Pakistan secures 3 bids for spot LNG cargoes

A total of four bids were received and three were declared the lowest.

For the first delivery window of April 27-30, TotalEnergies submitted the lowest bid of $18.88 per mmBtu. Vitol Bahrain’s bid of $18.54 was declared the lowest for the May 1-7 window, while OQ Trading was declared the lowest bidder at $17.997 per mmBtu for delivery between May 8 and 14.

A day earlier, PLL had floated urgent tenders for the import of three LNG cargos for delivery between April 27 and May 8 amid rising temperatures and power shortfall.

The PLL had set April 24 (Friday) as the deadline for bids to be opened the same day, given the emergent needs to meet power demand, which was short of supply by more than 4,500MW in peak, resulting in six to seven hours of loadshedding.

The tender came following Qatar’s reluctance to send LNG-loaded cargoes stranded in the Gulf due to the closure of the Strait of Hormuz. Qatar’s three LNG cargoes meant for Pakistan had earlier returned from the vital waterway due to security reasons.

All three cargoes will carry 140,000 cubic meters of LNG delivered ex-ship (DES). Each cargo to Pakistan of this size typically means around 100 million cubic feet per day (mmcfd).

Last month, the Oil and Gas Regulatory Authority (Ogra) had notified a massive 19-22 per cent increase in the price of regasified liquefied natural gas (RLNG) to $12.50-$14 per mmBtu for sales at the distribution stage by the two Sui gas companies for the month of March.

This was mainly because of an increase in terminal charges amid lower import molecules and a minor increase in import price, the dataset from the authority showed.

The basket RLNG price was based on a total of only two cargoes in March against eight cargoes each in February and March 2026 due to a force majeure declared by Qatar after its gas facilities came under attack and the closure of the Strait of Hormuz.

Both cargoes were imported under two LNG contracts between PSO and Qatar Gas at an average of about $7.68 per mmBtu (DES price), compared to $7.45 per mmBtu last month, but still significantly lower than $8.9 per mmBtu in March last year.

PLL, one of the public sector entities responsible for LNG imports, did not import any cargo last month. In fact, it had imported one cargo a couple of months ago after a gap of almost a year at the rate of $7.65 per mmBtu through its old contract with a private entity.

The PLL, established almost a decade ago for LNG imports, had become redundant and a net burden on public money as it could not import energy over the past year despite its executives and board of directors enjoying hefty remunerations and associated perks and privileges. It had last floated an LNG tender in December 2023 for delivery in January 2024, but later cancelled the tender.

Facing criticism over loadshedding even before the summer months, the power division placed an order with the petroleum division to arrange around 400 mmcfd of LNG for power generation, amid hopes for the opening of international supply routes.

LNG imports had stopped early last month after the closure of the Strait of Hormuz following US-Israel attacks on Iran. Last month, Qatar declared force majeure on all its global LNG contracts, including those with Pakistan.

Sources said that in the middle of an electricity shortfall, the power division made an urgent call for support from all stakeholders for the purchase of LNG cargoes, after it learned of the possibility of Pakistani-flagged ships passing through the Middle Eastern chokepoint.

However, this did not materialise immediately.

Sources said the power shortfall would keep on increasing as temperatures rise in the coming days, and it would be nearly impossible to stabilise the national grid without major power plants, particularly the LNG-based plants in Punjab, which has a total generation capacity of around 6,000MW.

On top of that, the utilisation of high-speed diesel (HSD) and even furnace oil at current market prices could push fuel costs through the roof.

In that case, even one or two cargoes from the open spot market, the sources added, could be economically viable in the greater power mix when compared to diesel and furnace oil.

“With the onset of the summer season, electricity demand has started to rise significantly across the country. In this regard, the availability of RLNG remains critical for ensuring optimal power generation and maintaining system stability,” the Power Division wrote to the Petroleum Division.

It highlighted that any shortfall in RLNG supply would necessitate increased reliance on expensive alternative fuels such as HSD.

“This would not only result in a substantial increase in the overall cost of generation but would also lead to prolonged hours of load management, thereby increasing the fuel cost adjustment (FCA) burden on end consumers,” the Power Divison explained.

All four mega LNG plants of the federal and Punjab governments, along with the medium-sized Nandipur plant, can use HSD as an alternative fuel; the generation price difference is normally more than Rs25 per unit, which is estimated to be higher at present, given volatile oil prices changing weekly.

These plants are also required for system stability for the evacuation of surplus power from the southern part of the country.

To ensure smooth system operations and avoid the aforementioned impacts, the power division has also provided a detailed weekly forecast of RLNG requirements — segregated for solar and non-solar hours, along with average demand — prepared for the National Grid Company (NGC) system.

“Furthermore, K-Electric (KE) has also conveyed its RLNG requirement for the KE system,” the Power Division said, formally requesting the Petroleum Division to manage and allocate the Qatar-contracted cargoes in a manner that ensures the availability of RLNG in line with the demand plan for both the NGC and KE systems, thereby supporting uninterrupted and cost-effective power generation.

Officials said the cost of HSD-based generation, which previously exceeded Rs45 per unit before the US-Israel strikes on Iran, might now have risen beyond Rs80 per unit.

However, it is also challenging at present to consider HSD for power generation due to its high cost and its critical demand in transport and agriculture, especially with the crop harvest in its last leg.

Summer peak dem­and typically rises beyond 28,000MW, compared to the current 19,000–20,000MW during peak hours and below 10,000MW in the daytime, partly due to greater dependence on solar power. While solar energy has helped reduce grid demand, many consumers shift back to the grid after sunset.