Pakistan Rejects Costly LNG Cargo as Blackout Risk Deepens
Pakistan may have to extend rolling blackouts after it refused to pay three times the pre-war price for an LNG cargo, which was the only offer its latest emergency tender drew. The single cargo, offered by BP, was priced at $27 per million British thermal units, Bloomberg reported, citing unnamed trading sources. “The international LNG price is around $23.18 per MMBtu, whereas the bid received…
Pakistan may be forced to extend rolling blackouts as the country rejected a costly LNG cargo offer, citing concerns over power supply reliability. The only tender received a price 3 times the pre-war cost, with BP offering $27 per million British thermal units. This was well above the international LNG price of $23.18 per MMBtu, leading to a fresh tender issuance.
The new tender will seek 140,000 cu m of natural gas. The previous emergency LNG purchase in July was $20.70 per mmBtu, the highest since 2022, but surpassed by a subsequent cargo at $21.88 per mmBtu. The trend of rising LNG prices has been unfavorable for Pakistan. Power generation costs increased by 38% in July due to the price surge and the need to purchase gas on the spot market after losing supply from long-term deals with QatarEnergy.
Pakistan resorted to spot market purchases again last month after a cargo from Qatar did not arrive. Qatar has extended a force majeure on its LNG exports due to the ongoing blockade of the Strait of Hormuz, which is the sole outlet for the Gulf state's natural gas. Rolling blackouts have been a recurring issue, with periods extending up to 24 hours in some areas of Karachi and 12 hours in other parts of the city.
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