ISLAMABAD: Pakistan LNG Limited (PLL) on Tuesday received zero bids in its June 13 tender for procurement of six spot cargoes between October and December this year.
Speaking to this reporter, a Petroleum Division spokesperson confirmed the development and said that PLL had not received any response from the LNG trading companies. However, he did not comment when asked about the reasons behind the zero response.
Earlier on August 6, 2022, PLL floated a two-part tender to bid for 72 cargoes under 6-year term contracts, but did not receive any bids. At that time, there was no LNG available, as most of the spot LNG was delivered to European countries.
Top officials believe there are two reasons for the lack of response from international suppliers. One reason, according to him, is that the international trading companies showed no interest because they (LNG suppliers) knew that the bids were invited by PLL to get the lowest bid for each cargo. Don’t go and buy products from them. . The lowest prices will be used as price discovery to purchase LNG cargoes from SOCAR, an Azerbaijani firm. Another reason, officials said, is that LNG suppliers are well aware of the country’s harsh economic realities, which have few dollars to buy spot LNG. They know that Pakistan is a high-risk country, as it lacks US dollars and is unable to open and honor LCs. In the last ECC meeting, the petroleum division was allowed to sign the LNG purchase agreement with SOCAR-UK amid strong opposition from former prime minister Shahid Khaqan Abbasi, the official said.
Abbasi did not attend the said ECC meeting in protest against the flawed summary prepared by the Petroleum Division. Abbasi met the finance minister and tried to convince him that the deal with Azerbaijan was not good because it was not a strong LNG trading company but a second-tier company, and one without firm demand and price discovery. It is buying distressed LNG cargoes in the month. The mechanism will not work.”
