Pakistan expects arrival of tankers carrying Qatari LNG
Pakistan expects tankers carrying liquefied natural gas from Qatar to arrive this month, which could partially ease the country’s energy crisis. The first LNG cargo may arrive as early as Thursday, OilPrice reports, citing Bloomberg vessel-tracking data.
Disruptions to supplies from Qatar
Pakistan faced problems in its energy system after Qatar declared force majeure on exports. According to OilPrice, this occurred after Iranian strikes damaged the Ras Laffan LNG hub.
Before the disruptions, Qatar was Pakistan’s largest supplier of liquefied natural gas under long-term contracts. After force majeure was declared, the country was forced to purchase individual cargoes on the spot market at significantly higher prices.
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Spot market prices
Over the past three months, Pakistan has announced several tenders for urgent LNG supplies, regularly paying more than $20 per million British thermal units. One tender at the beginning of the month ended without an order: the country’s state gas company received only one bid priced at $27 per MMBtu.
According to OilPrice, this is about three times higher than the pre-war LNG prices paid by Pakistan. A representative of Pakistan LNG Limited, quoted by Pakistani media, said that the international LNG price was about $23.18 per MMBtu, while the bid received was for $26.969. He noted that the price was deemed too high, so Pakistan LNG announced a new tender.
Impact on the energy system
The gas shortage raised electricity generation costs and led to regular power outages in Pakistan, which in some places lasted up to 24 hours. As of July, generation costs were 38% higher than a year earlier. OilPrice notes that the new Qatari cargoes could partially ease the situation, although QatarEnergy extended the force majeure.
