KARACHI: Pakistan will import liquefied natural gas (LNG) at the highest ever price of $30.65 per mmbtu (Million British Thermal Units) from Qatar Petroleum for late November delivery to avert a looming gas crisis in the winter month of December. 

Pakistan LNG Limited (PLL) documents seen by Arab News showed the bid price. The contract has been awarded to Qatar Petroleum Trading Company, PLL confirmed.

Last week, media reported that PLL was seeking two liquefied natural gas cargoes for delivery in November through an emergency tender after its term suppliers canceled delivery of cargoes. Commodities trader Gunvor could not supply the cargo because of force majeure at Equatorial Guinea’s LNG plant. Italian energy group ENI could not deliver a cargo due to a default by its backend supplier.

A PLL official said the company was “engaged with both suppliers [Gunvor and ENI] as per the contractual provisions.” 

A sharp increase in gas prices has caused power shortages in many parts of the world, including China, amid a global energy crunch.

In response to the tender floated for two cargoes, Vitol Bahrain submitted the lowest bid at $29.89 per mmbtu for deliveries on November 19-20, 2021, while Qatar Petroleum submitted a bid at $30.65 per mmbtu for deliveries on November 26-27, bidding documents posted on the PLL website showed. 

As the bids were invited for cargoes to be supplied between Nov 19-20 and Nov 26-27, PLL decided not to entertain the bids submitted by Vitol Bahrain as the country needed deliveries for December utilization when the country expects a sharp mercury drop, the PLL official said.

Analysts say the impact of higher priced imported cargo when blended with the existing stock would be averaged at around $14-15 per mmbtu. 

“Pakistan would have around 9 cargoes ... the price impact would be around $14-15 per mmbtu for local consumption,” Samiullah Tariq, Director Research at Pakistan Kuwait Investment, told Arab News on Sunday. 

Pakistan meets more than half of its LNG requirement through long-term import contracts while the gap is met through spot cargo purchases. 

The situation is expected to improve in January 2922 when a new 10-year deal between Pakistan and Qatar is expected to be materialized for the supply of around 200 mmcf. 

Pakistan’s estimated annual demand growth for gas is expected to be around 100-200 mmcfd.