Pakistan seeks eight LNG cargoes for September, October

Javed MirzaWeb Editor

21st Jun, 2021. 04:45 pm
Pakistan seeks eight LNG cargoes for September, October

KARACHI: The state-owned Pakistan LNG Limited (PLL) has floated a tender, seeking delivery of eight cargoes of the liquefied natural gas (LNG) in September and October this year. The bids will be opened on July 5.

According to the tender document, five cargoes up to 140,000 cubic meters in capacity each are spread over five windows in November 2021, i.e., September 8 to 9, September 10 to 11, September 16 to 17, September 26 to 27, and September 30.

The remaining three cargoes are scheduled for delivery through October, i.e., on October 11 to 12, October 21 to 22, and October 26 to 27. All cargoes will be supplied on a delivered ex-ship basis to the facility located in Port Qasim, Karachi.

Economists have been expecting this post-Covid rebound, and the bullish factors supporting the energy prices have come together rapidly, including the so-called great demand rotation, as consumers return less permanent damage to discretionary spending than expected and fiscal policies that helped the businesses pull through.

However, despite the accelerated recovery, the pandemic-hit supply chains have not fully recovered; factories are still struggling to restore shipments of raw materials, oil and gas projects are still struggling to bring in technicians and engineers for repairs on time, and capital spending has not fully normalized all of which are exacerbating the price squeeze and commodity price inflation.

The PLL tender for the supply of two LNG cargoes in July 2021 received a lukewarm response, as only one supplier Vitol Bahrain made the offer, and that too for just one cargo.

The economic recovery and a rebound in the liquefied natural gas demand in the world’s largest LNG importing region, Asia, are set to keep spot regional LNG prices around the current levels of $10/MMBtu (million British thermal units) for most of the summer. The LNG futures also suggest around $10/MMBtu prices from June to September.

Pakistan’s LNG imports declined 7.76 percent in the first 11 months of the current fiscal year to $2.3 billion, compared with the imports worth $2.49 billion in the corresponding period last year, as slower activities due to the Covid-19 pandemic eased the demand, official data suggests.

KASB Securities managing director A A H Soomro had said that the industrial activity was limited during most part of the current fiscal year, resulting in reduced electricity demand, while the LNG-based power plants were not fully utilized.

“[The] government is not willing to run LNG plants in the long-run, as these are getting expensive; however, in the short-run, LNG imports would increase, as the industrial activity is picking up.”

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