Government of Pakistan. PSO has signed a Government to Government contract with Qatar Gas for a period of 15 years whereas PLL has shorter-term LNG contracts with Gunvor and Shell.