A tender for the acquisition of liquefied natural gas (LNG) that expired on Monday did not receive a single bid from any overseas suppliers, according to Pakistan LNG Limited (PLL), a wholly-owned subsidiary of Government Holdings Private Limited (GHPL).
PLL originally issued an invitation for bids in August for 72 LNG cargoes to be delivered over a six-year term from foreign suppliers.
According to PLL, bids were requested from reputable organisations to convey cargo on a Delivered Ex-Ship basis (DES) at Port Qasim, Karachi, and suppliers had until September 14 to submit their offers.
“Bid documents shall be available from 10 August 2022 to 13 September 2022,” it said.
Failure of an LNG contract in Pakistan contributes to the energy crisis
The Pakistani procurement, which had an expiration date of October 3, saw no suppliers participate, according to PLL bid documents.
According to the documents, the corporation was looking for one shipment each month for the six-year period.
PLL was required by the Pakistani government to carry out the business of importing, buying, storing, supplying, distributing, transporting, transmitting, processing, measuring, metering, and selling natural gas, LNG, and re-gasified LNG. Each cargo was to have a volumetric quantity of 140,000m3, it added.
For the timeframe of July through September, PLL sought worldwide suppliers to submit proposals for 10 LNG cargoes.
By July 7, suppliers were invited to submit their bids. Each cargo was required to have a volumetric quantity of 140,000m3, according to PLL documentation.
Bloomberg, citing traders with knowledge of the situation, said that the state-owned LNG purchaser did not receive any bids in a $1 billion LNG purchase tender at the time. The article at the time stated that “it highlights both the scope of the worldwide fuel shortage as well as the unwillingness of suppliers to sell to a country in the depths of an economic crisis.”
The Russia-Ukraine conflict has caused supply chains to be disrupted globally, which has driven up the cost of key commodities like LNG.
Pakistan, on the other hand, is experiencing a fuel scarcity, especially in the electricity sector. The most recent development is anticipated to worsen the energy situation, particularly during the winter when there will be an increase in heating demand that would affect both families and companies.