Pakistan LNG seeks more cargoes through emergency tender

SINGAPORE: Pakistan LNG is seeking three liquefied natural gas (LNG) cargoes through an emergency tender, its second this week, as the country grapples with gas shortages, industry sources said.

Record high spot LNG prices due to freezing temperatures in North Asia are forcing emerging economies such as Pakistan to ration gas and seek alternative fuels.

Shipping constraints and the sudden spike in spot prices mean some suppliers have not been able to meet delivery timelines.

Pakistan LNG, a government subsidiary that procures LNG from the international market, is seeking three cargoes for delivery over March 11 to 12, March 18 to 19 and March 24 to 25 in a tender that closes on Jan. 26 and is valid for the same day, two sources said.

It had issued an emergency tender earlier this week for two cargoes to be delivered in February, after at least one supplier was unable to deliver a scheduled cargo.

Pakistan's energy ministry said in a statement on Friday it has arranged one LNG cargo for February delivery.

The ministry said the price of the February cargo was about 22% lower than the price an earlier bidder had offered, and later withdrawn, for the same cargo. It did not specify the name of the seller.

Sources however said the cargo was awarded to Qatar Petroleum Trading, which had placed the lowest offer at a percentage of the Brent crude oil futures price, known as a slope rate, of 16.33%, for delivery over Feb. 25 to 26, the sources said.

Commodity trader Vitol had placed the lowest offer for a cargo to be delivered over Feb. 21 to 22 at a slope rate of 19.55%. That cargo, however, was not awarded, they said. The reason was not immediately clear.

With spot prices falling as temperatures get warmer, prices for cargoes to be delivered in March are expected to be lower, traders said, which could be encouraging more buying.