Staff Report
ISLAMABAD: In a concerning development, Pakistan LNG Limited (PLL), a government subsidiary responsible for procuring liquefied natural gas (LNG) from the international market, has failed to secure any bids for six cargoes on a delivered-ex-ship (DES) basis.
The cargoes were intended for delivery to Port Qasim in Karachi during the months of October and December. Despite its efforts, PLL did not receive any offers within the specified tender window, which closed on June 20.
PLL had initially sought six cargoes, each containing 140,000 cubic meters of LNG, for the mentioned delivery period. The inability to secure the necessary supply raises concerns about potential disruptions in the country’s energy sector. To address the shortfall, PLL has already advertised a second tender seeking three cargoes for delivery in January and February, but the outcome remains uncertain.
As mandated by the Government of Pakistan, PLL plays a crucial role in managing the entire supply chain of LNG, from importation to end-user distribution. The country heavily relies on gas for power generation, making the procurement of spot cargoes essential. However, Pakistan has faced challenges in acquiring LNG due to elevated global prices following Russia’s invasion of Ukraine last year.
Pakistan imported 9 billion cubic meters (bcm) of LNG in the previous year, marking a significant decline of nearly 20% from the 11.2 bcm imported in 2021. The country currently holds two long-term supply deals with Qatar, one signed in 2016 for 3.75 million metric tons of LNG annually and another signed in 2021 for 3 million metric tons per year. Additionally, Pakistan has an annual portfolio contract with ENI for 0.75 million metric tons.
The failure to secure LNG cargoes in the latest tender highlights the urgent need to address the country’s energy supply challenges. With the impending closure of the second tender, stakeholders are closely monitoring the situation and its potential impact on Pakistan’s energy sector, which plays a critical role in the country’s economic stability and development.
