Pakistan Among Fastest Growing LNG Markets in the World
Pakistan joined the list of LNG importers last year and promptly became one of the world's fastest growing LNG markets, according to Shell 2017 LNG report. The South Asian nation has suffered a crippling energy shortage as demand has risen sharply to over 6 billion cubic feet per day, far outstripping the domestic production of about 4 billion cubic feet per day. Recent LNG imports are beginning to make a dent in Pakistan's ongoing energy crisis and helping to boost economic growth. Current global oversupply and low LNG prices are helping customers get better terms on contracts.
Global LNG Market:
Pakistan, Egypt and Jordan together imported 13.9 million tons of LNG, more than the combined increase of 11.9 million tons by the most populous nations of China and India.
The biggest increase in LNG exports in 2016 came from Australia, where exports increased by 15 MT to a total of 44.3 MT. It was also a significant year for the USA, after 2.9 MT of LNG was delivered from the Sabine Pass terminal in Louisiana. Qatar remained the world’s largest LNG exporting country, accounting for around 30% of global trade of 258 MT by exporting 77.2 MT, according to International Gas Union report 2017.
LNG Demand in Pakistan:
Pakistan has been a big consumer of natural gas since the discovery of Sui gas fields in Balochistan in 1952. Sui now accounts for just 6% of natural gas domestically produced in Pakistan. The rest of the 94% comes from gas fields in other parts of Pakistan. Among the various provinces, Sindh is now the biggest producer of natural gas. Demand has risen sharply to over 6 billion cubic feet per day, far outstripping the domestic production of about 4 billion cubic feet per day.
Pakistan is currently importing 2 million MT (96 billion cubic feet) of LNG and negotiating to secure an additional 3 million MT in long-term contracts by the end of 2017 to supply its new LNG floating terminal due to arrive by December, according to M. Adnan Gilani, chief operating officer with Pakistan LNG Ltd, as reported by Platts.
New supply agreements will increase Pakistan's total LNG contracts total to more than 11 million MT per year, as the country aims to resolve a decade-long energy crisis, driven by growing gas consumption and falling domestic production.
In addition to government-to-government contracts, there are also private and public companies negotiating deals to import LNG. For example, Karachi-based power generator K-Electric is seeking supply for its 900-megawatt, $1-billion Port Qasim Power Station which will start-up in two phases, in mid-2018 and the end of 2019, according to Reuters news agency.
In the longer term, Pakistan aims to allocate a quarter of its LNG purchases to the spot and short-term markets, Pakistan LNG Ltd's Adnan Gilani told Platts. "Initially, our goal is to solve our energy crisis. We have long-term downstream commitments, so we do not mind going to mid-to-long term initially," he said. "Over the course of time, we will be able to cater to our variable non-cyclical demand... and allocate about a quarter of our portfolio to spot and short term. PLL is currently purchasing four cargoes per month on a short-term basis as it awaits the start of new term volumes.
By 2022, Pakistan expects to import 30 million MT (1,440 billion cubic feet) of LNG, according to Adnan Gilani of PLL.
LNG Infrastructure:
There is one LNG terminal currently operational at Port Qasim and 5 more are planned in Pakistan over the next two years to deal with rising volume of LNG imports. New pipelines are planned by South Sui Gas and Northern Sui Gas companies to transmit regasified LNG to various parts of the country to meet demand.
Summary:
Pakistan is among the fastest growing LNG markets, according to Shell 2017 LNG report. The country has suffered a crippling energy shortage in recent years as demand has risen sharply to over 6 billion cubic feet per day, far outstripping the domestic production of about 4 billion cubic feet per day. Recent LNG imports are beginning to make a dent in Pakistan's ongoing energy crisis and helping to boost economic growth. Current global oversupply and low LNG prices are helping customers get better terms on contracts.
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| Pakistan Gas Market Forecast. Source: Platts |
Global LNG Market:
Pakistan, Egypt and Jordan together imported 13.9 million tons of LNG, more than the combined increase of 11.9 million tons by the most populous nations of China and India.
The biggest increase in LNG exports in 2016 came from Australia, where exports increased by 15 MT to a total of 44.3 MT. It was also a significant year for the USA, after 2.9 MT of LNG was delivered from the Sabine Pass terminal in Louisiana. Qatar remained the world’s largest LNG exporting country, accounting for around 30% of global trade of 258 MT by exporting 77.2 MT, according to International Gas Union report 2017.
LNG Demand in Pakistan:
Pakistan has been a big consumer of natural gas since the discovery of Sui gas fields in Balochistan in 1952. Sui now accounts for just 6% of natural gas domestically produced in Pakistan. The rest of the 94% comes from gas fields in other parts of Pakistan. Among the various provinces, Sindh is now the biggest producer of natural gas. Demand has risen sharply to over 6 billion cubic feet per day, far outstripping the domestic production of about 4 billion cubic feet per day.
Pakistan is currently importing 2 million MT (96 billion cubic feet) of LNG and negotiating to secure an additional 3 million MT in long-term contracts by the end of 2017 to supply its new LNG floating terminal due to arrive by December, according to M. Adnan Gilani, chief operating officer with Pakistan LNG Ltd, as reported by Platts.
New supply agreements will increase Pakistan's total LNG contracts total to more than 11 million MT per year, as the country aims to resolve a decade-long energy crisis, driven by growing gas consumption and falling domestic production.
In addition to government-to-government contracts, there are also private and public companies negotiating deals to import LNG. For example, Karachi-based power generator K-Electric is seeking supply for its 900-megawatt, $1-billion Port Qasim Power Station which will start-up in two phases, in mid-2018 and the end of 2019, according to Reuters news agency.
In the longer term, Pakistan aims to allocate a quarter of its LNG purchases to the spot and short-term markets, Pakistan LNG Ltd's Adnan Gilani told Platts. "Initially, our goal is to solve our energy crisis. We have long-term downstream commitments, so we do not mind going to mid-to-long term initially," he said. "Over the course of time, we will be able to cater to our variable non-cyclical demand... and allocate about a quarter of our portfolio to spot and short term. PLL is currently purchasing four cargoes per month on a short-term basis as it awaits the start of new term volumes.
By 2022, Pakistan expects to import 30 million MT (1,440 billion cubic feet) of LNG, according to Adnan Gilani of PLL.
LNG Infrastructure:
There is one LNG terminal currently operational at Port Qasim and 5 more are planned in Pakistan over the next two years to deal with rising volume of LNG imports. New pipelines are planned by South Sui Gas and Northern Sui Gas companies to transmit regasified LNG to various parts of the country to meet demand.
