LONDON: Pakistan issued a tender for the supply of 10 liquefied natural gas (LNG) cargoes between the start of October and the end of December, Pakistan LNG Limited documents seen by Reuters showed on Tuesday.
The tender is likely to be welcomed by the spot market, which has been weighed down by ample global supplies, with cargoes trading at below $4 per million British thermal units (mmBtu) last week for the first time in years.
State-owned Pakistan LNG sought four cargoes in October, two for November and four more cargoes for December, with bids due by September 5, the documents showed.
Pakistan LNG last issued a short-term LNG supply tender in May, when it sought five cargoes for the end of July to September. The offers came in at 7.13% to 8.54% of Brent crude or around $4.4 to $5.3 per mmBtu at the prices of that day.
It also issued one of the largest tenders ever in June for 240 cargoes over a 10-year period which closed last month, but contrary to its normal procedures, it has not yet announced the lowest bidders.
Sources told Reuters that Italian oil major Eni, China’s overseas energy unit PetroChina, the
trading arm of Azeri state oil company SOCAR and commodities trader Trafigura bid for that mega-tender.
Pakistan’s LNG tenders are keenly watched because prices are normally revealed, shedding light on an otherwise opaque market. For the latest tender, the delivery windows are: Oct. 1-2, Oct. 11-12, Oct. 16-17, Oct. 28-29, Nov. 12-13, Nov. 30, Dec. 10-11, Dec. 16-17, Dec. 21-22, Dec. 26-27.
The government mandated the PLL to carry out the businesses of the import, purifying, buying, storing, supplying, distributing, transporting, transmitting, processing, measuring, metering and selling of natural gas, LNG, and re-gasified LNG to meet the country’s gas requirements.
Sources said that various state-owned companies have shown their interest in a long-term supply tender of LNG launched by state-owned Pakistan LNG. Pakistan has signed government-to-government level agreements of cooperation in various sectors of economy including energy.
The country’s demand for LNG could more than triple in the next three to five years, chief executive of PLL said at a conference in Singapore earlier this year. Last year, the country imported nearly 7 million tons of LNG.
The import could grow to as high as 15 million and up to 25 to 30 million tons over the next three to five years, PLL’s Managing Director and Chief Executive Adnan Gilani said.
Pakistan is adding at least 300,000 gas consumers every year who consume local production at cheap rates elbowing out productive sectors to rely on imports.
The country’s domestic gas output has plateaued in the last five years, falling to 1.46 trillion cubic feet in 2017/18 from 1.51 trillion cubic feet in 2012/2013, according to an annual report from the petroleum ministry.
The existing two LNG terminals are nearly fully utilised while another two are expected to announce a final investment decision this year. The two import terminals have regas capacity of 1.2-1.3 billion cubic feet of gas per day, or about 9-10 million tons of LNG a year.
(This news/article originally appeared in The News on August 7th, 2019)