Pakistan LNG Limited has not received any bids for a tender seeking liquified natural gas cargoes, according to a document posted on its website.
The oil company had advertised a tender seeking eight liquefied natural gas cargoes for delivery between December and January, with the deadline of 11 October. The cargoes were intended to meet the demands for gas in Punjab and Khyber Pakhtunkhwa. However, the tender’s 15-day price validity period was not feasible for traders amid such a volatile market and Pakistan LNG Limited (PLL) did not receive any offers.
The global LNG shortage is so bad that Pakistan’s latest purchase tender received ZERO offers 🇵🇰 🚢 0️⃣
Pakistan closed a tender yesterday seeking LNG cargoes for Dec.-Jan.
There is a growing risk that LNG buyers dependent on the spot market will be caught short this winter pic.twitter.com/t8w2byQLXz
— Stephen Stapczynski (@SStapczynski) October 12, 2021
Bloomberg reporter, Stephen Stapczynski, tweeted that LNG buyers dependent on the spot market may struggle to secure bids this winter.
The price of liquefied natural gas (LNG) around the world is rising rapidly amid increasing demands for energy and low inventories.
The Platts benchmark Japan Korea Marker for November hit an all-time high of $56.326 per mmBtu. This is significantly higher than than the prior record of $34.52 per mmBtu that had been set earlier in October. With prices so high, Pakistan has been struggling to secure bids for tenders seeking deliveries for LNG cargoes. This has led oil companies to cancel tenders when they receive bids that are too expensive or to purchase cargoes at record-high prices.
The government may restrict the import of fuel to avoid exorbitant prices and shift toward using furnace oil and coal in power production. These two commodities are currently more affordable than LNG.
“Given the expectation that Platts West India Marker will average above $20.00/MMBtu this winter, it’s likely that Pakistan will look for alternatives, including fuel oil, to burn in their electricity stack,” said Jeffrey Moore, the Manager for Asia LNG analytics at S&P Global Platts.
S&P Global Platts expects that Pakistan’s LNG imports will decline by 10 percent winter-on-winter.
A senior official told a national daily that Pakistan State Oil and the Power division are being guided towards arranging alternate fuels such as furnace oil for power generation.
“We may see Pakistan importing up to 500,000 mt of fuel oil in the current financial year,” said Shahab Farooq, the Director of Research at Next Capital Securities.
