Pakistan on Thursday rejected bids for spot liquefied natural gas (LNG) cargoes for May, despite rising power demand and growing uncertainty over energy shipments amidst the Middle East conflict.
Pakistan LNG Limited (PLNG) had invited bids for the purchase of two spot LNG cargoes for delivery between May 12-14 and May 24-26. According to officials, seven bids were received, with the lowest for May 12-14 coming in at $17.28/mmbtu and for May 24-26 at $16.98/mmbtu.
In its meeting, the PLL Board rejected both the lowest bids, reportedly because it believes Pakistan can secure cheaper LNG from Qatar under a long-term contract. Pakistan has not received any shipment from Qatar since the Iran war broke out on Feb. 28, with shipping through the Strait of Hormuz severely disrupted amidst competing blockades of Tehran and Washington.
The PLL Board, per reports, has chosen to defer the purchase of spot cargoes in the belief that the war would soon wind down and enable shipments through the Strait.
As power demands grows with rising temperatures, loadshedding has ramped up across Pakistan, with the Power Division writing to the Energy Ministry last month and asking it to procure LNG to produce electricity. The state-owned company accepted one cargo at $18.4/mmbtu, with it reaching Pakistan on April 30.
Bloomberg has described the decision to reject the latest bids as a “risky gamble,” noting it could worsen the gas shortfall and trigger power blackouts.