Pakistan LNG Limited (PLL) on Wednesday issued tenders for two spot liquefied natural gas (LNG) cargoes, one each for December and January, following approval from the prime minister, as the country braces for a worsening gas shortage during the peak winter months.
The tenders seek bids from international LNG trading companies for cargo deliveries during December 14-16 and January 9-11. Bids will be received until November 6 and opened the same day.
PLL will place orders after evaluating the bids on technical and commercial grounds, although it reserves the right to reject all bids. The procurement comes at a time when international LNG prices have surged to around $32 per million British thermal units (mmBtu).
After accounting for insurance, war-risk surcharges, freight, and port handling charges, the delivered cost of LNG is expected to reach $33.5-$34 per mmBtu. The high-priced LNG could push up the cost of electricity generated through regasified LNG (RLNG), potentially adding to the financial burden on consumers.
Pakistan's LNG requirement stands at nine cargoes for December and 11 for January. However, amid growing security concerns surrounding the Strait of Hormuz, authorities are attempting to arrange only eight to 10 cargoes for each of the two winter months.
The situation has become increasingly precarious following attacks on vessels carrying LNG to Pakistan and Bangladesh before they entered the Strait of Hormuz. In the latest developments, four oil tankers were reportedly struck by mines in the strategic waterway, raising concerns over the safety of energy shipments.
Authorities at the National Crisis Management Centre (NCMC) are closely monitoring the situation and remain in contact with Iran to secure three to four LNG cargoes each for December and January. Meanwhile, the anticipated gas shortfall is expected to be passed on to consumers across all categories.
The two gas utilities, Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC), have already introduced gas load management for domestic consumers, restricting supplies to cooking hours from Wednesday. Under the new schedule, domestic consumers across the country will receive gas during three daily windows: 6:30am to 9am, noon to 2:30pm, and 6pm to 9pm.