Islamabad, 4 October 2022 (TDI): Pakistan LNG Limited (PLL) didn’t succeed in receiving any offer for its 72 cargoes for six years from 2023-2028.
This means that the country could be in for a rough ride as the country failed to find any bids for its two-part tender for the import of liquefied natural gas (LNG).
Analyst Stephen Stapczynski wrote that “Pakistan was unable to secure long-term LNG supply, threatening to prolong its fuel shortage.”
About long-term LNG contract
The state-owned PLL issued a two-part tender in August inviting firms to submit bids for the supply of a total of 72 LNG cargoes on a Delivered Ex-Ship basis at Port Qasim, Karachi in six years.
However, no commodity supplier has participated in PLL’s tender to supply LNG to Pakistan on a Data Encryption Standard (DES) basis from January 2023 to December 2028.
Under the first part, bids were invited for 12 LNG cargoes (one LNG cargo per month). It starts in January 2023 and ends in December 2024. Moreover, the second delivery period for the supply of 60 LNG cargoes (one LNG cargo per month) was to start from January 2025 to end by December 2028.
Pakistan has been hit with widespread blackouts this year after several failed attempts to buy gas from the expensive spot market. In addition, it tried to get a long-term deal looking for more reasonable prices, but that hasn’t materialized now.
The winter season is coming, and the LPG demand will rise sharply. Consequently, this will raise the price of LPG for consumers. It will result in making the commodity unaffordable for the poor who use it for daily cooking purposes.
The latest blow comes at a testing time for Pakistan as the country is already struggling with high inflation and falling currency reserves and the recent floods that have affected more than 1/3rd of the country.