LNG Crisis Could Lead To Shortage Of Gas Supply To Industries


The Cabinet Committee on Energy has reviewed the overall situation and suspension of gas supply to a large number of industries on a long-term basis due to shortage in supply of liquefied natural gas (LNG) by foreign traders.

ECC Will meet today to take the important decision in this regard. Following reports that two state-owned foreign suppliers have refused to deliver two ships as promised in February, Pakistani authorities have secured at least one ship through the highest diplomatic efforts. However, the government has confirmed that the ship, which arrived in the second half of February, is no longer available because its successful bidder (UAE’s ENOC) has failed to pay, according to Dawn.

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According to a statement issued by Pakistan LNG Limited (PLI), “In the last week of February, the second spot cargo was awarded to the lowest bidder BBRA Rules, which was disqualified for delivery as per the bid. What are you aware of? It is to be noted that the price of LNG in the spot market has almost reached the level of crude which is also double the price at which ENOC had promised to supply LNG to Pakistan through the lowest bid.

The UAE-based state-owned company has also dropped its bidding bonds, forcing top officials to resign. Informed sources said that SOCAR Trading, a subsidiary of Azerbaijan’s state oil company, was also facing difficulties in supplying LNG in the second week of February, but strategic friendly relations prevented the supply from ending. Given In addition, a long-term government-to-government cooperation agreement with SOCAR in 2017 also helped protect the PLL.

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In a statement, PLL said, “PLL is taking all available steps in accordance with the law regarding government and international LNG traders who have apologized for the supply after bidding in PLL tenders. The bidding involves the confiscation of bids from cargo bidders. On the other hand, the Cabinet Committee on Energy, headed by Planning Minister Asad Omar, will review the overall situation of gas supply, including shortages in ENOC’s gas supply and shortages in various sectors.

It is also likely that the industrial sector will adopt a long-term policy to eliminate power generation from local gas. The Petroleum Division has suggested that in view of the overall supply and demand situation, the supply of natural gas to all industries that use it primarily for power generation should be stopped from February 1. However, the ban on natural gas will not apply to industrial units that are either not connected to the power distribution car grid or are using it as steam engine fuel.

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