KARACHI: Pakistan LNG Limited (PLL) has issued tender for the import of two LNG cargoes to be delivered on November 19-20 and November 26-27, 2021. This emergency tender came after ENI and Gunvor refused the make the deliveries in November under long-term contracts.
Pakistan has a five-year import deal with Gunvor and a 15-year agreement with ENI to buy LNG. Under the contracts, Pakistan LNG can impose a penalty of about 30% of the contractual price of a cargo on each company for cargo defaults.
Spot LNG prices LNG-AS rose to a record high of above $56 per million British thermal units (mmBtu) last month before pulling back to just above $30 per mmBtu, which is still over 400 per cent higher than the same time last year.
That works out to three times the price of oil-linked term cargoes, which are priced at above 11 per cent of Brent crude oil prices, or about $10 per mmBtu based on current oil prices.
To recall, the last tender issued by Pakistan LNG Limited (PLL) for 08 LNG cargoes for December and January received not one bid by the suppliers. PLL had invited bids for supply of eight cargoes of the liquefied natural gas (LNG) to be delivered in December 2021 and January 2022. The bids were to be opened on October 11, 2021, and there were no offers at all.