Pakistan Turns Down Attractive LNG Spot Bids Hoping For Cheaper Qatari Imports

Pakistan on Thursday decided not to approve the lowest bids submitted for two spot LNG cargoes despite receiving competitive offers from international suppliers, amid indications the country may secure LNG supplies from Qatar under long term contractual arrangements at significantly lower prices.

In this regard, Pakistan LNG Limited informed the two lowest bidders, BP Singapore and TotalEnergies Gas & Power Limited, that their offers had not been accepted.

According to officials familiar with the development, the decision appears linked to positive signals from Qatar regarding the availability of two LNG cargoes that could be routed through the Strait of Hormuz.

Sources said Qatar had earlier shown reluctance in supplying additional LNG cargoes to Pakistan due to fears surrounding regional security risks and possible disruption to shipping routes through the Strait of Hormuz. However, recent geopolitical developments and Pakistan’s evolving diplomatic role in the region are believed to have improved confidence regarding LNG transportation.

The development comes after Pakistan returned to the global spot LNG market for the first time since December 2023 amid fears of supply disruptions caused by the Iran conflict and shipping uncertainty in the Gulf region.

Last month, Pakistan accepted one LNG cargo at a relatively high price while rejecting other expensive spot offers as authorities hoped regional tensions would ease and long term Qatari supplies would normalize.

Earlier this month, Pakistan issued emergency tenders for LNG cargoes after fears of supply shortages intensified due to disruptions linked to the Strait of Hormuz crisis and reduced availability of Qatari cargoes.

Energy markets across Asia have remained under pressure in recent months after tensions involving Iran disrupted shipping activity through the Strait of Hormuz, a critical global energy corridor through which around 20 percent of global LNG and oil supplies normally pass.

Pakistan, which relies heavily on imported LNG and Gulf energy supplies, has been particularly vulnerable to the regional crisis. Authorities have been attempting to avoid costly spot market purchases due to pressure on foreign exchange reserves and the country’s import bill.