ISLAMABAD – After over a year, Pakistan has received bids for delivery of spot liquefied natural gas (LNG) cargoes in January and February next year.
Pakistan was facing difficulties in procuring spot cargoes of LNG after escalation of global prices in the aftermath of Russia-Ukraine war.
Trafigura Group has placed the bid for delivery of LNG cargo on January 3-4 at $23.47 per mmbtu and at $22.47/mmbtu for delivery on February 23-24.
Pakistan issued two tenders seeking spot LNG cargoes in June for the first time in nearly a year but did not receive any bids.
In response to the second tender closing on Friday (July 14), Trafigura Group has submitted the bid for spot delivery of LNG cargo during the first two months of the coming year.
The development comes soon after Pakistan managed to secure a $3 billion Stand-By Arrangement with the International Monetary Fund (IMF).
Apparently, credit risk was hindering LNG suppliers from selling spot shipments to Pakistan. Funding from Saudi Arabia and United Arab Emirates and release of first tranche under the SBA have helped Pakistan improving the foreign exchange reserves. It ultimately resulted in Pakistan getting a bid for delivery of LNG cargoes.
As per media reports, the shipments offered by Trafigura are priced at roughly a 30% premium to current market prices.
As a routine, spot purchases of fuel are made at similar levels to market prices.
According to a report, tender will not be awarded until July 31 and it remains to be seen that whether Pakistan will follow through with buying the fuel.
