KARACHI: The Pakistan LNG Limited (PLL) has issued a tender for the import of two cargoes to be delivered on November 19 and 20 and November 26 and 27, 2021. This emergency tender came after ENI and Gunvor refused to make the deliveries in November under long-term contracts.

Pakistan has a five-year import deal with Gunvor and a 15-year agreement with ENI to buy LNG. Under the contracts, Pakistan LNG can impose a penalty of around 30 per cent of the contractual price of a cargo on each company for defaults.

The spot LNG prices LNG-AS rose to a record high of over $56/million British thermal units (mmBtu) last month before pulling back to just over $30/mmBtu, which is still over 400 per cent higher than the same time last year.

That works out to three times the price of oil-linked term cargoes, which are priced at above 11 per cent of Brent crude oil prices, or around $10/mmBtu based on the current oil prices.

To recall, the last tender issued by the Pakistan LNG Limited (PLL) for eight cargoes for December and January received not a single bid by the suppliers. PLL had invited bids for supply of eight cargoes of the liquefied natural gas (LNG) to be delivered in December 2021 and January 2022. The bids were to be opened on October 11, 2021, and there were no offers at all.