Wednesday July 24, 2024

Govt floats tender to import 280,000cm LNG for April

By Javed Mirza
December 31, 2020

KARACHI: Government issued a tender to import 280,000 cubic meters of liquefied natural gas for delivery in April from the spot market, acting promptly after a cold-shoulder response to the delayed tenders for January cargoes, it was learnt on Wednesday.

Pakistan LNG Limited (PLL), a subsidiary of Government Holdings (Pvt) Limited, floated the tender to import 140,000 cubic meters each of LNG. An advertisement by PLL said the country is seeking cargoes – each of 140,000 cubic metres in two delivery windows. January 29 is the deadline for submission of bids.

The first LNG cargo will be delivered on April 6 and second on April 19-20 on a delivered ex-ship basis, according to the PLL.

In mid of November, PLL had invited bids for six LNG cargoes for delivery in January. It didn’t get a single bid for three cargoes to be delivered in the first half of January

and was offered highest price for the second half of the month.

PLL received these all-time highest bids up to 32.48 percent of Brent crude. The lowest bids for the delivery windows of February 2021 were nearly at 21 percent to 23 percent of Brent, as received by the PLL on December 28.

The gap in demand and supply of gas is expected to spiral beyond two billion cubic feet per day owing to rapid urbanisation, China-Pakistan Economic Corridor projects, and industrial growth.

“The ongoing gas crisis and much propagated mismanagement in LNG procurement warrant urgent commercial import of LNG by private parties. Government needs to remove all the hurdles and fast track regulatory formalities to enable smooth commercial import of LNG,” an industry official said.

LNG imports by private parties would ensure sufficient supplies as well as relax state entities of cumbersome computations of demand forecasts and arranging spot purchases.

A number of business houses and trade associations such as compressed natural gas associations are eager to

import their own gas once the bureaucratic hurdles are removed.

Although the government notified the framework for the import of LNG by private parties and sanctioned excess capacity available at LNG terminals for private imports, but certain bottlenecks are still there.

Traders believe that private importers, gas companies, terminal operators and regulatory authority need to be on the same page to make this initiative successful.