Pakistan will increase the spot buying of liquefied natural gas (LNG) from the international market, going after six cargoes for December, its procurement subsidiary announced, preparing the country for a potentially crippling gas shortage.
December and January face the highest spike in demand for gas in Pakistan, but this year the demand-supply shortfall is expected to be greater due to higher consumption and diminishing indigenous supply, authorities show concern.
A source in Pakistan LNG Ltd (PLL), which handles LNG imports, informed Reuters that six spot cargo purchases for delivery in December would be the most in a single month by the country.
An advertisement by PLL said the country was seeking the cargoes, each of 140,000 cubic metres, in six delivery windows. November 2 is the deadline for submission of bids.
Pakistan has long term LNG agreements in place, including one with Qatar, but has also been active on the spot market since August.
The country has advertised tenders for delivery of two cargoes in August, three in September, two in October and three in November.
In a press conference last week, Pakistan’s Minister for Petroleum Nadeem Babar warned that the country was headed towards a major gas shortfall in December and January, weighing the blame on the wide contrast in supply and demand.
He added that there had been a shortage of local exploration licenses granted by the previous government, and while new gas discoveries were made, they were still inadequate. He said that the current government would advertise more exploration licenses this month.
A report put out by the Oil and Gas Regulatory Authority in August confirms the lag in supply of natural gas due to higher demands.
The largest consumer of natural gas had been the power sector, which consumed 38 per cent, while the domestic sector was at 22pc and fertiliser 16.
Up to 45pc of Pakistan’s power sector energy mix is based on natural gas, according to the report, which added: “The demand supply gap during 2018-19 was 1,440 mmcfd, which is expected to rise to 3,684 mmcfd by 2024-25 and 5,389 mmcfd by 2029-30”.