Govt Banks on Qatar LNG to Avoid Another Costly Spot Cargo

Pakistan is seeking to secure another LNG cargo from Qatar for arrival around August 25 or 26 as international spot rates surge, with authorities looking to avoid another expensive purchase from the spot market.

Key points

• While the landed cost of a spot cargo in Pakistan is estimated at $22.30 to $23 per MMBtu, spot LNG rates are at present around $21.22 per million British thermal units.
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• Pakistan generated 14, 501 GWh of electricity in July at a total generation cost of regarding Rs.
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• The discussions come as regional shipping routes remain affected by the security situation around the Strait of Hormuz.

Authorities familiar with the matter stated the administration is using diplomatic and commercial channels to arrange the further cargo against the backdrop of security worries around the Strait of Hormuz. While the landed cost of a spot cargo in Pakistan is estimated at $22.30 to $23 per MMBtu, spot LNG rates are at present around $21.22 per million British thermal units.

Notably, the administration is particularly reluctant to procure another cargo through the regular spot tendering process as of the high international rates. Instead, authorities are focusing on securing supplies from Qatar while additionally consulting regional and international stakeholders over the safe movement and delivery of LNG cargoes. Pakistan Moves Ahead With New National Youth Policy.

For context, the National Coordination and Monitoring Committee is in contact with Qatar, Iran and the United States regarding arrangements for the safe passage and delivery of LNG shipments. The discussions come as regional shipping routes remain affected by the security situation around the Strait of Hormuz.

Pakistan is under pressure to maintain LNG supplies since regasified LNG remains an notable fuel source for power generation when domestic gas and other generation sources are insufficient. The country's two LNG terminals operated by PGPC and Engro are at present supplying concerning 130 million cubic feet per day each, providing a combined 260 million cubic feet per day to the national gas system.

Notably, the urgency has rose after expensive spot cargoes pushed up the cost of RLNG based power generation. In July, the average cost of electricity generated from RLNG reached Rs. 47.38 per unit, up from regarding Rs. 35.5 per unit in June.

Meanwhile, the higher generation cost followed the arrival of a number of costly spot LNG cargoes. While cargoes delivered on July 21 and 22 and July 15 and 16 were priced at concerning $20.70 and $18.23 per MMBtu, respectively, a cargo delivered on July 27 was priced at regarding $21.88 per MMBtu.

Pakistan generated 14, 501 GWh of electricity in July at a total generation cost of regarding Rs. 139.37 billion. Although RLNG accounted for only With the timing of the next LNG carrier still dependent on the finalization of the berthing schedule after August 25 and 26, any delay could put extra pressure on gas allocations and power generation.

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Taken together, the developments around govt Banks on Qatar LNG to Avoid Another Costly Spot Cargo point to a situation that is still moving, and the coming days should bring more clarity.