Today, Pakistan has imported its lowest-priced liquefied gas (LNG) cargo.

According to the small print, Pakistan LNG has imported its cheapest LNG cargo through The State company of Azerbaijan Republic (SOCAR).
Today, August 28, marks the milestone of lowest priced #LNG cargo imported in #Pakistan by PLL through @SOCARofficial of Azerbaijan
PLL contributes to Pakistan’s economy by bringing #clean and affordable gas to its #energy mix.
— Pakistan LNG (@PAK_LNG) August 28, 2020
Back in July, SOCAR was rock bottom bidder, which quoted an interesting rate of 5.7395% of Brent (approx. USD 2.2/mmbtu) for the cargo. Prices quoted by the opposite three bidders were Gunvor 7.8421%, PetroChina 8.3500%, Trafigura 10.3811%.

PLL had received a suggestion for an Aug 27-28 delivery cargo at about $2.20/mmbtu. it's worth mentioning that Pakistan was out of the commodity exchange in 2020, and this was their first tender since November 2019.

A.A.H Soomro, director at Khadim Ali Shah Bukhari Securities.

Pakistan is heading towards a massive gas shortage in the absence of a new RLNG terminal, a lack of indigenous reserves, and unutilized terminal capacities. It’s of utmost importance to provide gas – and affordable one – to industries to reduce their cost of production to regionally comparable levels.
Soomro further stated that Azerbaijan is providing very competitive offers in Corona struck the worldwide economy for RLNG spot cargoes. the important game-changer is that the new terminal feeding to the unconstrained demand for export and native manufacturers, he added.

It is worth mentioning that this was less than the Asian LNG cash price LNG-AS for August. the costs were expressed within the document as a “slope” of petroleum prices, a percentage of the Brent crude price, and are typically a pointer for the opaque spot LNG market.

Physical work on two private sector LNG terminals

Two multinational companies are ready to start out physical work on fixing their Liquefied gas (LNG) terminals within the next few months after the govt opened the energy sector under its ease-of-doing-business strategy, a senior official aware about petroleum sector developments told the State’s media agency.

“The government had allowed five private sector companies to determine their own LNG terminals, out of which two firms Exxon Consortium and Mitsubishi will start physical work on their projects before the top of the present year,” he added.

After fixing the terminals, the businesses will import and sell the commodity on their own with none involvement of the govt except regulation matters.

The official further stated,

Pakistan’s existing natural gas reservoirs were depleting fast at a rate of 9.5 percent annually, and the LNG was the only available instant remedy to bridge the increased gap between demand and supply of the country. Currently, the country’s indigenous gas production is around 3.7 Billion Cubic Feet per Day against the demand of 6 BCFD.
Currently, two LNG terminals were operating at Port Qasim Karachi and injecting around 1,200 MMCFD gas within the distribution network of Sui Northern Gas Pipelines Limited and Sui Southern gas service .

According to a recent report of Oil and Gas regulatory agency, the gap between demand and provision of gas could increase by 5,389 Million Cubic Feet per Day (MMCFD) by 2029-30.
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