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Pakistan is looking to buy liquefied natural gas (LNG) for the winter, but it couldn’t find any sellers in a recent tender, which highlights the fact that the natural gas market in Asia is tight.
Pakistan has issued a tender seeking eight LNG cargoes for delivery in December and January, but has not received any bids, according to a document from Pakistan LNG.
Industry sources told Reuters that the main driver behind the lack of offers was the long validity period of the offers, 15 days, considering the volatile prices of spot LNG cargoes in Asia right now.
It was not immediately clear if Pakistan will re-issue the tender at a later stage.
Pakistan is one of the price-sensitive buyers of spot LNG cargoes in Asia, but it still needs spot supply on top of its contractual term LNG deliveries to meet gas demand and avert a power crisis.
Pakistan is likely to slash spot LNG purchases this winter to avoid the record-high prices, which could result in a gas crisis in the country, Pakistani outlet The Express Tribune reported earlier this month.
High import prices of LNG will impact Pakistan’s finances, if the country manages to attract offers for cargoes, analysts say.
Pakistan’s predicament comes amid a global natural gas crunch and surging prices for the fuel in Europe and Asia.
Last week, natural gas prices in Europe hit a fresh record high to the equivalent of $205 a barrel oil, based on the relative value of the same quantity of energy from each source. The worsening global energy crisis sent Asia’s spot LNG prices soaring by 40 percent last Wednesday, as a cargo for delivery into North Asia in November was priced at as much as $56 per million British thermal units (mmBtu)—a record high that beat the previous record from the week prior of $34.52/mmBtu.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com