Pakistan is all set to purchase the cheapest LNG cargo at a record low price.
The SOCAR Trading ( The State Oil Company of Azerbaijan Republic) has placed its lowest proposal to Pakistan LNG Ltd for a liquefied natural gas cargo for delivery in late August.
According to details, the P.L.L. was the lowest bidder, which quoted a rate of *5.7395%* of Brent (around USD 2.2/mmbtu) for the cargo. Prices quoted by the other bidders are Trafigura 10.3811%, PetroChina 8.3500%, Gunvor 7.8421%.
The P.L.L. received an offer for an August 27th – 28th delivery cargo at about $2.20/mmbtu. It is pertinent to mention here that Pakistan has been out of the spot market in 2020, and this is its first tender since November 2019.
The Managing Director at Khadim Ali Shah Bukhari Securities, A.A.H. Soomro, told a local news outlet, that this is a game-changer. It is a good time for Pakistan to relook at long term LNG contracts and move towards Spot purchase. This solves half of the country’s problems if we speed up the LNG terminals. The economy will increase if we reduce energy prices now.
The new price is lower than the Asian LNG spot price LNG-AS for August, which was estimated to be around $2.35 per mmBtu. The prices are revealed in the report as a “slope” of crude oil prices, a percentage of the Brent oil price.
According to Fitch Solutions, Asian spot LNG prices continue to hover at historical lows as the coronavirus continues to drag economic activity and demand.
LNG imports in Asia have registered large year-on-year declines across the board. Gas consumption across the business and industrial sectors slowed as stern COVID-19 containment measures were followed.