Pakistan has launched a third attempt to secure a spot LNG cargo for September, as surging international prices and mounting shipping risks tied to the Strait of Hormuz continue to complicate efforts to meet the country’s gas requirements.
Pakistan LNG Limited (PLL) issued a fresh tender seeking bids from international suppliers and traders for one spot cargo of about 140,000 cubic metres, scheduled for delivery during the September 12-16 window. Bids are due to be opened on September 8.
The move follows Pakistan’s decision on September 4 to reject a spot offer from BP Singapore priced at $26.7128 per million British thermal units (MMBtu) for delivery between September 8 and 12. The BP offer was the lower of two bids received; PetroChina had quoted $26.98 per MMBtu, but neither was accepted.
It marked the second time in the same week that Pakistan declined a BP Singapore offer on price grounds. PLL had earlier rejected BP’s bid of $26.969 per MMBtu for the September 4-8 delivery window.
The repeated rejections underscore the dilemma facing Pakistan’s energy authorities: locking in cargoes at prevailing international prices could substantially raise electricity generation costs, while staying out of the spot market risks shortfalls in fuel for gas-fired power plants.
The impact is already visible across the power sector. Electricity generated from spot-procured RLNG cost an average of Rs47.38 per unit in July, up from about Rs35.5 per unit in June. Power plants generated 1,629 gigawatt-hours using RLNG in July, or 10.78 percent of total generation, at a cost of roughly Rs77.198 billion.
Spot LNG prices have climbed rapidly in recent weeks. A cargo delivered on July 27 was priced at $21.88 per MMBtu, while cargoes delivered on July 21-22 and July 15-16 were priced at $20.6999 and $18.2345 per MMBtu, respectively. The rejected September BP offer was about 22 percent higher than the July 27 cargo and roughly 46 percent above the July 15-16 cargo.
The situation has grown more difficult amid heightened geopolitical tensions and growing concerns over shipping through the Strait of Hormuz, a critical route for global energy supplies.
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