Summary:
Pakistan is among the fastest growing LNG markets, according to Shell 2017 LNG report. The country has suffered a crippling energy shortage in recent years as demand has risen sharply to over 6 billion cubic feet per day, far outstripping the domestic production of about 4 billion cubic feet per day. Recent LNG imports are beginning to make a dent in Pakistan's ongoing energy crisis and helping to boost economic growth. Current global oversupply and low LNG prices are helping customers get better terms on contracts.
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https://www.thenews.com.pk/latest/234489-POL-discovers-largest-reserves-of-oil-and-gas
Pakistan Oil fields Limited (POL) had discovered one of the largest oil and gas reserves from its Jhandial well (Punjab) in the last five years.
Jhandial well is located in Ikhlas Block in Northern Potwar, about 83 kilometers Southwest of Islamabad in District Attock, said an official.
POL holds 80% share in the block whereas The Attock Oil Company (AOC) has a 20% share.
The block is located in a prospective but geologically complex area surrounded by a number of significant oil discoveries.
The drilling of the deep exploratory well Jhandial-1 was proposed after acquisition and interpretation of recently acquired 3D seismic data.
The well was drilled to a total depth of 18,497 feet to test the Eocene and Paleocene carbonate reservoirs.
During testing, significant amount of hydrocarbons (oil and gas) were encountered in the Sakessar, Nammal (Eocene) and Patala (Paleocene) formations with flow rates of 21 million cubic feet of gas and 2,520 barrels of oil per day at choke size of 40/64"at well head flowing pressure of 3,768 psi, 19 million cubic feet of gas and 2,160 barrels of oil per day at choke size of 32/64"at well head flowing pressure of 5,364 psi and 16.5million cubic feet of gas and 1,630 barrels of oil per day at choke size of 28/64"at well head flowing pressure of 6,290 psi.
The American Petroleum Institute (API) gravity of the oil is around 40o and the gas has a rich calorific value of 1,161 British Thermal Units per standard cubic feet of gas.
The gas composition analysis indicates that it contains about 86% methane, 7.2% ethane and 2.9% propane. The LPG content of the gas is about 2.5 metric tons per million cubic feet of gas.
The well will be connected to the production line within two weeks and will gradually attain full potential.
Structurally, Jhandial is a thrusted anticline just north of the Dhurnal Oil field. It has a closed area of about 15 square kilometers in the most likely case, with a thick net reservoir column from top of the Chorgali Formation (Eocene) to the base of the Paleocene Formation.
Preliminary initial estimated recoverable reserves of the field are in the range of at least 292 billion standard cubic feet of gas and 23 million barrels of oil.
The Jhandial discovery is expected to contribute to the country's energy sustainability while also having a positive impact on the future of exploratory efforts in the block and surrounding areas.
https://tribune.com.pk/story/1526272/bridging-energy-shortfall-lng-revolutionising-pakistans-energy-sector/
If one looks at Pakistan’s print and electronic media, it would appear that nothing has gone right for the liquefied natural gas (LNG) projects in the country. However, the rest of the world has a completely different view of the matter.
They marvel as to how quickly the government of Pakistan was able to sign contracts at the most economical prices, build LNG terminals and other infrastructure, and actually begin using the gas to alleviate severe energy shortages.
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Already some results are becoming evident. The most obvious effect has been on the use of compressed natural gas (CNG) in automobiles. Almost 75% of around 3,200 CNG pumping stations operating in 2012 have restarted their operations, according to the All Pakistan Compressed Natural Gas Association.
Pakistan was amongst the top CNG-user countries with 3.7 million CNG-run vehicles before 2012. Since LNG is at least 30% more economical to use, its availability to automobiles will result in considerable savings for consumers as well as the government. The other advantage is that CNG is a cleaner fuel.
It is not just transport and power sectors that are the major beneficiaries, other sectors benefit as well. Gas is used as raw material in the manufacture of fertilisers and this year Pakistan has become a net exporter rather than an importer of the commodity.
It is time other sectors such as Railways start planning to switch from diesel-run locomotives to LNG. This would save 40-60% of fuel cost.
Our obsolete furnace-oil based power plants should be replaced by more energy-efficient LNG-based plants as is already being done in India. This is expected to save $1.5-2 billion in foreign exchange annually.
With the availability of cheaper fuel, Pakistan’s competitiveness will increase, resulting in revival of exports and the overall economy.
With the completion of the China-Pakistan Economic Corridor (CPEC) early harvest projects, and no energy worries, the incoming government in 2018 would inherit a Pakistan different than what it was only four years ago.
After losing a quarter of its value in five months as the prime minister was ousted over corruption charges and the current-account deficit ballooned, Pakistan’s stock market is starting to look cheap to foreign funds.
The market is definitely oversold and it’s a good time to buy, said Mohammed Ali Hussain, a senior analyst in Dubai at Frontier Investment Management Partners Ltd. The shares have now fallen enough to compensate for the risk of a rupee devaluation and look attractive ..
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Beset by political turmoil and an increasingly precarious macroeconomic position, Pakistan has seen $402 million of stocks outflows this year even as the country was restored to emerging-market status by index provider MSCI Inc. But with an economy supported by Chinese President Xi Jinping’s “ One Belt One Road” infrastructure push and average valuations that have fallen to around half the level of Indian shares, sentiment is turning.
Read more at:
//economictimes.indiatimes.com/articleshow/61182075.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
http://www.gulf-times.com/story/574696/Pakistan-s-private-sector-to-get-new-LNG-terminal
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Pakistan’s domestic gas production capacity is approximately 4bn cubic feet per day (bcfd), while demand is more than 6bn bcfd, resulting in a growing shortfall of gas which is expected to worsen in the coming years. An estimate said the gap between demand and supply is projected to double by 2020.
A consortium comprising local and foreign business houses is poised to set up Pakistan’s first liquefied natural gas (LNG) terminal that would be dedicated to energy-starved private sector, industry officials said yesterday.
The officials said that the consortium consisting of Fatima Group, Shell Gas BV, Gunvor Group Ltd and Engro Elengy Terminal Ltd would set up the terminal with a capacity to regasify 600mn metric cubic feet per day in ‘near future’. It would enable private buyers to buy RLNG on competitive price.
At present, the two LNG terminals operated by Engro Elengy and Pakistan GasPort Consortium Ltd – with 1.2bn cubic feet per day capacity – are mainly catering to the need of RLNG-based power plants of the government.
