Pakistan is continuing its spot buying of Liquified Natural Gas (LNG) from the international markets as the state-owned Pakistan LNG Limited (PLL) is reportedly seeking cargoes, each of 140,000 cubic meters in two delivery windows.
According to the PLL, the first cargo is expected to arrive in mid-February, and the second shipping is expected to arrive between 23-24th February. The government has invited bids for two more cargoes for February. This reportedly got approved just a month after the government issued tenders of six LNG cargoes for January 2021.
Pakistan has resumed spot buying of LNG from the international suppliers after a six-month pause, as energy demand posted a v-shaped recovery with the lifting of the COVID-19 lockdown restrictions from July. State-run PLL had invited bids for the supply of three LNG cargoes, 140,000 cubic meters each, to be delivered in August and September.
December and January usually see immense demand for gas, but this year, the demand-supply shortfall is expected to be larger. According to sources close to the PLL, this comes on the back of higher consumption and diminishing indigenous supply.
Qatar maintains a long-term agreement with Pakistan, but reportedly it has been active on the spot market. LNG contributes 22 percent to the country’s energy mix, while its share in energy imports stands at 24 percent.
The energy ministry said the government would sign LNG import contracts only when there is sufficient demand from the buyers in the country, in a bid to avoid any other circular debt crisis. It needs to sell out 800 million metric cubic feet per day (mmcfd) every month before “We can commit to more long-term contracts,” the petroleum division said in a statement.
The government has permitted the private sector to buy imported LNG, but without financial commitment on the part of the government. Two private companies intend to build some traction with this development, and one is likely to break ground within two months, the ministry said in a statement.