Pakistan is about to get some energy relief with tankers carrying Qatari LNG set to arrive in the country this month. The first cargo is seen arriving as early as Thursday, Bloomberg reported, citing ship-tracking data.
Pakistan has been struggling to keep the lights on after Qatar declared force majeure on its exports following Iranian strikes that caused damage to its Ras Laffan LNG hub. Since then, Pakistan has been forced to turn to spot LNG markets and pay hefty premiums for the occasional shipment. Qatar was the biggest supplier of liquefied natural gas to the South Asian nation, under long-term contracts.
The country has issued several prompt liquefied gas delivery tenders over the past three months, consistently paying $20 per million British thermal units and more—a tender earlier this month ended without an order, after Pakistan’s state gas company only received one offer, whose price was $27 per million British thermal units. This is three times higher than pre-war LNG prices that Pakistan was paying.
“The international LNG price is around $23.18 per MMBtu, whereas the bid received was $26.969 per MMBtu. The price was considered too high, so a fresh tender has been issued,” a senior Pakistan LNG Limited executive said, as quoted by Pakistani media earlier this month. Following the failure of that tender, Pakistan LNG issued a new one.
The Qatari cargoes would go some way towards alleviating the energy crisis in Pakistan, where power generation costs have soared due to the gas crunch and rolling blackouts have become a fixture of life, sometimes lasting for 24 hours in some parts of the country. As of July, these were 38% higher than a year earlier and since then have likely one even higher as LNG on the spot market has also trended higher while QatarEnergy announced an extension of its force majeure.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com
- Oil Nears $100 as U.S. Destroys Five Iranian Tankers
- Vitol CEO: Global Fuel Markets Are “Tight and Inflexible”
- Gulf Producers Find Workarounds As Hormuz Tensions Persist
