Page 4 - AsianOil Week 25 2022

AsianOil COMMENTARY AsianOil

Pakistan struggles to

attract LNG cargoes

Pakistan is struggling to attract LNG shipments via

tenders amid a tight market and high spot prices, which

threaten to exacerbate its power crisis

PERFORMANCE PAKISTAN’S struggle to attract LNG cargoes country did not currently have a fuel short-
on the spot market threatens to exacerbate the age and could divert supplies to high-priority
WHAT: power crisis engulfing the country. sectors.
Pakistan is struggling to This week, it was reported that state-owned “We’re adopting an alternate strategy,” Shah
source LNG on the spot Pakistan LNG had received only one bid in told the news service in response to questions on
market. response to its latest spot tender for July. No the LNG tenders.
bidders came forward for three out of four deliv-
WHY: ery windows, and while an offer for the fourth Changing market
A tight market and higher window came from QatarEnergy Trading, it Changing market conditions are making it more
spot prices have made would have represented the highest ever price difficult for Pakistan to access LNG supplies
it more challenging to for a shipment to Pakistan at $39.8 per million amid increased competition and high prices. The
source LNG. British thermal units ($1,100.87 per 1,000 cubic rejected offer from QatarEnergy is reported to
metres). It subsequently emerged that Pakistan represent almost quadruple the amount Pakistan
WHAT NEXT: LNG had opted not to accept the bid, scrapping paid to secure LNG on the spot market around a
It was also reported the purchase tender instead. year ago. This would have put the cost of a cargo
earlier this month that This marks the third time in June that Paki- of LNG at around $120mn.
the country was seeking stan has failed to complete an LNG tender for According to data compiled by Bloomb-
to sign a long-term July, and comes at a bad time as hotter weather ergNEF, Pakistan bought almost half of its LNG
supply deal, but there boosts power demand and further exacerbates on the spot market last year, with the remainder
have been no updates. the country’s power shortages. However, a being delivered under long-term deals. And
spokesman for Pakistan’s Ministry of Energy, Pakistan Bureau of Statistics data show that the
Zakaria Ali Shah, told Bloomberg that the country’s LNG’s imports in the 11 months up to

P4 www. NEWSBASE .com Week 25 24•June•2022