The present domestic gas production capacity is approximately 4bn cubic feet per day (bcfd), while demand is more than 6bn bcfd, resulting in a growing shortfall of gas which is expected to worsen in the coming years. An estimate said the gap between demand and supply is projected to double by 2020.
The increasing trend in demand will continue to pose challenge despite initiative taken by the government that led to injecting of RLNG into domestic network in early 2015.
Official said the new consortium has shown commitment to start work on LNG terminal in view of the government’s encouraging policies.
“This initiative will boost imports of much-needed LNG for the energy-starved private sector,” an official said.
Officials said the new LNG partnership will help in further reinforcing energy security of the country by reducing demand supply gap with provision of one of the cheapest fuels on competitive terms.
An independent private LNG market will encourage competition as private buyers and sellers will truly create a viable energy market, they added. Gas shortages resulted in extreme stress to economy during the last decade. The industrial and commercial sectors have especially been bearing the brunt of chronic energy shortages.
The shortfall directly affected as many as 500,000 households, while it also caused shutdown of industries or slowdown in production, causing unemployment, according to an estimate. Particularly, export-oriented sectors are badly hurt by energy and power crisis that led to loss of export revenue.
More than 2,500 megawatts of power projects were brought online or switched from expensive liquid fuels with the injection of imported RLNG, while 750 plus compressed natural gas stations commenced operation in the Punjab alone, creating a new hope of survival for $4.5bn industry.
Furthermore, the revival of more than 500 industrial units mainly comprising of export-oriented textile could be made possible due to LNG supplies.
Similarly, the robust fertiliser industry that was plagued by non-availability of natural gas could only be revived after RLNG supplies. Consequently, the fertiliser industry has witnessed an increase of 1mn tonnes in production.
LNG is one of the most rapidly expanding energy commodities globally due to its obvious economic and environmental advantages. Global LNG trade reached an all-time high of 260mn tonnes in 2016.
The sector’s 10-year compound annual growth rate stands at 5%. The world’s regasification capacity stood at 820mn
http://tass.com/economy/990860
Russia sees good opportunities for trade and economic cooperation with Pakistan, primarily in energy, Russian Foreign Minister Sergey Lavrov said on Tuesday, opening talks with his Pakistani counterpart Khawaja Muhammad Asif on Tuesday.
"We have good opportunities in trade and economic cooperation, investment cooperation, most notably in energy, given that the significant part of this sector in your country was created with the assistance of our specialists," Lavrov said.
"One of priority areas of our cooperation is anti-terror fight," Lavrov said. "We expect to continue providing assistance in enhancing your country’s potential to fight terrorism," he stressed.
The Pakistani foreign minister said he saw opportunities for bilateral cooperation in military, technical and banking sectors. He congratulated Lavrov on the 70th anniversary of establishing diplomatic ties between Pakistan and Russia, voicing hope to step up cooperation.
Moscow and Islamabad will establish a commission on military cooperation, he said.
"A commission on military cooperation is being formed," Lavrov said. "We have confirmed Russia’s readiness to continue boosting Pakistan’s counterterrorism capacity, which is in the entire region’s interests," the Russian top diplomat added.
"Last year, we handed four Mil Mi-35M combat and cargo helicopters over to our partners," he went on to say. "I am sure that they have been in demand as far as counterterrorism operations go, as our colleagues told us today," the Russian foreign minister noted.
Russia and Pakistan will continue the practice of organizing Druzhba (Friendship) joint tactical drills. "We have decided to continue the practice of organization of joint tactical exercises Druzhba to drill skills of counter-terrorist organizations in mountainous conditions," he said. "Such drills were conducted last autumn in Russia’s Karachay-Cherkessia."
More:
http://tass.com/economy/990860
https://www.hellenicshippingnews.com/pakistani-government-seeks-to-reduce-supplies-as-demand-for-lng-fades/
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As a consequence, the LNG throughput handled by PLL from Gasport Terminal would be reduced from 300 million cubic feet per day (mmcfd) to 200mmcfd while PSO would reduce supply from Engro Elengy Terminal from 600mmcfd to 500mmcfd.
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All the three LNG projects were required to achieve commercial operation date (COD) on combined cycle by December 2017 under revised schedule instead of original schedule of June-August 2017, but are yet to reach that stage, he said. One of the plants may achieve COD on March 7, he added.
He said the LNG off-takers were either not ready or a few others had lower requirement for LNG while pipelines and storages were fully packed and hence the only option left was to reduce throughput from both terminals.
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The meeting was attended by Minister for Power Sardar Awais Ahmed Khan Leghari, Finance Adviser Miftah Ismail, Special Assistant to the PM Barrister Zafarullah Khan, federal secretaries senior officials of divisions concerned. The meeting was also “briefed on demand and supply situation and the power generation projections from March till October 2018”.
Interestingly, the LNG supply jack up was particularly based on power plants’ requirement. The Central Power Purchase Agency (CPPA) and National Transmission & Despatch Company (NTDC) have been giving gas demand of up to 900mmcfd, but actual consumption in the sector has been less than 500mmcfd.
For February, the power sector has been committing LNG offtake of 700mmcfd, but the supply remained less than 400mmcfd and some quantities were diverted to the domestic sector besides the industry.
Under revised schedules, the Petroleum Ministry official said the two LNG projects of the federal government namely Haveli Bahadar Shah and Balloki and Qaid-i-Azam Power Plant (Bhikki plan) of Punjab government have confirmed combined cycle commissioning in early March (all three having 1,200MW).
The three plants were to get firm supply of RLNG from December/January for combined cycle testing but they have so far failed to scale up supplies due to repeated technical failures.
In fact, the three were to start single cycle operations over one year ago for which two LNG terminals were set up and LNG import arrangements were put in place at the expense of millions of dollars of the taxpayer money. The plants were to make ‘take or pay’ payments to LNG importers under back-to-back agreements in case of non-consumption of RLNG even in single cycle phase.
However, the stakeholders in the supply chain have refrained from ‘take or pay’ settlement under orders of the PM Office to spread the losses across the chain instead of cost build up in LNG power plants to avoid Nandipur Power project-like cost escalations. The cost, therefore, shift to PSO, LNG companies and Sui gas companies besides the consumer at large. LNG terminal operators like Elengy and Gasport are qualified to claim full payments that increases the processing cost because of lower utilisation factor.
Interestingly, chief executive of Qaid-i-Azam LNG project Ahad Cheema was picked up by National Accountability Bureau (NAB) in a different case when his first plant at Bhikki was in final stage of testing and he had been entrusted to undertake fourth LNG project of 1,200MW at Trimmu when it had become clear that enough generation capacity had been contracted.
