Page 8 - GLNG Week 26 2022

GLNG COMMENTARY GLNG

Pakistan struggles to attract

LNG cargoes

COMMMENTARY
PAKISTAN’S struggle to attract LNG cargoes Changing market
on the spot market threatens to exacerbate the Changing market conditions are making it more
power crisis engulfing the country. difficult for Pakistan to access LNG supplies
This week, it was reported that state-owned amid increased competition and high prices. The
Pakistan LNG had received only one bid in rejected offer from QatarEnergy is reported to
response to its latest spot tender for July. No represent almost quadruple the amount Pakistan
bidders came forward for three out of four deliv- paid to secure LNG on the spot market around a
ery windows, and while an offer for the fourth year ago. This would have put the cost of a cargo
window came from QatarEnergy Trading, it of LNG at around $120mn.
would have represented the highest ever price According to data compiled by Bloomb-
for a shipment to Pakistan at $39.8 per million ergNEF, Pakistan bought almost half of its LNG
British thermal units ($1,100.87 per 1,000 cubic on the spot market last year, with the remainder
metres). It subsequently emerged that Pakistan being delivered under long-term deals. And
LNG had opted not to accept the bid, scrapping Pakistan Bureau of Statistics data show that the
the purchase tender instead. country’s LNG’s imports in the 11 months up to
This marks the third time in June that Paki- May 31 stood at $4.29bn, marking a year-on-
stan has failed to complete an LNG tender for year increase of 86.3%. Now, though, it is becom-
July, and comes at a bad time as hotter weather ing more difficult for the country to secure spot
boosts power demand and further exacerbates purchases.
the country’s power shortages. However, a Pakistan is not alone in this. Other cash-
spokesman for Pakistan’s Ministry of Energy, strapped countries are also struggling with rising
Zakaria Ali Shah, told Bloomberg that the coun- spot prices of LNG. For example, it emerged this
try did not currently have a fuel shortage and week that Thailand was curbing LNG imports
could divert supplies to high-priority sectors. owing to high prices, with the move potentially
“We’re adopting an alternate strategy,” Shah putting the country at risk of fuel shortages.
told the news service in response to questions on In Pakistan’s case, the country is also increas-
the LNG tenders. ing domestic prices in an effort to meet condi-
tions required by the International Monetary

P8 www. NEWSBASE .com Week 26 01•July•2022