Govt calls bids to import 3 LNG cargoes for March

KARACHI: State-owned importer Pakistan LNG Limited (PLL) floated tenders to import 420,000 cubic meters of liquefied natural gas (LNG) for March as energy demand ramps up amid severity of winter cold spells, it was learnt on Monday.

PLL floated a tender to import three LNG cargoes of 140,000 cubic meters each for March. An advertisement by PLL said the country is seeking cargoes – each of 140,000 cubic metres in three delivery windows – and January 15 is the deadline for submission of bids. The first LNG cargo will be delivered on March 9-10, second on March 16-17 and third on March 22-23 on a delivered ex-ship basis, according to PLL.

The petroleum division said the city loads have already increased by more than nine percent in Sui Northern Gas Pipelines Limited on account of a severe cold wave resulting in pressure drops. Sui Southern Gas Company faces similar drops in Karachi and Quetta. With each 1 degree celsius drop in temperature, the demand increases by 6 million metric cubic feet / day (mmcfd).

Total gas demand is around 7.5 billion cubic feet/day, while the indigenous production is falling short by 3.5 billion cubic feet/day.

The gap between demand and supply is expected to increase to 2.7 billion cubic feet in FY2023 and 4.8 billion cubic feet by FY2028 without the imported gas, according to the Oil and Gas Regulatory Authority. Pakistan increased spot buying of LNG importing at least three cargoes a month. The gap in demand and supply of gas is expected to spiral beyond two billion cubic feet owing to rapid urbanisation, China-Pakistan Economic Corridor projects, and industrial growth.

The country has a 15-year LNG purchase deal with Qatar to buy 3.75 million tons of LNG per year for 15 years to 2030, but it regularly taps the spot market. It also has a five-year import deal with commodity trader Gunvor and a 15-year agreement with Eni.

LNG contributes 22 percent in the country’s energy mix, while its share in energy imports stands at 24 percent. Since 2015, more than 19 million tons of LNG has been imported.

There are two re-gasification LNG terminals that have pumped approximately 393.6 billion cubic feet/day of gas into the national gas distribution network in 2019, a 14 percent increase compared with 345.6 billion cubic feet in 2018. Pakistan’s LNG imports are set to multiply with news terminals coming up in near future.