In the meanwhile, a number of low-cost generation project based on coal and hydropower have come on line like coal-based project at Sahiwal contributing 1,300MW, Port Qasim coal plant 600MW and expected to go up to 1,300MW soon. Additional nuclear power capacity of around 800MW is likely to be commissioned this summer while Tarbela-4th extension will give enhanced supplies in summer, followed by Neelum-Jehulm.
https://www.bloomberg.com/news/articles/2018-03-16/exxon-mobil-partnering-with-pakistan-for-its-third-lng-terminal
Exxon Mobil Corp. is working with a group of Pakistan’s large businesses on a proposal to build and supply the country’s third import terminal for liquefied natural gas, according to the nation’s minister for maritime affairs.
Exxon has partnered with Pakistani consortium Energas to develop the import terminal, the minister, Mir Hasil Khan Bizenjo, said by phone Friday, without providing further details. An Exxon spokesman in Singapore wasn’t immediately able to comment.
According to a presentation the companies made to the country’s regulators Thursday, a copy of which was obtained by Bloomberg, the group plans to start building a $150 million offshore terminal at Port Qasim near Karachi in May, pending government approvals. Exxon and Qatar would supply LNG to the terminal, which is expected to be completed by the end of 2019, according to the presentation.
With a population of more than 200 million and an economy growing above 5 percent, Pakistan has the largest appetite for LNG among emerging markets, according to Bloomberg New Energy Finance. The nation’s domestic gas production has remained stable for more than a decade despite growing demand.
The terminal will have throughput capacity of 750 million cubic feet a day of gas, or about 5.6 million tons a year of LNG, according to the presentation. Exxon and Energas already have customers for about 300 million cubic feet a day of gas including power plants, it said.
Energas is a consortium of large Pakistani businesses looking to secure long-term gas supply on preferential terms, including Yunus Brothers Group, which owns Lucky Cement Ltd., and Sapphire Group.
Pakistan said it saved more than $600 million over the first 10 years of a natural gas supply deal by pitting some of the world’s biggest sellers against each other.
A report from the state’s oil marketing company presented two weeks ago to a senate committee, and reviewed by Bloomberg News, details how the 2016 deal came together with Qatar, the world’s largest supplier of liquefied natural gas. It also sheds a rare light on such high-stakes energy deals, which are almost exclusively settled behind closed doors and stay hidden from public scrutiny.
The maneuvering by Pakistan came after two years of negotiations hit an impasse as Qatar refused to lower its offer price for LNG. So Pakistan sought leverage on the open market in late 2015, publicly seeking 120 cargoes in two large tenders, which brought in bids from suppliers including Royal Dutch Shell Plc and BP Plc.
While negotiations with Qatargas Operating Co. were under way, the tender was “issued to fetch maximum number of bidders and best price option,” the presentation said. “The strategy helped bring down prices with Qatargas and saved $610 million."
Pakistan then informed Qatar about the lowest bid, from Switzerland-based Gunvor Group Ltd., which the Middle East supplier agreed to match. Pakistan still purchased some LNG from Gunvor, awarding it the first tender. But the volumes it sought from the second tender ended up in the final Qatar deal, bulking it up by 25 percent.
The head of a senate committee now scrutinizing the deal, Mohsin Aziz, confirmed the details of the presentation in an interview last week. Pakistan State Oil Co. and Qatargas officials didn’t respond to requests for comment. Gunvor and BP declined to comment. Shell said it looks forward to future LNG options in Pakistan, without directly commenting on the tender.
The deal with Qatar, which was eventually settled for 3.75 million metric tons annually over 15 years, marked Pakistan’s emergence as an LNG buyer. The country turned to imports after its own declining production forced some factories to shut and caused blackouts. Imports have grown rapidly since early 2016, with Pakistan the seventh-largest LNG buyer globally in August, according to Bloomberg vessel-tracking data.
The Middle East was a bright spot for global liquefied natural gas demand in 2015. Now imports have plummeted so much that it could take a decade to recover.
Last year’s 37 percent slump and the prolonged negative outlook is in contrast to the region’s two-year LNG demand surge that outpaced global growth, according to BloombergNEF and ship-broker Poten & Partners Inc. data. The Middle East is now expected to make up less than 4 percent of global imports for at least eight years.
There are only five importers -- Egypt, Kuwait, Jordan, the United Arab Emirates and Israel -- of LNG in the Middle East. Bahrain is expected to join the group this year.
Why are LNG imports falling?
Gas finds in Egypt and the U.A.E. reduced the need for the liquefied fuel, and Jordan increased cheaper pipeline imports. “Domestic gas resources have been the main reason for LNG imports being subdued,” said Fauziah Marzuki, a senior associate at BNEF. Locally produced “gas will always be preferred over imports, within certain cost parameters of course.”
Which countries are leading the decline?
Egypt, the region’s biggest LNG importer in 2016 and 2017, will halt purchases this year and may resume exports thanks to surging domestic supplies from the giant Zohr field. Jordan will rely more on pipeline imports from Egypt, trimming its need for LNG. Bahrain, the only country that will add import capabilities in 2019, isn’t expected to reach meaningful volumes until 2022, according to BNEF forecasts.
Fizzling Gas
Liquefied natural gas imports in the Middle East had a record drop in 2018
What does this mean for Qatari exports?
Qatar, the world’s biggest LNG exporter, has boosted its position in the Middle East’s shrinking market since 2016. The exit of Egypt from the scene will likely erode that status. Almost half of Egypt’s imports came from Qatar last year. Still, the region isn’t a major market for Qatar and growth in Asia will more than offset declines in the Middle East.
How will this impact global markets?
Imports of LNG in the Middle East are dwarfed by Asia. Supply of the fuel -- driven by the U.S., Qatar and Australia -- is expected to rise almost 18 percent by 2030, and demand will grow more than double that rate. Even Kuwait, the region’s biggest importer, barely registers in global terms. Its imports are even less than the smaller markets in Asia such as Thailand, Bangladesh and Pakistan.
LNG Minnow
Middle Eastern countries to comprise just 3 percent of global demand in 2019
SINGAPORE: Pakistan's demand for liquefied natural gas (LNG) could more than triple in the next three to five years, the chief executive of Pakistan LNG said on Wednesday.
Last year, Pakistan imported nearly 7 tonnes of LNG, data from Refinitiv Eikon shows. This year, that could grow to as high as 15 million tonnes and to up to 25 million to 30 million tonnes over the next three to five years, said Adnan Gilani, managing director and chief executive of Pakistan LNG.
