AsianOil: Pakistan’s gas supply woes deepen

Pakistan could face a natural gas shortage in September and October, after having reportedly cancelled a liquefied natural gas (LNG) tender owing to high spot market prices.
The government has refused to buy LNG for more than $13.79 per mmBtu ($381.43 per 1,000 cubic metres), local daily The News International reported on July 12, citing unnamed senior officials from the Petroleum Division. They added that state-owned Pakistan LNG Ltd (PLL) had cancelled a tender for eight spot LNG cargoes, with four shipments to arrive in September and the rest in October.
The average price for spot deliveries into East Asia in August was about $14 per mmBtu ($387.24 per 1,000 cubic metres), trade sources told Reuters at the start of this month. The market has cooled somewhat since then, however, with the newswire’s sources noting that prices for August delivery had fallen to $12.55 per mmBtu ($347.13 per 1,000 cubic metres).
The News International’s Petroleum Division sources said the government would monitor market trends and that PLL would be allowed to retender for LNG cargoes in the same delivery window once prices had retreated.
Nevertheless, the government’s decision to cancel the tender has shaken the officials, who warned that without those shipments the country could face a gas crisis akin to the one that emerged in late June.
Sui Southern Gas Company Ltd (SSGCL) and Sui Northern Gas Pipelines Ltd (SNGPL) slashed gas supplies between June 22 and July 5 owing to the turnaround of a major gas field as well as an LNG terminal being dry-docked, local daily Dawn reported on June 29.
SSGCL had intended to reopen its compressed natural gas (CNG) stations in Sindh Province on June 28, after closing them on June 22 in response to annual maintenance work at Kunnar Pasakhi Deep (KPD) gas field. But the utility opted to leave them shuttered in the face of a 160mn cubic feet (4.53mn cubic metres) per day supply shortfall.
The dry-docking of the Engro LNG terminal, meanwhile, forced SNGPL to suspend gas deliveries to the cement, CNG refuelling and non-export industries in Punjab and Khyber Pakhtunkhwa until July 5.