Two global firms clinch $7.2 bn LNG supply deals for Pakistan

ISLAMABAD: Two international  companies have clinched  the biggest ever LNG supply  deal of almost $7.2 billion for 5  to 15 years under which Pakistan  will be having 240 LNG  shipments starting from July 1,  a senior official of Pakistan  LNG Limited told The News.  LNG Ltd opened the bids  here on Thursday and declared  the ENI for 15-year LNG supply  contract and Gunvor for 5-year  contract as winner parties.  ENI has won the 15-year  tender at the price of 12.29 percent  of the Brent under which  it will provide 180 LNG cargoes.  The ENI’s bid was found  the lowest among the five  shortlisted bidders. Similarly,  Gunvor has bagged five-year  LNG supply contract under  which 60 LNG cargoes will be  provided to Pakistan at the  price of 11.6247 percent of the  Brent which is the lowest one  among the 10 bids.  Federal Minister Shahid  Khaqan Abbasi, when contacted,  confirmed the development.  “We are satisfied with the  bid offered by Gunvor for 5-  year LNG supply contract.  However, the lowest bid by ENI  is not up to the mark,” the minister  argued.  “Our consultant would evaluate  the ENI bid for 15 years  and then the government will  decide as to whether the contract  is awarded to ENI or not.  We have the option for government-  to-government LNG deal  and we may not accept the bid  of ENI as it is at higher side,”  the minister said.  Pakistan LNG Ltd (PLL) had  floated a mid- and a long-term  tender to purchase combined  240 shipments of liquefied natural  gas (LNG). As per the official  website of Pakistan LNG  Ltd, country has emerged to become  a major gas importer.  According to the official  documents showing the result  of bids available with The  News, ENI has beaten up five  international competitors in  the bidding process by submitting  its lowest bid at 12.29 percent  of the Brent. However,  other bids which PLL received  include the 13.3699 percent of  the Brent from Trafigura, 12.7  percent of Brent from Gunvor,  12.9 percent from Petronas and  12.599 percent from Shell.  Coming to the five-year  LNG contract, Gunvor has  emerged as the winner company  among the shortlisted  bids of 10 companies. According  to the details, for five year  LNG deal, Glencore submitted  its bid with price of 14.4865 percent  of the Brent, Gunvor  11.6247, ENI 12.2900, Gas Natural  13.29, Shell 12.3000,  Trafigura 12.4874,Gazprom  12.4700, Petronas 12.900, Engie  12.39 and CNOOC came up  with the bid at price of 12.8280  percent of the Brent.  Pakistan has ploughed billions  of dollars into LNG infrastructure,  including the construction  of a second LNG  import terminal and pipelines  linking Karachi with Lahore in  the Punjab region, the nation's  industrial heartland.  The current crop of tenders  are a small part of Pakistan's  projected demand as the country  works to bring two more  import terminals online within  the next couple of years, making  it a potent force in global  gas markets.  The country first began buying  LNG last year and has already  contracted supplies from  trading firm Gunvor and Qatargas,  the world's biggest LNG  producer. Cheap gas is tempting  out new importers from the  Middle East to Africa and Asia,  helping stave off a deeper price  rout hurting producers'' bottom  lines.