Pakistan LNG is a state-owned company that buys LNG from the international market to supply to the domestic market.
Both of the country's existing LNG terminals are currently nearly fully utilised. Another two are expected to announce a final investment decision this year.
Pakistan's two import terminals have a regas capacity of 1.2 billion to 1.3 billion cubic feet of gas per day, or about 9 million to 10 million tonnes of LNG a year, according to Gilani's presentation at the LNGA 2019 conference in Singapore.
Pakistan is expected to negotiate a few more long-term contracts to import LNG into the country, Gilani said.
Pakistan is facing a serious energy crisis with repeated blackouts and gas supply outages that led to the sacking of the heads of two of its main gas distribution utilities in January.
March 6, 2019 at 10:16 AM Delete
Khaleeq Kiani Updated April 27, 2019
https://www.dawn.com/news/1478633
Gas shortage to increase by 157pc next fiscal year
Khaleeq Kiani Updated April 27, 2019 Facebook Count
With an addition of 700,000 consumers last year, Pakistan’s gas shortfall is estimated to jump by 157 per cent to 3.7 billion cubic feet per day (bcfd) in fiscal year 2019-20 — almost equal to total gas supplies at present.
The estimates have been made by the Oil and Gas Regulatory Authority (Ogra) that put the gas shortfall increasing almost continuously every year to 6.6bcfd by FY2028.
In its flagship “State of the Industry Report 2017-18”, the authority noted that the (natural gas) demand-supply gap during FY2017-18 was 1,447mmcfd and that this gap was expected to rise to 3,720mmcfd by FY2019-20. The regulator put the total gas demand at about 6.9bcfd in fiscal year 2019-20 compared to total supplies of about 3.2bcfd.
It said the demand would increase to 7.7bcfd by 2024 but domestic supplies would fall substantially to 2.3bcfd, leaving a shortfall at 5.5bcfd. The shortfall would practically be about 3.6bcfd in FY2024 as the gap would be partially met by about 1.9bcfd of imported LNG.
The domestic gas production would continue to decline from about 3.3bcfd at present to less than1.6bcfd by 2028 while the gas demand would keep going up to reach 8.3bcfd by that year. Ogra estimated that despite the induction of all the import options, including LNG, Turkmenistan-Afghanistan-Pakistan-India (TAPI) and Iran-Pakistan (IP) pipelines, the total supplies would decline to 3.7bcfd by 2028, creating a net shortfall of about 4.6bcfd, more than total supplies at present.
The regulator said the gap was rising because of higher consumption in almost all the major sectors particularly power, domestic, fertiliser, captive power and industry as the supplies were not keeping pace with higher demand.
Both the gas utility companies added around 0.7 million domestic, commercial and industrial consumers, in their respective systems, during fiscal year 2017-18. Consumer addition is increasing the gap between demand and supplies, day by day. Especially in winter, the gas demand further increased and as a result the government is being forced to curtail supplies to various sectors.
Despite this, the natural gas is a major contributing fuel in the country’s energy mix. Its share in the primary energy mix is around 48pc.
There is a significant rise in demand and consumption of gas by residential and domestic consumers owing to price differential vis-a-vis other competing fuels, i.e. liquefied petroleum gas (LPG), fire wood and coal. The LPG presently accounts for about 1.3pc of the total primary energy supply in the country.
The current size of LPG market is around 1.3 million tonnes per year. The LPG consumption has increased by 5.88pc in 2017-18 compared to the previous year.
LPG consumption during FY2017-18, stood at around 3,508 tons per day. Local production catered for around 58pc, the rest was imported.
The share of re-gasified LNG in the overall gas supply increased to 23pc in FY 2017-18. The total gas consumers were more than 9.2m by the end of FY2017-18, including 6.3m in the SNGPL network and 2.9m in the SSGCL network.
The power sector was the main consumer of natural gas during FY 2017-18, consuming 37pc, followed by domestic sector 20pc, fertiliser 17pc, captive power 10pc, industrial sector 9pc, transport 5pc, and commercial sector having 2pc share.
Punjab had the highest 50pc consumption, followed by Sindh 39pc, Khyber Pakhtunkhwa 9pc and Balochistan 2pc. Natural gas supplies during the year stood at 4.357bcfd, of which Sindh supplied 50pc, whereas Khyber Pakhtunkhwa, Balochistan and Punjab supplied 12, 11 and 4pc respectively. The remaining 23pc of gas was imported in the form LNG.
Eni and PetroChina’s Singapore unit were joined by the trading arm of Azeri state oil company SOCAR and commodities trader Trafigura in placing offers, the sources said.
Pakistan LNG, the state-owned company that issued the tender, declined to name any bidders.
“The technical bids for our long-term LNG supply tender were received and opened yesterday. Evaluations are underway,” it said.
SOCAR Trading SA confirmed it had bid. Trafigura said it does not comment on tenders. A spokesperson noted Trafigura was a stakeholder in the terminal due to receive the tendered LNG.
“Trafigura owns 150 (million cubic feet a day) of LNG import capacity in that facility, which is key to its plan to supply LNG and gas to Pakistan’s private sector,” the spokesperson said.
PetroChina, one of the largest buyers of liquefied natural gas (LNG) in the key LNG demand growth market, has offered the lowest bid in an LNG tender in Pakistan, in a sign that the Asian market continues to be oversupplied even after the winter heating season began.
According to the documents from the latest Pakistan LNG tender, PetroChina International Singapore offered the lowest bid at a price slope—that is a percentage of the Brent oil contract—of 8.594 percent, for a delivery window on February 16-17. PetroChina beat commodity traders Gunvor and Trafigura and the trading arm of SOCAR to the lowest bid in the Pakistani tender.
It’s not certain if Pakistan will award this tender, because it sometimes chooses not to buy. But the fact that China is offering LNG so cheaply points to the persistent LNG glut on the Asian markets.
According to Bloomberg, this was at least the second time in which PetroChina has offered the lowest bid in an LNG tender in Pakistan.
This year, Asian spot LNG prices are at their lowest ever for this time of the season.
Last week was the first week since October in which spot LNG prices in Asia increased week on week. Asian LNG spot prices for delivery in January rose to US $5.65 per million British thermal units (MMBtu) last week, up by 15 cents from the previous week, trading sources told Reuters.
Still, prices were at their lowest for this time of the year, because of ample LNG supply and tepid demand growth with milder weather earlier in the heating season.
While the lower LNG prices create some demand in India, for example, overall demand in Asia this winter is certainly not growing at the record-breaking pace of the past three years. The reason—supply is more than enough, as new volumes continue to come out of the U.S., Australia, and to an extent, Russia.
