- Trafigura bids received for January and February deliveries
ISLAMABAD: Pakistan has received an offer for supply of liquefied natural gas (LNG) for the first time in over a year, potentially reversing a trend of failed attempts to procure fuel.
According to sources, commodity trader Trafigura Pte Ltd has offered two LNG shipments for delivery in January and February.
The development comes as a positive sign for Pakistan, as its previous two spot tenders did not receive any offers.
According to details, Pakistan LNG Ltd (PLL) received a bid from Trafigura for an LNG import tender at a price of $23.47 per million British thermal units (mmBtu) for a delivery scheduled on January 3-4. Another bid was received for a delivery on February 23-24 at a price of $22.47/mmBtu. The bid from Trafigura is for Pakistan LNG’s second tender, which was set to close on July 14. Traders have noted that the offered shipments are priced at approximately a 30% premium to current market prices.
Pakistan’s attempts to procure spot LNG cargoes have been hindered by credit risk, preventing suppliers from selling spot shipments to the nation. However, the recent acquisition of a $3 billion Stand-By Arrangement with the International Monetary Fund (IMF) has potentially eased concerns and improved the country’s position.
Dependent on gas for power generation, Pakistan has faced challenges in securing spot cargoes of LNG due to elevated global prices resulting from geopolitical tensions. Last year, the country imported 9 billion cubic meters (bcm) of LNG, a decline of nearly 20% compared to 2021’s imports of 11.2 bcm.
Pakistan has long-term supply agreements with Qatar, including a 2016 deal for 3.75 million metric tons of LNG annually and another signed in 2021 for 3 million metric tons per year. Additionally, there is an annual portfolio contract with ENI for 0.75 million metric tons.
The outcome of Pakistan’s LNG tender remains uncertain, as the decision is not expected until July 31. The country will need to assess the viability of the offered prices and weigh them against market conditions before finalizing any purchase. The successful acquisition of LNG shipments would provide much-needed relief to Pakistan’s energy sector and help meet its growing demand for natural gas.
Pakistan LNG Limited is a subsidiary of Government Holdings (Private) Limited (GHPL) which is owned by the Government of Pakistan. PLL has the mandate to procure Liquefied Natural Gas (LNG) to meet the country’s gas requirement.
Bids were invited from reputed international suppliers for the supply of three LNG cargoes on Delivered Ex-Ship (DES) basis at Port Qasim, Karachi.
According to invitation to bid for supply of three LNG cargoes, the delivery schedule for these LNG cargos was 03-04 January 2024,28-29 January 2024 and 23-24 February 2024.
It is noteworthy that Trafigura has offered LNG supply for two cargoes while no one else participated in the bid.
