Pakistan receives no bid for six LNG cargoes

ISLAMABAD: Pakistan LNG Limited (PLL) Tuesday received zero bids against its June 13 tender for the purchase of six spot cargoes to be delivered during the period between October and December this year.

Talking to this reporter, the Petroleum Division spokesman confirmed the development saying the PLL had received no response from the LNG trading companies. However, he offered no comments when asked about the reasons behind the zero response.

Earlier on August 6, 2022, the PLL floated a two-part tender seeking bids for 72 cargoes under 6-year term agreements, but it did not receive any bid. At that particular time, no LNG was available, as most of spot LNG was committed to the European countries.

Top officials are of the view that there are two reasons for the lack of response from international suppliers. One reason, according to them, is that the international trading companies did not show any interest as they (LNG suppliers) knew that the bids had been invited by the PLL to ascertain the lowest bids for each cargo and not to purchase the product from them. The lowest prices would be used as price discovery to purchase LNG cargo from SOCAR, an Azerbaijan firm. The second reason is, the officials said, that the LNG suppliers are also well known to the bitter ground economic realities of the country, which has few dollars to purchase the spot LNG. They know that Pakistan is a high-risk country, as it is running short of US dollars and is unable to open and honor LCs. The official said in the last ECC meeting, the Petroleum Division was allowed to ink the LNG procurement agreement with SOCAR-UK amid strong opposition by ex-prime minister Shahid Khaqan Abbasi.

“Abbasi did not attend the said ECC meeting in protest against the faulty summary prepared by the Petroleum Division. Abbasi met the finance minister and tried to convince him that the deal with Azerbaijan was not a good one as it was not a sound LNG trading company but a second-tier company, and purchasing distressed LNG cargo a month without a firm demand and price discovery mechanism will serve nothing.”