Last month, a Singaporean buyer of a U.S. cargo of LNG canceled the loading, as both Asia and Europe are facing an LNG glut. Some other customers of U.S. LNG cargoes are also reportedly considering paying for those cargoes but not loading them, traders have told Reuters.
By Tsvetana Paraskova for Oilprice.com
https://twitter.com/haqsmusings/status/1224492778370945024?s=20
Platts Analytics expects modest growth in inflows in 2020
JKM has fallen more than 40% since the beginning of 2019
No new regasification capacity to be commissioned this year
Pakistan may take advantage of low spot prices and boost LNG imports in 2020 to meet the country's growing demand for fuels amid declining output at home, but infrastructure constraints mean the South Asian country will only post a modest growth in inflows, analysts told S&P Global Platts.
With Pakistan turning out to be one of the fastest growing LNG markets since it first started importing in 2015 -- imports rose to 8.4 million mt in 2019 from 6.8 million mt in 2018 -- there was an urgent need to speed up import capacity expansions, which have been planned in order to absorb incremental inflows, they added.
"Pakistan represents a market that could take advantage of the low spot price environment and import more LNG to feed its growing natural gas demand. However, imports are close to capacity and have limited ability to grow significantly," said Jeff Moore, manager, Asian LNG Analytics, at Platts Analytics.
He added that Platts Analytics expects only a modest growth in imports in 2020 from 2019 levels.
"The underlying driver for LNG consumption growth in Pakistan has been a declining base of domestic production along with new import infrastructure, as the country has brought in two FSRUs, both at Port Qasim," Moore said.
The benchmark for spot Asian LNG prices, JKM, has fallen more than 40% from the beginning of 2019 to about $5.20/MMBtu by the end of the year due to a wave of new supply from Australia and the US, and slowing demand growth in China.
Meanwhile, the DES West India assessment, which is a relatively better reflection of prices in the Indian subcontinent, was lower by more than 41% from the beginning of last year at $4.80/MMBtu toward the end of 2019.
The spot Brent slope, which is obtained by dividing the Brent crude oil price by the spot LNG price, also declined last year, prompting Pakistan LNG Ltd. to issue fresh tenders to seek cargoes at lower Brent slope prices. The average spot Brent slope also dropped, to 8.70% in 2019 from 13.70% in 2018, Platts data showed.
"Although Pakistan represents an important market with an appetite to increase imports given the expectation for low JKM prices this year, the scope to grow imports sharply is limited in 2020," Moore said.
New wave of capacity expansion
Platts Analytics forecasts LNG imports to pick up to 12.4 million mt in 2021 if Pakistan can bring in another floating storage and regasification unit relatively quickly, and imports are expected to exceed 17 million mt by 2025. This will help underpin growing gas demand as well as offset declining production.
Pakistan is now moving toward the next phase of LNG import capacity expansion with government approvals for five new terminals, while also taking steps to further liberalize its natural gas sector through third-party access to distribution infrastructure.
According to government officials, the private sector has recently been allowed to set up five more LNG terminals, in addition to the two FSRU-based import facilities in operation.
"The broad trend is that Pakistan's gas demand in the next couple of years will be driven by the power sector," said James Waddell, senior global gas analyst at Energy Aspects.
https://tribune.com.pk/story/2263143/a-good-sized-gas-discovery-in-kalat
The hefty energy imports cost the country an approximate $15-16 billion annually, which puts great pressure on the foreign exchange reserves.
But the days of burning precious foreign exchange to fuel wheels of economy may have come to an end with this latest discovery.
In an interview, PPL Managing Director Moin Raza Khan told The Express Tribune, “Last year in December, we made a good-sized discovery in the Kalat Plateau in the deeper part of Balochistan. Our gas column is huge, slight less than 1km.”
As per initial estimates, the size of gas reserves is around one trillion cubic feet.
Explaining what constitutes a good discovery, Arif Habib Limited (AHL) Head of Research Tahir Abbas told The Express Tribune, “Our local gas production is around 3.7 bcf; so any discovery with a size of 10% of our total annual production [or more] would be a slightly big discovery.”
“When we drill more appraisal wells, we can give an exact figure but based on the map that we have prepared and based on the column of gas that has come, the volume is close to one trillion cubic feet,” the PPL MD added.
Sharing details, he said that the column had around 55% of hydrocarbons and though they would have to set up a lot of plants, he was of the view that “this discovery has opened a new petroleum play in the country”.
“We are going to drill another well soon, probably in the next six or seven months. But because of the location of the field, it is difficult to develop it at the pace we would have desired.”
Raza said that this was not just a single discovery but there were many other structures as well. “The hydrocarbon habitat has been confirmed,” he said, adding that once the gas discovery was made, chances of success increased.
“PPL’s Margand findings are a landmark discovery. There will be a string of discoveries after this in this region.”
Slowdown in discoveries
Pakistan’s gas production has stagnated at around four billion cubic feet per day (bcfd) against an unconstrained demand for over 6 bcfd. To meet the shortfall, the government initiated LNG imports.
Natural gas is the country’s main source of fuel, accounting for most of the energy consumption but most of it still remains untapped. In fact, over the years gas production has been declining due to insufficient investment and regulatory challenges.
“In Pakistan, so far we have discovered gas equivalent to 10.8 billion barrels of oil and in case of oil we have discovered around 1.5 billion barrels,” said Raza.
Sharing the current situation, the AHL head of research said that Pakistan’s gas reserves as of December 2019 stood at 20,884 bcf, which means “we have just 16 years of gas reserves available”.
Abbas said that since “we have not had any major discovery in the past 15 to 20 years, there has been a slowdown in gas production”. Tal block was the last major discovery in 2002, he added.
“We have a significantly lower reserves replacement ratio because we have not made any major discovery in the past 15 to 20 years.”
Echoing similar remarks, Raza said that over the years many discoveries have been made, such as Uch, Mari, Kandhkot and Adhi to name a few, and are still being made but the size of those discoveries is decreasing.
After the discovery of Sui gas field, exploration activities kicked off in full swing and from 1952 to 1960, 4.9 billion barrels of oil equivalent gas had been discovered, he added.
“So, about 45% of the gas discovered in Pakistan was already found within 10 years after the Sui discovery.”
After 1960, the curve somewhat flattened but further exploration activities started and “we kept adding to the overall reserves”.
