Pakistan losing LNG bidding war to Europe – Business

KARACHI: With a spiraling energy crisis brought on by the Russian invasion of Ukraine putting pressure on global fuel reserves, a key member of the federal cabinet admitted on Satur­day that the country simply could not compete with the buying power of European countries who were also potential customers for the same reserves that Pakistan desperately needed.

According to State Minister for Petroleum Musadik Malik, Pakistan’s failure to find a bidder for liquefied natural gas (LNG) slots had forced authorities to shift to alternative sour­ces of energy for power generation, which would take a month or so to yield results.

“The situation is that we have carried out two rounds of tenders of three to four tenders each, but no one responded to them,” he said in reply to a question put to him by a journalist during a media interaction on the sidelines of a two-day conference organised by the Centre for Excellence in Journalism (CEJ) at the Institute of Business Administration (IBA).

Read: Experts say WB has messed up country’s energy sector by backing gas

“Since supply from Russia is suspended due to the war with Ukraine, European countries are also buying gas from everywhere it’s available. As a result, LNG, which was priced at $4 two-and-a-half years ago, is no longer available for even $40. So, Russia’s war [with Ukraine] created a real crisis,” he said.

Musadik Malik says ‘pain’ from power shortages to last till at least July 15; govt exploring alternative means of energy generation

His thoughts came a day after the country failed to find a bidder for three LNG slots and received the highest-ever rate for another slot for the last week of July as European customers lapped up spot market quantities to compensate for the Russian supply disruption amid widespread electricity shortages.

The state-run Pakistan LNG Ltd (PLL) had floated a tender on June 16 for four cargoes — one each in the first and second weeks, and two in the last week, of July. However, no bidders came forward for the July 2-3, 8-9, and 25-26 delivery windows.

It is worth noting that this was the third futile attempt by PLL to have an LNG cargo in the first week of July. The earlier two tenders, issued on May 31 and June 7, attracted only two and one bidder, respectively, but none was technically responsive. Hence, the bids were returned unopened.

The minister told reporters point-blank: “We don’t have enough energy right now. The gas is not available and we can’t afford such expensive gas. So what we are doing is arranging alternates. The recent increase in production, imports of coal and furnace oil is part of the same strategy,” Senator Malik said.

Sharing the fresh moves the government was making to meet the growing energy glut, he referred to the import of five ships worth of furnace oil within a month and the larger amount of coal acquisition to keep power production units running.

Senator Malik was also confident that nature would favour them with the upcoming monsoon, which could help turn the tide of the power crisis to a large extent.

However, he cautioned that the ‘pain’ caused by power shortfall and…

Read More: Pakistan losing LNG bidding war to Europe – Business

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