Pakistan eyes 'most favourable' LNG agreement with countries including Russia

In its bid to address the energy crisis, the government is considering signing a liquefied natural gas (LNG) purchase agreement with different countries including Russia.

The government “will go for the most favourable deal,” the Ministry of Energy said in a statement, reported Bloomberg. The South Asian country is considering a government-to-government agreement to import LNG, added the report.

The development comes at a time when most countries are refraining from maintaining trading ties with Russia due to sanctions imposed on the country in the wake of President Vladimir Putin’s invasion of Ukraine.

However, Reuters reported earlier in May that Russia became the fourth-largest oil supplier to India in April, with volumes set to rise further in coming months as low prices spur demand from the world’s number 3 oil consumer and importer, according to tanker tracking data.

Read the story here: Russia jumps to 4th position as oil supplier to India

Earlier, ex-Energy Minister Hammad Azhar had said that the previous government wanted to purchase petroleum products from Russia at a discounted rate.

The development comes as Pakistan faces electricity blackouts due to a fuel shortage. Last week, the federal government arranged four additional cargoes of LNG and five cargoes of furnace oil to solve the shortage of fuel for power generation.

Minister for Power Khurram Dastgir Khan then said the incumbent government has procured the LNG as per the needs of the country, but at higher prices, because the "previous rulers did not bother to arrange the fuel well in time".

Meanwhile, Prime Minister Shehbaz Sharif, who was appointed after Pakistan Tehreek-e- Insaf (PTI) Chairman Imran Khan was ousted last month through a no-confidence motion, eyes to grab long-term LNG agreements to help reduce fuel costs, as long-term deals are much cheaper than current spot rates, said Bloomberg.

Being a net importer, Pakistan's economy has been hit hard by the ongoing energy price hike in the international market owing to the Russia-Ukraine conflict.

Rising fuel costs have already added to the country's bulging import bill that reached $65.53 billion in 10MFY22 from $44.73bn over the corresponding months of the previous year, an increase of 46.51%.

Meanwhile, Pakistan’s LNG import has jumped up by 83% to $3.7 billion in the 10 months ended April, revealed the government statistics.