Earlier, it was planned that the entire project will be executed with Russian funding, but after Supreme Court decision on the GIDC, the government of Pakistan has decided to provide maximum funding to the project. Now it has been decided that Pakistan’s share in the equity will increase to 76 percent while the Russian share will be 24 percent, said the source. Similarly, initially it was proposed that the pipeline of 1,100 kilometres was to be laid with a diameter of 42 inches with capacity to transport 1.2 billion cubic feet RLNG per day, however now Pakistan wants to increase of the pipeline to 1.6 bcfd with a diameter of either 52 inches or 56 inches.
The Russian delegation comprised of representatives from Ministry of Energy of Russian Federation, Embassy of Russian Federation in Pakistan and other Russian companies and corporations. The Pakistani side included representation from Ministry of Energy (Petroleum Division) of Pakistan, Ministry of Foreign Affairs, and Law and Justice Division and Inter State Gas Systems (Private) Limited. The talks were also attended by Minister for Energy and Special Assistant to Prime Minister on Petroleum.
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Pakistan and Russia have agreed to increase Islamabad’s share in the equity of North South Gas Pipeline (NSGP) (renamed to Pakistan Stream Gas Pipeline) to 76 percent while Moscow will fund 24 percent.
Similarly, it has also been agreed to rename the project from North South Gas Pipeline Project to Pakistan Stream Gas Pipeline (PSGP) Project.
The final approval to the proposed amendments in the inter-governmental agreement (IGA) on North South Gas Pipeline (NSGP) will be given in the 8th session of Pakistan-Russia JCC on NSGP project in December, official source told The Nation.
The Ministry of Energy (Petroleum Division) of Pakistan and Ministry of Energy of the Russian Federation held first Russia-Pakistan Technical Committee meeting from 16th to 18th November 2020 here on mutual cooperation for the development of North South Gas Pipeline Project.
Both sides agreed to sign a protocol for amendment in the Inter-Governmental Agreement (IGA) earlier signed in 2015 between both the governments to reflect the revised implementation structure of the project after requisite approvals from respective governments. The parties agreed in principle to implement the project through a special purpose company to be incorporated in Pakistan by Pakistan and Russian parties, wherein Pakistan will have the majority shareholding.
Pakistan will start building a 1,100 kilometer (684 miles) pipeline in July with Russia that will allow the South Asian nation to operate more liquefied natural gas terminals.
The South Asian nation will have a majority share of 51% to 74% in the project, while Russia will own the remainder, Nadeem Babar, petroleum adviser to the prime minister, said in an interview on Dec. 14. Pakistan’s gas distribution companies Sui Southern Gas Co. and Sui Northern Gas Pipelines Ltd., which have started acquiring land for the pipeline, will be a part of the project, while a Russian consortium will lead construction.
Pakistan has become one of the top emerging markets for the super-chilled fuel in recent years as domestic gas production has plateaued, forcing the nation to import cargoes. The nation has also auctioned a record 20 oil and gas blocks to encourage exploration activity, with bids expected by mid-January, said Babar.
Pakistan, which imported its first cargo five years ago, currently has two LNG terminals. It’s running the two terminals at capacity to meet peak winter demand, with 12 cargoes secured for December and 11 for January, Babar said. Two more LNG terminals, Energas and Mitsubishi’s Tabeer Energy, are expected to start in the next few years.
Pakistan has LNG deals for 700 million cubic feet a day and Prime Minister Imran Khan’s government will decide if the nation needs another medium-term LNG contract for five years after reviewing demand from power generators, the biggest consumers of the fuel, in the next three months, said Babar.
The nation has also decided that it will only import cleaner Euro-5 diesel from January after doing the same for gasoline earlier this year. Besides imports, Pakistan also plans to add 150 million cubic feet a day of domestic gas output this month, including 50 mmcfd from the Mari gas field, Babar said.
Special Assistant to Prime Minister (SAPM) on Petroleum Nadeem Babar said on Friday that Pakistan would save an amount of around $3 billion in the import of Liquefied Natural Gas (LNG) under a 10-year agreement signed with Qatar at 10.2pc of the Brent, which would be effective from January 2022.
“Today we have signed a very important agreement with Qatar. Our earlier agreement [signed by the PML-N government] with Qatar was of 13.37pc of the Brent, under which an average five cargoes arrive every month. But, we [the PTI government] gave inked the deal at 10.2pc of the Brent,” he said while sharing with media details of the agreement, which was signed in the presence of Prime Minister Imran Khan at the PM House.
This contract, he said, was “almost 31pc lower” as compared to the previous agreement signed by the Pakistan Muslim League-Nawaz (PML-N) government.
“It is a 10-year agreement and the price can be renegotiated after a period of four years,” he informed, adding that the existing agreement was of 15 years, under which the price was fixed for a period of 10 years.
While Pakistan’s dependence on overseas shipments of the fuel have ballooned since imports began in 2015, insufficient infrastructure has made it difficult to deliver the fuel to more remote parts of the country. The government and Russia are planning a domestic pipeline that connects Pakistan’s southern LNG terminals to the energy-hungry north, but the project has been delayed several years and won’t begin construction until later this year.
Door-to-door deliveries of LNG via trucks has increasingly allowed importers to leapfrog infrastructure bottlenecks and has helped boost demand for the fuel globally. The network could help places like the land-locked Punjab prefecture, where major industries such as fertilizer, textile, cement, face gas shortages.
LNG Easy, which operates in Myanmar, Singapore and Malaysia, will begin transporting LNG from Pakistan’s ports from August. PetroChina Co. will be the main LNG supplier, although the company has also signed purchase agreements with Trafigura and Malaysia’s Petroliam Nasional Berhad and is in talks with QatarGas to buy LNG fixed to the price of crude oil, said Hamid.
The company sees additional growth opportunities across South and Southeast Asia, in countries including Bangladesh, Vietnam and the Philippines, according to its website.
Pakistan and Russia have signed an agreement for the construction of about 1,100-km gas pipeline from Port Qasim in Karachi to Lahore at an estimated cost of USD 2.5-3 billion by the end of 2023, according to a media report on Friday.
The Heads of Terms (HoTs) of shareholders' agreement was signed on Thursday after four days of talks, the Dawn News reported. The two sides also signed minutes of the third meeting of the Russia-Pakistan Joint Technical Committee (JTC) for implementation of the Pakstream Gas Pipeline Project commonly known as North-South Gas project.
The two sides agreed over 74:26 per cent shareholding in the special purpose vehicle (SPV) for the project. This envisages both put option' and call option' to Russian side which means its entities can move out of the project if it is not found feasible or increase its shareholding to 49 per cent if it is able to provide attractive financing arrangements acceptable to Pakistan. In any case, Pakistani entities will maintain majority shareholding.
