Pakistan has issued a third tender to secure a spot for LNG cargo for September after rejecting two earlier offers because of high prices.
The latest move comes as the country faces pressure to maintain gas supplies for power generation while international LNG costs and shipping risks remain elevated.
Pakistan LNG Limited (PLL) is seeking bids for one cargo of around 140,000 cubic metres, with delivery scheduled between September 12 and 16. Bids are due to be opened on September 8.
Why Pakistan Is Buying LNG Again
Pakistan relies on imported LNG to supplement domestic gas supplies, including fuel required by gas-fired power plants.
The latest tender follows two unsuccessful attempts to purchase a September cargo.
In the first round, BP Singapore offered LNG at $26.969 per million British thermal units (MMBtu) for delivery between September 4 and 8. PLL rejected the offer as too expensive.
A second tender attracted two bids:
- BP Singapore: $26.7128 per MMBtu
- PetroChina: $26.98 per MMBtu
Despite being the lower offer, BP’s bid was also rejected.
LNG Prices Are Creating a Difficult Choice
The repeated tenders highlight a problem for Pakistan’s energy planners.
Buying LNG at current spot-market prices can increase the cost of running gas-fired power plants. But delaying purchases can tighten RLNG supplies and leave some power plants without sufficient fuel.
Recent reporting has linked RLNG shortages to disruptions affecting gas-fired generation in Pakistan, adding another layer of pressure on the government.
The price difference is significant.
A spot LNG cargo delivered in late July was priced at $21.88 per MMBtu, while the September BP offer was $26.7128 per MMBtu.
That means Pakistan was being asked to pay substantially more for the September shipment than it paid for some recent cargoes.
What the LNG Price Means for Electricity
Higher LNG prices do not affect only the gas market.
When expensive imported RLNG is used for electricity generation, the additional fuel cost can eventually put pressure on power generation costs and, depending on the broader tariff structure, the electricity sector.
Pakistan therefore faces two competing risks:
- Buy expensive LNG: protect fuel availability but increase generation costs.
- Reject expensive LNG: reduce immediate procurement costs but risk tighter RLNG supplies.
This is why the outcome of the latest PLL tender will be closely watched by the power and energy sectors.
Strait of Hormuz Adds to Supply Concerns
The LNG procurement challenge is also unfolding against heightened geopolitical risks surrounding the Strait of Hormuz, one of the world’s most important energy shipping routes.
Higher freight, insurance and geopolitical risk can make spot LNG more expensive even when the underlying commodity price is unchanged.
For Pakistan, this creates an additional cost when sourcing emergency or short-term LNG cargoes from international suppliers.
Pakistan’s September LNG Tender
The latest PLL tender does not guarantee that Pakistan will purchase the cargo.
Suppliers must first submit their bids, after which PLL will evaluate the offers against procurement requirements and prevailing market conditions.
The key question is whether international suppliers will offer a price that Pakistan considers commercially acceptable.
If no suitable offer is received, Pakistan could face another difficult decision over how to manage gas supplies during the September delivery period.
What This Means for You
For ordinary consumers, the LNG issue matters because imported gas is closely linked to Pakistan’s electricity system.
If expensive LNG is purchased and used for power generation, fuel costs can rise. If sufficient LNG is not available, gas-fired power plants may face operational constraints, potentially adding pressure to electricity supply.
The immediate impact will depend on the outcome of the September tender and the availability of alternative gas supplies.
What Happens Next?
Pakistan LNG Limited is scheduled to open bids for the latest tender on September 8.
The response from international suppliers will indicate whether Pakistan can secure the required September LNG cargo without accepting another unusually high spot-market price.
The decision will be important for both Pakistan’s gas supply position and the availability of RLNG for power generation.
