Pakistan fails to attract bids against $1bn LNG tender

July 07, 2022 (MLN): A liquefied natural gas tender from Pakistan for around $1 billion of the super-chilled fuel attracted zero offers on Thursday as energy shortages due to the Ukraine war caused supply to be siphoned into Europe, as reported by Dow Jones today.

Developing countries are struggling to compete with European nations for LNG, as Europe urgently looks for alternatives to Russian natural gas.

In Pakistan, businesses and homes are suffering hours of electricity shutdowns daily, as the country is short of the natural gas it needs to fuel power plants.

The government had tendered 10 cargoes for delivery from July to September. It received no offers by Thursday's deadline, the officials said.

"Market conditions are unprecedented," said Masood Nabi, chief executive of Pakistan LNG Ltd., a government-owned company that imports natural gas, it added.

 LNG prices are on the rise, with front-month Japan Korea Marker futures—the benchmark for Asian LNG prices--up 70% from a month ago. They last closed at EUR38.61 per megawatt-hour, it noted.

To recall, Pakistan LNG Limited (PLL) has invited bids to import LNG from international suppliers to ship four cargoes next month in a move to meet the gas requirement of the country,

Bids were invited from reputed companies to ship cargo in a delivery window on 3-4 July, second cargo on 08-09 July, third cargo on 25-26 July, and last cargo on 30-31 July, the document of the company said.

The companies were asked to submit bids by June 23 for the required cargoes. However, no bids have been received, calling for another energy crisis to hit the country. 

It is pertinent to mention that this is the fourth canceled tender in a row amidst a global energy crunch. 

Fahad Rauf, Head of Research at Ismail Iqbal Securities said, "Times are tough but there will be some seasonal increase in hydel generation."

The government might also look for additional FO to curtail load-shedding, he added. 

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