The South Asian nation intends to float a tender to purchase one LNG cargo per month for 10 to 15 years, said Shahid Khaqan Abbasi who is overseeing the energy sector for Prime Minister Shehbaz Sharif.<\/p>\n
The government is still deciding the timeline for when to issue the tender, which they will use to gauge the market response and pricing, Abbasi said in an interview.<\/p>\n
Sharif\u2019s government will also speak with LNG suppliers in the Middle East, including Qatar, the UAE, Saudi Arabia and Oman, for a long-term contract, according to Abbasi.<\/p>\n
Pakistan last week said it\u2019s not ruling out a potential gas supply agreement with Russia.<\/p>\n
Pakistan depends on overseas LNG for power generation, and was hit particularly hard by the surge in spot prices and supply disruptions. The cash-strapped government resorted to planned blackouts to conserve its dwindling supply of fuel.<\/p>\n
Asian LNG spot prices are trading at a seasonal high after Russia\u2019s invasion of Ukraine exacerbated an already tight market.<\/p>\n
Pakistan was forced to purchase several expensive LNG shipments from the spot market to keep the lights on last month.<\/p>\n
Long-term deals are much cheaper than current spot rates, and may provide some relief for Pakistan\u2019s government.<\/p>\n
Abbasi, who is a former prime minister and energy minister, signed several long-term LNG supply deals with Qatar, Eni SpA and Gunvor Group in 2016 and 2017.<\/p>\n
However, Eni and Gunvor have canceled several scheduled cargoes to Pakistan in the last year, exacerbating the nation\u2019s energy shortage and fueling political instability.<\/p>\n
The suppliers backed out by paying a 30 percent penalty on the cost of the shipment, which is envisaged in the contracts if they cannot deliver.<\/p>\n
The government will keep the 30 percent clause in future deals, said Abbasi, who explained that it is standard in contracts.<\/p>\n
Pakistan is also open to signing a 30-year contract to make sure it has enough fuel to power its economy well into the future, said Abbasi.<\/p>\n
Today, the industry\u2019s longest deals rarely top 20 years.<\/p>\n","protected":false},"excerpt":{"rendered":"
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