Pakistan is struggling again to procure Liquefied Natural Gas (LNG) ahead of winter as the only bid on the tender is expensive for both the government and the local consumers.
Pakistan LNG Limited (PLL) sought bids through an international tender on June 13 for procuring three LNG cargoes in the first and last week of January 2024 and the fourth week of February 2024 and the bidding deadline was set at noon on 14 July. But only one bid came, from Trafigura Pte Ltd at $23.47 per mmBtu for January and $22.47 per mmBtu for February which is 26 to 29 percent higher than prevalent LNG Spot market prices, reported Dawn.
There is hope that it will make Azerbaijan’s state-run Socar Trading give an offer for cheaper cargo, it will also put a question on the G2G agreement with Socar. This is because the tender has brought price discovery from comparable spot market bids to determine the reasonability of the bilateral price.
PLL has technically declared that both bids are qualified and since no other bids have been received, the decision will be made by the PLL board of directors. Pakistan decided to re-enter the LNG market last month and issued two tenders on June 13, first for six cargoes for October and December against which no bid was received.
PLL is struggling to receive offers for cheaper cargo despite the fact that supplies have increased in the spot market and prices have dropped significantly. This is mostly due to the country’s crumbling credit rating and lowered foreign reserves, even though it used to import three cargoes a month to fulfill the national demand.
