Pakistan considers direct LNG imports for power plants — OilPrice

The Pakistani government is considering allowing power plants and private companies to directly import liquefied natural gas (LNG) from the spot market. The initiative is expected to ease the burden on state fuel procurement amid the energy crisis, OilPrice reports.

Easing rules for importers

Pakistan’s Ministry of Energy has proposed easing the current rules so that private companies can purchase LNG independently. Bloomberg reported this, citing a source familiar with the discussions. Currently, private-sector access to the spot market is limited, while purchases there are mainly handled by the state-owned company Pakistan LNG Ltd.

According to the publication, the changes are intended to reduce government spending on gas purchases and expand the pool of participants in tenders for LNG cargo supplies and the use of available capacity at Pakistan’s two LNG import terminals.

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Loss of supplies from Qatar

Pakistan had mainly relied on long-term LNG supplies from Qatar but was forced to turn to more expensive purchases on the spot market. OilPrice writes that this increased electricity generation costs.

According to the publication, Qatar declared force majeure on exports after Iranian strikes damaged the Ras Laffan LNG export hub. This week, Qatar, according to OilPrice, extended force majeure on LNG supplies to Asia and Europe for another month, until the end of November. The publication links this to significant restrictions on LNG tanker traffic through the Strait of Hormuz.