Energy crisis looms: Pakistan not to get two LNG term cargoes from Qatar in August

ISLAMABAD: Pakistan will not be able to get two LNG term cargoes from Qatar in August under the second GtG agreement at a price slope of 10.2 percent of Brent.

The PTI government had used two cargoes each in November and December 2021 under the said agreement which was to be operational from January 2022.

Now the non-availability of two LNG term cargoes has aggravated the situation more in August and keeping in view the gravity of the situation, the government has also issued tenders seeking five LNG cargoes from the spot market for August knowing the fact that the LNG is not available in the spot market and if it is available it is at the highest ever cost of $39.8 per mmBtu.

Earlier, Pakistan LNG Limited (PLL) issued tenders three times but it did not get any bid in the first two attempts, and in the third attempt, it got only one bid at a price of $39.8 per MMBTU. The government decided not to purchase the cargo at the price of $39.8 per mmBtu.

Afterwards, PLL again issued the tenders on July 1, 2022 seeking bids for 10 LNG cargoes from the spot market, two for the current month of July, 5 for August and three for September.

“Yes, as per Annual Delivery Plan (ADP) only six cargoes are planned in August from Qatar under the first GtG agreement at a price of 13.37 percent of the Brent. And will not receive two cargos under the second GtG agreement as the PTI has used 2 cargos under the second contract in November and December 2021 which was to be operated from January 2022,” a top official privy to the development confirmed to The News. He said that the contract is spread over the calendar year. “We had 8 cargoes in May and June 2022 and 9 in November and December 2021. The long-term contract with Qatar is not equally divided into 12 months and is planned according to the Annual Delivery Plan (ADP).”

PLL expects that ENI that defaulted in July will deliver its terms cargo in August and this is how that country will have in toto 7 LNG cargos with 700 mmcfd gas in next month with a shortfall of 500 mmcfd and to bridge the deficit, the PLL issued tenders for 5 cargos for the month of August.