Pakistan invites bids for record six LNG spot cargoes for December as gas crisis looms
ISLAMABAD: Pakistan will ramp up spot buying of liquefied natural gas (LNG) from the international market, seeking up to six cargoes for December, its procurement subsidiary said on its website, as the country prepares for a potentially crippling gas shortage.
December and January see the largest spike in demand for gas in Pakistan, but this year the demand-supply shortfall will be greater on the back of higher consumption and diminishing indigenous supply, authorities believe.
A source in Pakistan LNG Ltd (PLL), which handles LNG imports, told Reuters that six spot cargo purchases for delivery in December would be the most in a single month by the country.
An advertisement by PLL said the country was seeking the cargoes, each of 140,000 cubic metres, in six delivery windows and Nov. 2 is the deadline for submission of bids.
Pakistan has long term LNG agreements in place, including one with Qatar, but has also been active on the spot market since August.
The country has advertised tenders for delivery of two cargoes in August, three in September, two in October and three in November.
In a press conference last week, Pakistan’s Minister for Petroleum Nadeem Babar said the country was headed towards a major gas shortfall in December and January, and blamed dwindling indigenous gas supply and rising demand.
He added that there had been a lack of local exploration licenses granted by the previous government, and while new gas discoveries were found, they were small in size. He said his government would advertise more exploration licences this month.
According to a report put out in August by the Oil and Gas Regulatory Authority increased demand had resulted in natural gas availability constraint.
The main consumer of natural gas was the power sector, which consumed 38%, while the domestic sector was at 22% and fertiliser 16%.
Up to 45% of Pakistan’s power sector energy mix is based on natural gas, according to the report, which added: “The demand supply gap during FY2018-19 was 1,440 MMCFD, which is expected to rise to 3,684 MMCFD by FY2024-25 and 5,389 MMCFD by FY2029-30”. (Reporting by Gibran Peshimam; Editing by Michael