This price and market structure story follows Pakistan LNG as it makes a third attempt to secure a September spot cargo. The state owned buyer invited suppliers to offer about 140,000 cubic metres of LNG for delivery at Port Qasim from September 12 to 16. Bids are due on September 8.
Pakistan LNG rejected two earlier tenders after prices came in above its tolerance. The lowest offer in the latest round was 26.71 dollars per million British thermal units from BP Singapore, while the previous tender drew a single offer near 26.97 dollars.
Those quotes were well above Pakistan recent purchases. A cargo delivered on July 27 cost 21.88 dollars per million British thermal units, while deliveries earlier that month were priced at 20.70 dollars and 18.23 dollars.
The tender exposes the cost of relying on short notice purchases when global LNG supply is tight. Another rejection could leave less fuel available for gas fired power generation, but accepting a cargo at current prices would raise electricity costs.