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August 5, 2020

Pakistan to float another LNG spot tender for August

Business

August 5, 2020

KARACHI: State owned Pakistan LNG Limited (PLL) is likely to float another tender to spot purchase the liquefied natural gas (LNG) for the current month to meet the spiking demand, The News learnt on Tuesday.

“With the improvement in country’s economic fundamentals, … PLL received further demand to arrange an additional spot cargo for delivery in mid-August,” the company said in a tweet.

It may be mentioned here that SOCAR Trading (UK) Limited has offered to supply LNG at the rate equivalent of 5.74 percent of Brent crude, which translates into $2.2/mmbtu approximately, to be delivered on August 27-28, 2020. Moreover, bids have already been invited for two cargoes to be delivered in September of this year.

PLL has been mandated by the government to carry out the business of the import, purifying, buying, storing, supplying, distributing, transporting, transmitting, processing, measuring, metering and selling of natural gas, LNG, re-gasified LNG, to meet the country’s gas requirements.

In this capacity, PLL procures LNG from international markets and enter into onward arrangements for supply of gas to the end user, thereby managing the whole supply chain of LNG from procurement to end user gas sale agreements.

Pakistan has resumed spot buying of LNG with state-run Pakistan LNG Limited (PLL) inviting bids for supply of three LNG cargoes (140,000 cubic meters each) to be delivered in August and September, 2020 after a gap of six months.

PLL had floated its last LNG spot purchase tender in November 2019 for cargoes to be delivered in February 2020. The country resumed oil product imports in May after a month-long absence. The resumption of imports came as domestic demand picked up after nationwide COVID-19 lockdown measures were eased.

Under the less stringent smart lockdown in place, commercial and industrial activity has resumed. Expected annual import of LNG would rise 15-30 million tons over the next four to five years, according to official estimates.

Pakistan Bureau of Statistics (PBS) numbers say the country had imported liquefied natural gas worth $2.66 billion in the outgoing fiscal year, down 20.2 percent compared with the LNG imports in the previous year.