Pakistan has approved a more expensive LNG cargo while turning down cheaper offers in its latest procurement round, as it anticipates improved supply routes through the Strait of Hormuz in early May
State-owned Pakistan LNG Limited accepted a revised bid of $18.4 per mmBtu from TotalEnergies for delivery between April 27 and 30. Meanwhile, higher and lower bids from Vitol Bahrain and OQ Trading were rejected, despite OQ offering the lowest price. Officials cited delivery timing as a key factor, as the country faces rising electricity demand and potential power shortages.
PLL also declined alternative offers for early May delivery windows, aligning its strategy with expectations of easing disruptions in the Strait of Hormuz, a vital global energy route. Authorities believe smoother shipping conditions could improve supply availability in the coming weeks.
Earlier, PLL had issued urgent tenders for three LNG shipments to tackle increasing fuel demand and electricity shortages. The move followed a power deficit exceeding 4,500 megawatts, which led to prolonged load-shedding in multiple areas.
The bidding process was fast-tracked, with offers submitted and opened on April 24 to ensure timely fuel supply for power generation.
After adding taxes, regasification charges, and other system costs, the final price of regasified LNG is expected to approach $23 per mmBtu—significantly higher than earlier estimates.
In recent weeks, RLNG prices have surged by around 19 to 22 percent due to increased terminal charges and reduced import volumes. The current pricing structure is based on fewer cargoes compared to previous months.
With summer demand rising and supply flexibility limited, the power sector remains under pressure. Although solar energy has eased daytime load, electricity demand continues to spike after sunset, keeping strain on the system.
Read more: Ogra Reduces LNG Rates For January 2024
