State-controlled Pakistan LNG Ltd has bought the most expensive cargo of liquefied natural gas on the spot market in four years as the recent re-escalation of the Hormuz crisis cut off cargoes from its term supplier, Qatar.
The state-owned Pakistani LNG importer has bought a cargo for delivery early next week via a tender that closed on Wednesday. The cargo was bought at a price of about $20.70 per million British thermal units (MMBtu), traders familiar with the deal told Bloomberg on Thursday.
The purchase price was the highest Pakistan has paid for an LNG cargo since 2022, when spot prices in Asia spiked to record highs after the Russian invasion of Ukraine and the slashed pipeline gas supply from Russia to Europe.
Pakistan was forced to the spot LNG market again several times this year, after the Iran war and the closed Strait of Hormuz triggered a new global scramble for LNG supply in the absence of flows from Qatar.
Pakistan, which has historically received nearly all its LNG from Qatar under long-term fixed deals, has faced problems in procurement since the Iran war began and halted traffic through the Strait of Hormuz.
The South Asian nation is on track to procure the most LNG cargoes on the spot market in one month since the Iran war began, as the re-escalation in the Strait of Hormuz disrupted term supplies from Qatar anew.
Earlier this week, Pakistan LNG issued a second tender for spot supply in as many weeks, as the renewed hostilities over the past few days disrupted Qatari shipments once again, with no LNG tankers observed to have exited the Strait of Hormuz for days.
The emergency LNG tender is not the first one Qatar has issued over the past months.
The latest escalation this week could push Pakistan to additional costly spot cargo replacements for the supply that’s not coming from Qatar.
By Charles Kennedy for Oilprice.com
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