ISLAMABAD: Caretaker Power Minister Muhammad Ali said on Thursday gas would only be available for eight hours in homes this winter amid depleting natural reserves in the country, while two LNG cargoes confirmed for December would resolve supply problems of industries to a “large extent.”
Energy imports make up the majority of Pakistan’s external payments as Islamabad faces an economic crisis with an acute balance of payments problem, risking a default on its external debt.
Pakistan is heavily dependent on gas for power generation but has had to slash their imports of LNG after prices rocketed on a surge in Europe’s demand to replace Russian supplies following the Ukraine war.
“There will be load shedding [of gas] this year also in homes, we don’t have enough gas to supply 24 hours in homes,” Ali told reporters. “So, this time our plan is that like last year when we got eight hours of gas, we will try to do the same. The reason is that this year compared to last year our natural gas [reserve] has reduced by 18 percent.”
The minister said Pakistan floated a tender for LNG cargoes a week ago and got two bids.
“So, two LNG cargos are finalized for December, so the December gas issue for industry will be solved to a large extent.”
Reuters reported on Thursday Pakistan LNG Limited (PLL) awarded a tender to commodities trader Vitol for the delivery of a liquefied natural gas (LNG) cargo in December, the country’s first spot purchase in over a year.
Last week, PLL issued a tender seeking two spot LNG cargoes for delivery on Dec. 7-8 and 13-14. It received bids from Vitol and Trafigura for the Dec. 7-8 delivery window at $15.97 per million British thermal units (mmBtu) and $18.39/mmBtu respectively. It received one bid from Trafigura at $19.39/mmBtu for the Dec. 13-14 delivery window.
Asian spot LNG prices rose to $15/mmBtu last Friday on increased demand in Asia and supply concerns in Europe.
Natural gas accounts for over a third of power generation in Pakistan, and LNG imports are crucial as local gas reserves are insufficient to address growing electricity demand.
