SINGAPORE: Pakistan LNG said in a statement on Saturday that a supplier of liquefied natural gas (LNG) was unable to deliver a spot cargo into the South Asian country in February, after earlier submitting the lowest offer in a buy tender.
In late December, Pakistan LNG closed a tender to buy two LNG cargoes for delivery in February.
The second cargo, to be delivered in the last week of next month, was awarded to the lowest bidder, who later told Pakistan LNG it was unable to make the delivery, the Pakistan company said without naming the firm.
A tender document posted on Pakistan LNG's website indicates that Emirates National Oil Company (ENOC) had made the lowest offer on the second cargo. ENOC and Pakistan LNG did not immediately reply to a request for comment.
Pakistan LNG said in its Saturday statement it had approached the second- and third-lowest bidders within the bid validity period and they also declined to make a delivery.
"This bid default of the suppliers is associated with the recent supply shortages leading to high price volatility in the spot market coupled with extra buying in North Asia," Pakistan LNG said.
ENOC's offer for the cargo to be delivered over Feb 23 to 24 was at a percentage of the Brent crude oil futures price, known as a slope rate, of 20.8483%.
This works out to about just above $11 per million British thermal units (mmBtu). Spot Asian LNG prices rose to a record high of $32.50 per mmBtu last week for a cargo delivered in February.
The tender closed on Dec 28 and had a validity period to Jan 11, according to the tender document. The document also said that bidders withdrawing from the tender during the validity period would forfeit a $300,000 bond.
Logistical challenges due to limited LNG tanker availability and record high spot prices has meant that some suppliers have not been able to deliver cargoes on time, a Singapore-based trade source said.
Pakistan LNG, a government subsidiary that procures LNG from the international market, said it is taking all measures including the forfeiture of bid bonds against the company that failed to supply the cargo.