The Russian side will arrange funding for foreign exchange components through suppliers' credit or typical project financing to cover imported items like steel, consultancies, pipelines and related products and materials not available in Pakistan. The concession agreement for the pipeline will remain effective for 25-30 years. The pipeline size was agreed at 56-inch diameter to cater for next 30-40 years of energy needs in the country that will ensure 700-800 million cubic feet per day (mmfcd) of free gas flow which can go up to 2,000mmcfd with compressors.
The next steps will be the signing shareholders' agreement, financial agreement, gas transportation agreement and lenders agreement during which time the Russian side will complete the front end engineering design (FEED) and the Pakistani side will arrange dollar financing of local currency component against Rs321bn worth of Gas Infrastructure Development Cess.
The two sides committed to expeditiously implement the project to meet the emerging energy security scenario of Pakistan to ensure investment commitments by coming LNG terminals, the Pakistani daily reported.
At the signing ceremony in Islamabad, Pakistani side was led by Petroleum Division Secretary Arshad Mahmood while Deputy Director of Department of Foreign Economic Cooperation and Fuel Markets Development of Russian Ministry of Energy Alexander Tolparov led the visiting team.
Nation’s gamble that spot prices would fall fails to pay off
Global supply crunch has boosted rates from Europe to the U.S.
Cash-strapped Pakistan’s bet that liquefied natural gas prices would go down has failed, forcing the South Asian nation to pay more than ever for the power plant fuel or risk blackouts.
Pakistan LNG this week bought four cargoes for September delivery at around $15 per million British thermal units, the highest since the nation began imports in 2015, according to people with knowledge of the matter. The importer scrapped a tender for September cargoes that closed earlier this month in a gamble that prices would fall.
https://finance.yahoo.com/news/1-pakistan-lng-gets-single-155843872.html?soc_src=social-sh&soc_trk=tw&tsrc=twtr
ISLAMABAD, June 23 (Reuters) - Pakistan LNG Ltd (PLL) received a single bid from Qatar Energy at $39.80/mmbtu for an LNG import tender seeking a cargo in the July 30-31 window, an industry source said on Thursday.
The source said no bids were received for three other deliveries sought in July, which was later confirmed by documents uploaded on PLL's website.
The source added that PLL had decided not to pick up the costly bid.
A spokesman for Pakistan's power ministry, under which PLL operates, did not immediately respond to a Reuters request for comment.
Pakistan had sought four cargoes from international suppliers during the windows of July 3-4, 8-9, 25-26 and 30-31.
Pakistan unsuccessfully tapped the spot market earlier this month for an extra July cargo, with two tenders not returning valid bids.
In recent years Pakistan has increased reliance on LNG for electricity generation, but is facing widespread power outages as procurement of the chilled fuel remains unreliable and expensive.
https://pakobserver.net/10707-km-pipelines-being-laid-to-reinforce-gas-transmission-network/
The two state-owned companies, SNGPL and SSGC, are in process of laying almost 10,707-kilometer pipelines to reinforce gas transmission networks in their operational areas across the country during the current fiscal year.
The Sui Northern Gas Pipelines Limited (SNGPL) would place 9,605 kilometers and Sui Southern Gas Company (SSGC) 1,102 transmission and distribution pipelines in their respective areas during 2022-23 aimed at improving the efficiency of the commodity supply to domestic, industrial, and commercial consumers.
The companies would collectively spend funds amounting to Rs 113.899 billion on the upgradation of the gas transmission and distribution system. “The SNGP and SSGC have planned to invest Rs 27,669 million on transmission projects, Rs 77,484 million on distribution projects, and Rs 8,746 million on other projects bringing the total investment of Rs 113,899 million during the fiscal year 2022-23,” according to an official document available with APP.
The available statistics indicated that Pakistan has an extensive gas network with more than 13,513 KM transmission, 155,679 KM distribution, and 41,231 KM service gas pipelines for cater to the requirement of millions of consumers.
The companies are also executing at least three strategic projects to supply gas to two Special Economic Zones (SEZs) and an industrial park in their respective areas to boost industrial production.—APP
https://www.gastopowerjournal.com/markets/item/13377-pakistan-plans-to-push-coal-fired-power-to-10-gw-shift-away-from-gas
Soaring fuel prices have made Pakistan move away from importing LNG and use domestic lignite to generate electricity instead. “LNG is no longer part of the long-term plan,” Pakistan’s energy minister Khurram Dastgir Khan told Reuters, revealing targets to increase coal-fired capacity to 10 GW, up from currently 2.31 GW, and build no more gas-fired power plants.
https://www.naturalgasworld.com/pakistan-floats-two-tenders-for-spot-lng-cargoes-105642
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The federal government issued two tenders seeking spot liquefied natural gas (LNG) cargoes for the first time in nearly a year on Tuesday, while also announcing a deal that will see Azerbaijan provide the country with one LNG cargo per month.
https://www.dawn.com/news/1759531
Dependent on gas for power generation and running short of foreign exchange to pay for imports, the country has struggled to procure spot cargoes of LNG after global prices spiked last year following Russia’s invasion of Ukraine, leaving it to face widespread power outages.
But Asian spot LNG prices this year have eased from record highs of $70 per million British thermal units (mmBtu) hit in August, and are now trading below $10.
Pakistan LNG, a government subsidiary that procures LNG from the international market, has one tender seeking six cargoes on a delivered-ex-ship (DES) basis to Port Qasim in Karachi in October and December, according to the tenders posted online.
The delivery windows are October 5-6, 20-21 and 31, and December 7-8, 13-14 and 24-25. The tender will close on June 20.
Pakistan LNG’s second tender seeks three cargoes, also on DES basis to Port Qasim, for delivery windows of January 3-4, 28-29 and February 23-24. The second tender closes on July 14.
Pakistan LNG last issued a tender seeking 10 spot cargoes in July 2022, but received no offers.
Separately on Tuesday, Minister of State for Petroleum Musadik Malik told a news conference that Azerbaijan will supply an LNG cargo every month to Pakistan at a “cheaper price”.
He did not share details on the supply deal, but said that a contract had already been signed with Azerbaijan and that it will “start soon”.
Pakistan has two long-term supply deals with Qatar, one signed in 2016 for 3.75 million metric tons of LNG a year, and another signed in 2021 for 3m metric tons a year.
It also has an annual portfolio contract with ENI for 0.75m metric tons a year.
In 2022, Pakistan’s imports of LNG slowed to 6.93m metric tons for the year, down from 8.23m metric tons in 2021, according to data from data analytics group Kpler.