Pakistan has bought its second spot market LNG cargo in as many weeks, in a sign that flows of liquefied gas out of the Persian Gulf have been slow to recover.
According to Bloomberg, the country bought the cargo from TotalEnergies at a price of $17.37 per million British thermal units, to be delivered between July 10 and 11. The price is also higher than what Pakistan LNG Ltd. bought last week from BP: that cargo was priced at $16.74 per mmBtu, a premium of some $1 over the Asian spot market average.
Pakistan has relied on Qatar’s term LNG supply for years, under long-term supply agreements. However, as the war in the Middle East led to the shutdown of Qatari LNG production and exports, the country had to look elsewhere for gas. Without Qatar’s LNG, Pakistan was reeling from an intensifying energy crisis with power outages and fuel rationing. The country has also struggled to afford an alternative supply of liquefied natural gas from other parts of the world due to the war-related price premium.
The two recent purchases suggest the situation remains tight with supply, but also that Pakistan cannot entirely give up liquefied gas, if it is prepared to pay such a sizable premium for its prompt deliveries. Bloomberg reported that Qatari flows of liquefied gas to Pakistan had crashed from almost 800,000 tons in January this year to less than 50,000 tons by April, with cargoes from Mozambique and Oman adding some LNG to supply but nowhere near the levels from before the war. Pakistan even had to buy some U.S. LNG, which was delivered in May, to make up for the shortfall in Qatari shipments. U.S. LNG is not optimal for Pakistan price-wise: the May cargo was priced at $18.40 per mmBtu.
By Irina Slav for Oilprice.com
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