Three suppliers bid for LNG supply in November

November 5, 2021 (MLN): Pakistan LNG (PLL) on Friday received three bids for Liquefied Natural Gas (LNG) supply during November, news reports showed on Friday.

Vitol Bahrain placed the lowest bid of $29.8966/mmBtu for the November 19-20 window whereas Qatar Petroleum Trading bid $30.05/mmBtu for the same time period.

Meanwhile, Qatar Petroleum bid $30.65/mmBtu for November 26-27 window.

The PLL invited emergency cargoes for delivery in November in two windows on Tuesday this week. The government scrambled to secure energy supplies after sudden cancellation by the firm’s long-term suppliers Guvnor and ENI defaulted on their commitments.

Market analysts the massive price differential between the Guvnor and ENI contracts i.e. $10-12/mmBtu and $30/mmBtu led to the default by suppliers. Meanwhile, the long-term contracts entail a penalty of 30% (or $3/unit) of the contract price in case of default.

Other bids for November 26-27 window were from Total Energies Gas and Power at $30.96/mmBtu and Vitol Bahrain at $31.0566/mmbtu.

The country was supposed to get 11 cargos in November; seven under the long-term LNG supply contract with Qatar; one each from Gunvor and ENI and two from spot purchases. Following the abrupt cancellation of supply from the two firms, the government was scrambling to secure LNG supplied as winter nears.

However, these cargoes are extremely costlier and would eventually increase the input costs of consumers (power generation) as well as businesses utilizing LNG in their operations.

Earlier during the day, Bangladesh bought two liquefied natural gas (LNG) cargoes for delivery in October at record prices, Reuters.com reported as low inventory in Europe boosts competition with Asia for supplies ahead of winter.

The south Asian nation bought one cargo from trader Vitol for delivery in mid-Oct. at $35.89 per million British thermal units (mmBtu) and another from Gunvor for late Oct. delivery at $36.95 per mmBtu, said an official of state-run Petrobangla, the news agency added.

LNG prices have oscillated to record highs over the last two months as a post-Covid turnaround in demand has sent commodity prices from wheat to coal to fertilizer soaring in the international markets.

Copyright Mettis Link News

Posted on: 2021-11-05T21:21:07+05:00

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