Pakistan Received up to 38pc Cheapest LNG rates by revised Bids

Due to the falling down international market, Pakistan on Wednesday received significantly cheaper bids for three cargoes of liquefied natural gas (LNG) to be delivered in March under an urgent tendering process.

Last week, Pakistan’s state-owned LNG Limited (PLL) canceled its three-window LNG delivery offer in March as international spot market prices started to fall. Instead, the PLL went to the revised emergency disposal on January 22 with a January 26 notification. The revised bid results in a rate of 26% to 38% lower than the canceled bid.

The results obtained by PLL showed the lowest offer of 13.62 units of Brent for shipments of goods in the second week of March from ENI to Italy against 22.24 units of Brent from the same company. This represents a drop of almost 38% in the week.

ENI also proved to be the lowest bidder for a shipment in the third week of March with 13.62% of Brent, compared to 17.81% of Vitol’s cheapest bid for the same delivery window with a lower rate of 23.5%.

The lowest bid for the fourth week of March came out even cheaper at 12.73% of Qatar Petroleum’s Brent as compared to 17.19% of the lowest Brent bid evaluated by Vitol in the previous bid, showing a 26% discount

Qatar Petroleum is offering $8 per MMBTU, or 16.3pc of Brent for February 25th and 26th, after the Emirates National Oil Company (Enoc) withdrew its $10.22 offer for MMBTU or $20.09 by Brent from 23 to 24 February. PLL was even willing to award liquefied natural gas contracts to the second and third bidders for the fourth week of February, but it also declined.

As part of a long-term contract, Qatar will deliver LNG to Pakistan at 13.37 Brent units. The two main factors that contributed to the collapse of the LNG market were the intervention of Japanese energy regulators that outside the spot market to ensure that electricity prices did not continue to rise in warmer weather conditions and South Korea’s decision not to supply additional gas for February.

As a result, liquefied natural gas traders who store these products do not have a place to unload their cargo, so the spot market drops. Currently, European and Far Eastern importers pay around USD 7.5 and USD 8.2 per MMBTU, respectively. Market analysts now predict that the price of liquefied natural gas for Brent will fall by 10 to 12 percentage points or for MMBTU from April to October next year
to around US $5 to 6.

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