Pakistan has rejected the lowest bid under an urgent tender for two liquefied natural gas cargoes launched earlier this month. The country received a total of seven bids, none of which were apparently priced low enough.
Pakistan on Wednesday issued a tender seeking to urgently buy two LNG cargoes for delivery later this month as the country struggles to cope with a gas and power crisis amid disrupted LNG supplies from the Middle East.
In response, it received bids from BP, Vitol, TotalEnergies, Azerbaijan’s SOCAR Trading, Emirati-based OQ Trading, and PetroChina, Pakistani Dawn reported. The bids ranged between $16.98 per million British thermal units and $18.58 per mmBtu. The lowest bid was made by TotalEnergies, and the highest came from OQ Trading.
Pakistan has relied on Qatar’s term LNG supply for years, but the war in the Middle East has led to the shutdown of Qatari LNG production and exports. This put Pakistan in quite a pickle because Qatari LNG was affordable for the cash-strapped state. With that gone, Pakistan’s government was forced to look to the spot market for replacement supply.
Spot LNG prices in Asia have surged since the war in Iran trapped all Middle Eastern LNG supply from Qatar and the UAE behind the Strait of Hormuz. Still, Pakistan moved to tap the spot market for the first time in nearly three years as the lack of fixed-term Qatari supply has triggered a power crisis and widespread outages.
The outcome of the tender, however, suggests that price is a bigger issue than perhaps expected and raises a question about future shipments to the import-dependent country. Earlier in the month, Pakistan received a tanker of 140,000 cu m of liquefied gas bought from TotalEnergies at a price of $18.40 per million British thermal units. The gas came from the Sabine Pass LNG facility of Cheniere Energy.
By Irina Slav for Oilprice.com
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