Pakistan LNG Limited (PLL) awarded a tender to commodities trader Vitol for the delivery of a liquefied natural gas (LNG) cargo in December, a source with knowledge of the matter said on Thursday, making it the country’s first spot purchase in over a year.
Last week, PLL issued a tender seeking two spot LNG cargoes for delivery on December 7-8 and 13-14. It received bids from Vitol and Trafigura for the December 7-8 delivery window at $15.97 per million British thermal units (mmBtu) and $18.39/mmBtu respectively. It received one bid from Trafigura at $19.39/mmBtu for the Dec. 13-14 delivery window.
Asian spot LNG prices rose to $15/mmBtu last Friday on increased demand in Asia and supply concerns in Europe.
Grappling with high inflation and a foreign exchange crisis, Pakistan has struggled with spot purchases of the super-chilled fuel after Russia’s invasion of Ukraine last year pushed prices to record highs, leaving the South Asian nation to face widespread power outages.
Natural gas accounts for over a third of power generation in Pakistan, and LNG imports are crucial as local gas reserves are insufficient to address growing electricity demand.
PLL last awarded a spot tender to PetroChina for the delivery of two LNG spot cargoes in June 2022, when China’s state-owned energy giant offered the lowest bids of $23.96/mmBtu for a June 1-2 delivery and $22.49/mmBtu for a June 28-29 delivery.
PLL had issued tenders in June this year, seeking a total of nine LNG cargoes for delivery from October to February and received bids from Trafigura, but did not pick them up as the price levels were too high.
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