ISLAMABAD: The country’s energy agonies will further soar in August as it will only have 700mmcfd imported gas —six cargoes from Qatar and one from ENI- amid a shortfall of 500mmcfd in the system as it did not receive a single offer in a $1 billion LNG purchase tender, The News learnt on Thursday.
Pakistan LNG Limited (PLL) is seeking 10 spot cargos — two for July, five for August, and three for September.
PLL issued tenders on July 1 which were opened here on Thursday (July 7, 2022). It’s the fourth time in roughly a month that Pakistan has failed to complete an LNG purchase tender.
Earlier, Pakistan LNG Limited (PLL) had 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, which the government decided not to purchase.
PLL’s output is highly questionable as it failed to develop any international reputation in the last four years to bail out the country by arranging even a single cargo in these tough times.
PLL had also been unable to take any initiative to ink more LNG term agreements when Covid-19 hit the whole world and LNG was available at $4 per mmBtu for a long period of time.
According to a senior official in the coalition government, the output of the GHPL Managing director Masood Nabi, who also enjoys the charge of PLL MD, has been questionable for many years. He also failed to develop goodwill in the international spot LNG market. He also failed to act against Eni, which had defaulted five and a half times since January 2021 and preferred an appeasing policy towards the company.
Top sources in the PML-N government told The News that the government was busy making ToRs (terms of references) for the constitution of the commission, which will probe the reasons for failures of PTI government in fixing energy issues and it will also probe as to what mistakes PLL committed for not inking more LNG contract when it was available at $4 per mmBtu.
In another blow, two-term LNG cargoes from Qatar in August will not reach under the second G2G agreement at a price slope of 10.2 percent of Brent.
According to a Bloomberg report, that illustrates both the extent of the global fuel shortage, and also the reluctance of suppliers to sell to a country in the depths of an economic crisis.
“Already elevated Asian gas prices started rising further over the last few weeks on increasing supply disruptions from Russia to the US,” the Bloomberg reported, adding, “Global LNG flows are being redirected to energy-starved Europe, where utilities are willing to pay more than emerging markets.”
Thailand and India have also been curbing purchases due to the high prices, but they’re not in as perilous a situation as Pakistan.
The world’s fifth-most populous country was looking to buy 10 LNG cargoes from the spot market for delivery from July to September via the tender that closed on Thursday.
Pakistan bought almost half of its LNG on the spot market last year, with the rest coming under long-term deals, according to data compiled by BloombergNEF.
Even if Pakistan’s tender had garnered offers from suppliers, the traders said it wasn’t clear that the government would have been able to make any purchases due to the soaring prices.
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