Government seeks 420,000 cubic meters of LNG for winter demand

KARACHI: State-owned Pakistan LNG Limited (PLL) invited bids from international suppliers for the supply of three liquified natural gas (LNG) cargoes of 140,000 cubic meters each for January-February next year, official document showed on Friday, as the government struggles to overcome the impending severe energy shortages in winter.

The first delivery window is from January 21-22, the second from February 3-4 and the third from February 21-211 for spot purchases. The bids will be opened on December 5. The cargoes will be delivered on ex-ship basis to Pakistan Gas Port Consortium Terminal at Port Qasim.

PLL had invited bids for five 140,000 cubic meters of LNG supplies in its last tender issued in June 2018. Currently, there are two LNG terminals operational at Port Qasim that handle imported LNG with a combine re-gasification capacity of approximately 1.2 billion cubic feet of gas per day (bcfd) – equivalent to approximately 34 million cubic meters –, but the current handling is less than one bcfd. The government planned to install more terminals with the private sector investment.

Six additional LNG import projects have been proposed for Pakistan by ExxonMobil, Shell, Trafigura, Total, Mitsubishi and Bahria Foundation. Most of them are planned for Port Qasim locations. If only four of the new schemes come to fruition, annual LNG deliveries to the country could reach 30 million tons per annum by 2025.

Industry sources said volumes of LNG imported by Pakistan declined 11 percent in October, as the second LNG terminal, Pakistan Gas Port, remained underutilised and received just two cargoes in October.

Pakistan is expected to face gas shortages during the ongoing winter despite having two operational floating storage regasfication units. Oil and Gas Regulatory Authority said growing number of gas customers is placing a severe strain on its infrastructure and affecting the availability of the fuel.

Industrial users have already been warned that their supply could be cut during the winter months to ensure there is enough gas for the residential sector.

Pakistan relies on natural gas to meet almost 50 percent of its energy needs but its proven gas reserves have dwindled in the recent years, as consumption has outweighed new discoveries.

Earlier, LNG imports were substituting domestic gas with the government intending to raise the share of gas in the nation’s energy mix by reducing the use of polluting and inefficient furnace oil and expensive diesel oil as power station fuels.