Pakistan to offer two more LNG tenders in October

Each of which will bring 750,000 tons of LNG per year

ISLAMABAD: Pakistan plans to issue two international tenders for the import of 750,000 tons of liquefied natural gas (LNG) per year each in the coming month, the head of state-owned LNG company said, as the country seeks to alleviate energy shortfalls.

Pakistan’s economy has long been hurt by energy shortages, with Prime Minister Nawaz Sharif under pressure to end blackouts before the 2018 general election.



Adnan Gilani, head of Pakistan LNG, a new state-owned company set up to manage procurement and supply of gas, said firms from Australia, Malaysia, Russia, Qatar, the United States and Azerbaijan were interested in the two tenders.

“We had over half a dozen participants bidding in our last international tender and expect more than twice that number this time around,” he told Reuters on Monday.

Gilani said specifics of the tenders were being finalised, but they would probably be a five-year and a 15-year offer, as well as a possible spot purchase. Pakistan has ploughed billions of dollars into LNG infrastructure, including construction of a second import terminal and pipelines linking the port city of Karachi with Lahore in Punjab, the industrial heartland.

The country has been earmarked as an up-and-coming demand outlet for the oversupplied LNG market. Qatar, which signed two term supply contracts with Pakistan this year, is the country’s largest LNG supplier.



Pakistan is heavily reliant on expensive furnace oil imports to plug energy shortfalls and officials expect the LNG imports to lower the cost of energy. Gilani said Pakistan would also negotiate separate government-to-government LNG deals. “We have interest from more than five sovereigns to supply LNG to Pakistan,” he said.

According to Gilani, an impending glut in global LNG production means Pakistan expects bids by international companies to be far below those offered by trading house Gunvor, which won the last international tender.

Traders say Gunvor offered a delivered price of 13.37% of a barrel of crude oil for the 60-cargo supply tender between 2016 and 2020. “We expect a substantial price decline because of the global supply glut and new production coming on line in the short term,” he said.

Published in The Express Tribune, September 7^th, 2016.

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