With an increasing gas crisis in the country, Pakistan will be buying an all-time high priced Liquefied Natural Gas (LNG) for February 2021. The Pakistan LNG Limited (PLL) has received high bid at 32.48% of Brent with a gap of 31-days between tender opening and advertisement. LNG supplies were invited to bid for the supply of at least two LNG cargoes on delivered former ship bases at Port Qasim in Karachi, which attracted extremely high bids from two LNG cargoes for February 15-16, 2021 and at least four LNG suppliers for February 23-24, 2021.
Among the bids, Bow, Socar has offered bids at 23.4331% of Brent for February 15-16 and 22.1142% of Brent for February 23-24, while Trafigura offered bids for two slots of February 15-16 at 32.4888% of Brent and at least 25.9777% of Brent for February 23-24. Moreover, Trafigura, which was willing to convert Pakistan Muslim League-Nawaz (PML-N) LNG contract done during the previous ruling government of former Prime Minister Nawaz Sharif to a fixed rate between $3.7 to $4.7, has now big the lowest 32% bid, which is at least twice the long-term price obtained by PML-N.
Another company Gunvor bid 25.5666% and 23.5666% of Brent for February 15-16 and February 23-24, respectively. Interestingly, for the month of January, Qatar Petroleum had offered the lowest bids of up to 17% of Brent, compelling Pakistan to buy the cargoes at high prices. The government obtained the LNG prices at more than the diesel price as LNG cargoes are already booked across the globe. Had the government arranged the bidding for spot cargoes for winter back in August September 2020, it would have attracted better prices.
The high bids are being criticised and questioned by the opposition parties, who say that the percentage for LNG being bought under the Imran Khan-led government is more than twice the long-term price obtained by the former PML-N regime.
