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Govt invites tenders to buy six LNG cargoes for May-June to overcome power outages

The government intends to buy three LNG cargoes in May and three in June at competitive prices.

ISLAMABAD: The new government has floated tenders to buy LNG from international suppliers to overcome power outages in the country and gas crisis. The government intends to buy three LNG cargoes in May and three in June at competitive prices.

When in power in its last era, the PML-N had set up three state-of-the-art LNG-based power plants in Punjab — Haveli Bahadur Shah 1,230 MW, Bhiki 1,180 MW and Balloki power plant 1,230 MW. The government preferred to utilise them for power generation instead of power plants that run on furnace oil and diesel. The PML(N) government had also started the construction of one more RLNG-based power plant at Trimmu, Jhang, which is the fourth in Punjab with a capacity to generate 1,263 MWs and ready to operate. All the four RLNG-based power plants have over 62% efficiency.

“PLL which was earlier least interested in procuring LNG from the spot market has now decided to purchase LNG cargoes under the directives of the new government with an aim to run the LNG power plants at their full capacity to produce maximum electricity.”

Apart from less supply to three LNG-based power plants at Haveli Bahadur Shah, Bhiki and Balloki, many other powerhouses, which include Liberty Power of 210 MW, Rousch of 410 MW, Nandipur of 525 MW, FKPCL 140 MW and nine units of Faisalabad GTPS, have not been producing electricity for unavailability of RLNG since December 12, 2021, Geo News reported today.

Currently, the Petroleum Division is getting almost 550 mmcfd for the power sector after closing down the gas supply to the CNG sector in Punjab and slashing the supply by 50% to captive power plants of export and local industry because of import of just 800 mmcfd LNG.

After GUNVOR cancelled its four LNG cargoes destined to provide Pakistan each in April and May and two in June, PLL also decided not to procure LNG from the spot market in the wake of the higher bids price at $34.677 per MMBTU for April and $33.53 per MMBTU for May.

The Power Division had submitted its demand of gas of 690 mmcfd for April and 800 mmcfd for May. PLL has issued a new tender seeking LNG cargoes from LNG trading companies for three — each laden with 140,000 cubic meters to be delivered during the period of May 12-13, 2022, May 17-18 and May 27-28. The tender also sought the bids for three cargoes to be delivered on June 1-2, 2022, June 6-7, and June 16-17, 2022.

Currently, Pakistan is getting eight LNG cargoes per month — seven by PSO out of which five at 13.375% of the Brent and two at 10.2% of the Brent from Qatar under GtG agreements and one by PLL from ENI at 12.14% of Brent under a 15-year agreement.

Experts are of the view that PLL will also get the bids at higher prices at over $35 per MMBTU as in the international market, spot LNG prices have soared to record highs as Europe’s push for more diversified natural gas supplies has intensified demand for LNG cargoes, with some being diverted away from Asia.

Javed Mahmood
Written By

I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.

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