The Board of Pakistan LNG Limited (PLL) convened on Sunday to discuss whether to purchase an additional LNG cargo from the State Oil Company of the Republic of Azerbaijan (SOCAR) for January 2025 but couldn’t decide.
The PLL board decided not to proceed with any decision due to uncertainties in the demand forecasts provided by gas companies.
SNGPL recently requested the government import one more cargo for January 2025. However, due to the high demand during the winter season, the spot price of LNG has surged above $15 per MMBTU.
Pakistan has already secured 12 LNG cargoes under long-term agreements (10 from Qatar and two from ENI). Additionally, PLL had rescheduled one of its cargoes from September to December 2024. The cost of LNG under these agreements is around $10 per MMBTU, lower than the current spot price. PLL isn’t comfortable importing expensive spot LNG on SNGPL request.
PLL and SOCAR signed an agreement in July 2023 to purchase one distressed LNG cargo per month. SOCAR offered one cent lower than the lowest bid which would anger bidders and force them to threaten to boycott future LNG auctions. As a result, Pakistan now lacks a clear mechanism for price discovery, which makes it difficult for PLL to decide to purchase LNG from SOCAR on short notice.