Pakistan LNG Limited (PLL) granted a tender to commodities trader Vitol for the supply of a liquefied natural gas (LNG) cargo in December, marking Pakistan’s first spot LNG purchase in over a year.
Last week, PLL issued a tender seeking two spot LNG cargoes for delivery on December 7-8 and 13-14. It received bids from Vitol and Trafigura for the December 7-8 delivery window at $15.97 per million British thermal units (mmBtu) and $18.39/mmBtu, respectively. For the December 13-14 delivery window, it received one bid from Trafigura at $19.39/mmBtu.
Asian spot LNG prices surged to $15/mmBtu last Friday due to increased demand in Asia and supply concerns in Europe.
Pakistan has faced challenges in procuring spot LNG purchases, mainly due to high inflation and a foreign exchange crisis. This difficulty began after Russia’s invasion of Ukraine last year, which drove LNG prices to record highs, leading to widespread power outages in Pakistan.
Natural gas plays a crucial role in Pakistan’s power generation, accounting for over a third of it, and LNG imports are essential because local gas reserves cannot meet the growing electricity demand.
The last time PLL awarded a spot tender was to PetroChina in June 2022 for the delivery of two LNG spot cargoes. China’s state-owned energy company offered the lowest bids at $23.96/mmBtu for a June 1-2 delivery and $22.49/mmBtu for a June 28-29 delivery.
In June of this year, PLL issued tenders for a total of nine LNG cargoes for delivery from October to February but did not proceed with the bids from Trafigura, citing the high price levels.
