Pakistan undecided on lone pricey bid for LNG – Business


ISLAMABAD: Pakistan’s one other bid to check the worldwide spot market for extra Liquefied Natural Gas (LNG) provides in peak winter gave the impression to be a non-starter when solely a lone bidder turned up with gives at a big premium making the value unviable for native shoppers.

However, the supplied worth could present a window for Azerbaijan’s state-run Socar Trading to come back ahead offered it secures a less expensive cargo.

This would additionally put to check the G2G provide contract signed with Socar as a result of the tender has at the very least resulted in a worth discovery from the comparable spot market bids to find out the reasonability of the bilateral worth.

In a global tender on June 13, the state-run Pakistan LNG Ltd (PLL) sought bids for the procurement of three LNG cargoes for supply within the first and final week of January 2024 and the fourth week of February with a bidding deadline set at midday (12:00 hours) on Friday (July 14).

In response, just one dealer – Trafigura Pte Ltd – got here up with two bids towards January 3-4 window and February 23-24 window.

PLL struggling to safe cargoes to bridge winter vitality shortages

The bidder supplied a delivered worth of $23.47 per million British thermal unit (mmBtu) for January 3-4 supply window and $22.47 per mmBtu for February 23-24. There was no bid for Jan 28-29. Both bids are about 26-29pc increased than prevailing costs within the LNG spot market.

The bid analysis committee of the PLL has termed the 2 bids technically certified and the bottom evaluated given no different bidder turned up. The determination can be taken shortly by the PLL’s board of administrators.

The PLL had determined final month after a 12 months-lengthy break to re-enter the LNG spot market and had floated two tenders on June 13. The first tender with a bidding deadline of June 20 had acquired no bid towards tender for six cargo deliveries in October and December this 12 months.

The second tender issued the identical day (June 13) pertained to a few cargos in January and February of subsequent 12 months with a bid time limit of July 14.

The LNG provides within the spot market had eased in latest months with important worth drops to pre-Ukraine warfare stage that prompted PLL to check the waters for its winter vitality gasoline scarcity.

However, these coping with vitality provides mentioned Pakistan’s opposed credit standing amid overseas trade limitations and Europe’s winter vitality necessities saved the LNG merchants at bay because the 245 million nation had been struggling to line up letters of credit score for needed imports.

PLL used to import as much as three cargoes a month via spot tendering to satisfy seasonal calls for however has been dealing with critical difficulties in securing even a single cargo since June 2022 when its repeated tenders failed to draw any bidders.

Published in Dawn, July fifteenth, 2023

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