PGPC Seeks Pakistan’s First Spot LNG Cargo in Over a Year

Pakistan Gasport is looking to buy a spot liquefied natural gas (LNG) cargo for delivery in November, Chairman Iqbal Z. Ahmed told the Reuters news agency; the first spot LNG deal for Pakistan since June 2022.

A surge in prices after Russia’s invasion of Ukraine left Pakistan—amidst an economic crisis—struggling to purchase LNG, despite the fuel being crucial for power generation and domestic gas supplies. Ahmed told Reuters PGPC is evaluating interest for a cargo from sellers in Oman, the United States and the United Arab Emirates. “We’ve got different countries which have offered us different options. We are extremely encouraged by what we’ve heard today,” he said.

Noting PGPC’s LNG terminal at Port Qasim is the largest in the country, the news agency said an envisaged cargo would be the first shipped in by a private sector company in Pakistan. Ahmed said he expects LNG prices to fall in coming years, making spot purchases more attractive. He said 12% to the Brent slope was the “price to beat” for a cargo to Pakistan, or roughly $11 per mmbtu compared to average Asian LNG prices of $13.

“If the government or anybody else can bring LNG at a price of 12% of Brent or lower, there is a market. The minute you cross that barrier, there is resentment,” he explained, adding he expects Pakistan’s LNG demand to grow to 30 million metric tons in 5 years, from about 10-12 million tons now.

Referring to challenges faced by importers amidst a foreign exchange crisis, with LNG traders saying sellers to Pakistan could demand a premium because of the country’s low credit rating, Ahmed said PGPC would avoid this by not seeking a letter of credit from banks. Instead, a potential deal would be financed with internal funds. “I plan to use a currency other than the dollar to facilitate the payment and also use a semi-barter system to settle,” he said.