KARACHI: The Pakistan LNG Limited (PLL) received lowest bids in the range of $33.53 to $34.67 per mmbtu for April and May 2022, in response to a tender issued on March 17, 2022 for the procurement of two consignments of liquefied natural gas (LNG).

Vitol Bahrain has offered to provide a consignment on April 21 to 22, 2022 at the rate of $34.67/mmbtu, while PetroChina offered $33.53/mmbtu for May 14 to 15, 2022 delivery window. ENOC Singapore and TotalEnergies also made bids ranging $36.7 to $37.7/mmbtu.

According to latest numbers, Pakistan is now relying to a great extent on a costly diesel-powered energy generation as the country scrambles to procure LNG cargoes amid global supply disruptions that exacerbated after Russia declared war on Ukraine.

The two-cargo tender issued by PLL in February only received one bid for only one cargo from QP Trading at $25.12/mmbtu. Gunvor and Eni, trading companies with which Pakistan has long-term contracts, have been defaulting on their delivery obligations.

Energy prices have risen in the wake of Russia’s invasion of Ukraine and the sanctions imposed on the former. Higher costs are particularly burdensome in the fight against climate change for developing economies like Pakistan.

The prevalent issue underlines the dangers of relying too much on LNG, which has been in limited supply in recent years due to unsustainable demand and meager supply.

In order to address this over-reliance on LNG, Pakistan and Russia are already working on different projects including the Pakistan Gas Stream, a gas pipeline from Kazakhstan and an offshore gas pipeline.

The Pakistani government was reportedly interested to sign a government-to-government deal with Russia to import LNG to meet its growing gas demand. Pakistan meets around 24 per cent of its gas demand through LNG imports.