Pakistan again seeks LNG cargo after two failed attempts amid high prices

Pakistan has begun a new bidding round for the purchase of an LNG cargo for September after two failed attempts due to Islamabad being spooked by sky-high prices, domestic media Dunya News reported on September 6.

State-run Pakistan LNG Limited (PLL) has begun a new round of tenders with international LNG traders for delivery of a cargo between September 12 and 16. The deadline to make an offer is September 8.

Islamabad is desperate to procure an LNG cargo having failed in two previous attempts. Prices for LNG cargoes on the spot market have soared with Iran closing to traffic the Strait of Hormuz, which serves as a key chokepoint for LNG trade with about one-fifth of global supply passing through.

PLL’s most recent attempt to buy an emergency cargo fell through after traders sought a price that was three times higher than pre-war prices.

BP Singapore provided the lone offer at $26.969 per million British thermal units for a 140,000 cubic metre cargo to be delivered to Port Qasim in Karachi.

Had PLL accepted the bid, the cargo would have provided enough LNG to cover about seven days of national power-sector demand, or as many as 10 days if supplemented with domestic natural gas. 

LNG prices on the spot market have soared as Europe has begun scooping up cargoes ahead of the winter season. With Europe’s gas storage levels having plummeted from high prices, government officials in the bloc have now begun ramping up purchases of cargoes, particularly from the world’s biggest exporter, the US.

In August, Europe bought 5.84mn metric tonnes, representing 55% of total exports and 1mn metric tonnes more than in July.

Meanwhile in Asia, a heatwave in South Korea and Japan in July also led to major demand for cargoes of the super-chilled fuel.

Pakistan relies heavily on imports of the super-chilled fuel, particularly Qatari supply, which has been under force majeure since Iranian attacks on two QatarEnergy facilities in March.

In late July, Qatar, which is the world’s second largest exporter of LNG, extended force majeure through to mid-October on deliveries of LNG cargoes to some of its Asian buyers.