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Sunday April 14, 2024

Pakistan fails in its first attempt to buy LNG

Sources say no companies responded to Pakistan LNG Ltd's tender to purchase six shipments for Oct-to-Dec delivery

By Business Desk
June 20, 2023
A ship carrying liquefied gas (R) approaches the new floating terminal for liquefied gas built by LNG (liquefied natural gas) Croatia, in the town of Omisalj on the island of Krk, on April 25, 2023. — AFP
A ship carrying liquefied gas (R) approaches the new floating terminal for liquefied gas built by LNG (liquefied natural gas) Croatia, in the town of Omisalj on the island of Krk, on April 25, 2023. — AFP 

Pakistan on Tuesday failed in its first attempt in about a year to buy liquefied natural gas (LNG) from the spot market, with no suppliers of the power-station fuel offering cargoes, Bloomberg reported.

No companies responded to Pakistan LNG Limited's (PLL) tender to purchase six shipments for October-to-December delivery, which closed on Tuesday, traders —who didn't want to be named as they aren’t authorised to speak to media — told the foreign publication.

Many overseas banks were not accepting letters of credit (LCs) from Pakistani financial institutions to procure LNG shipments, making suppliers reluctant to offer cargoes, the publication reported last week.

The $350 billion economy is struggling with a depreciating currency, political turmoil, and an increased risk of a default on its foreign debt.

To top it off, the International Monetary Fund (IMF) came down hard on the federal government's recently presented budget, a sign that the June-end deadline to unlock the funds won't be met.

Pakistan's inability to buy gas will aggravate energy shortages in the country, increasing the frequency of blackouts and curbing the supply of fuel to industrial consumers.

The nation was hit hard by the energy crisis spurred by Russia's invasion of Ukraine last year due to its high dependence on imports. Several similar tenders by Pakistan last year also failed to gain offers from suppliers.