Business

Pakistan seeks spot LNG cargoes from Azerbaijan

Announces supply deal that will see one LNG cargo provided per month

Reutrers June 14, 2023

Under the agreement, PGPC would have unconditional right to use excess capacity available at LNG terminal for third party and its affiliates. photo: file

SINGAPORE:

Pakistan has issued two tenders seeking spot liquefied natural gas (LNG) cargoes for the first time in nearly a year on Tuesday, while also announcing a deal that will see Azerbaijan provide the country with one LNG cargo per month.

Dependent on gas for power generation and running short of foreign exchange to pay for imports, the country has struggled to procure spot cargoes of LNG after global prices spiked last year following the Russia-Ukraine conflict, leaving it to face widespread power outages.

But Asian spot LNG prices this year have eased from record highs of $70/mmBtu hit in August, and are now trading below $10. Pakistan LNG, a government subsidiary that procures LNG from the international market, has one tender seeking six cargoes on a delivered-ex-ship (DES) basis to Port Qasim in Karachi in October and December, according to the tenders posted online.

The delivery windows are Oct 5-6, 20-21 and 31, and Dec 7-8, 13-14 and 24-25. The tender will close on June 20. Pakistan LNG’s second tender seeks three cargoes, also on DES basis to Port Qasim, for delivery windows of January 3-4, 28-29 and February 23-24. The second tender closes on July 14.

Pakistan LNG last issued a tender seeking 10 spot cargoes in July 2022, but it received no offers.

Separately on Tuesday, Pakistan’s Petroleum Minister Musadik Malik told a news conference that Azerbaijan will supply an LNG cargo every month to Pakistan at a “cheaper price.” He did not share details on the supply deal, but said that a contract had already been signed with Azerbaijan and that it will “start soon.”

Pakistan has two long-term supply deals with Qatar, one signed in 2016 for 3.75 million metric tonnes of LNG a year, and another signed in 2021 for 3 million metric tonnes a year. It also has an annual portfolio contract with ENI for 0.75 million metric tonnes a year.

In 2022, Pakistan’s imports of LNG slowed to 6.93 million metric tonnes for the year, down from 8.23 million metric tonnes in 2021, according to data from data analytics group Kpler.

Published in The Express Tribune, June 14^th, 2023.

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