Low gas output forces govt to book pricey LNG as winter nears

After a gap of almost one year, Pakistan on Wednesday received three bids for two additional liquefied natural gas (LNG) cargoes needed for the peak winter demand at a significantly higher premium over the prevailing spot market. Petroleum Minister Muhammad Ali later announced in the evening that the government had accepted two lowest evaluated bids to minimise winter gas shortage following a decline in domestic gas production so as to maintain load management at around the same level experienced during winter last year. In an international tender in September, the state-run Pakistan LNG Limited (PLL) had sought bids for procurement of two LNG cargoes for delivery in the second and third week of December with the bidding deadline set at Wednesday noon. In response, two traders submitted three bids. LNG trader Trafigura Pte Ltd came up with two bids against Dec 7-8 and Dec 13-14 windows at $18.39 per million British thermal unit (mmBtu) and $19.39 per mmBtu, respectively. On the other hand, Vitol Bahrain offered a bid price of $15.97 per mmBtu for Dec 7-8 delivery window.