ISLAMABAD-Pakistan has failed to attract any supplier for the delivery of up to 72 LNG cargoes under 4-6 years long term contract, which may prolong the existing gas shortage in the country. 

Although Pakistan LNG Limited (PLL) had relaxed some clauses and made some changes to the bid documents to attract the suppliers, however no company submitted bids to the tendering process. To bridge the gas supply demand gap, the state-run Pakistan LNG Limited had floated tenders seeking up to 72 cargoes over the next six years (2023-28) at the rate of one cargo per month. On August 6 PLL had floated tenders for the supply of 60 to 72 LNG cargoes within 5-6 years, with a bidding deadline of September 13, but later the deadline was extended till October 3, 2022. To get maximum response from the suppliers, PLL had also extended the deadline for the submission of bids by around three weeks.

PLL had made several changes to the pre-requisite of the qualifying bidders. Initially the contract had been divided into two delivery period, with the duration of 5-6 years, which included delivery period-1 for January 2023 to December 2023 and delivery period-2 from January 2024 to December 2028. In the delivery period-1, the supplier were supposed to supply total number of 12 LNG cargoes, while in delivery period-2, there were 60 LNG cargoes. As per the tender conditions, the successful bidder will be required to supply either 72 or 60 LNG cargoes.

Responding to the tenders one of the potential bidders asked PLL regarding the duration, and said “are you open to accepting shorter periods than the 5 or 6 year proposal?”. PLL replied “No change is contemplated. It will be PLL’s prerogative to award the LNG Cargoes under either; a) Both delivery periods i.e., delivery period-1 and delivery period-2 (6 years); OR b) only delivery period-2 (5 Years),” Another supplier asked that would PLL consider an offer for fewer than 60 cargoes?. However PLL replied that “No, offer under this tender must be for 72 cargoes (1 cargo per month for a period of 6 years).

However, the bid documents were amended later to facilitate the suppliers. The contract had been divided into two delivery period, with duration of 4-6 years, which included delivery period-1 for January 2023 to December 2024 and delivery period-2 from January 2025 to December 2028. The successful bidder will be required to supply either 72 (Delivery Period-1 and Delivery Period-2 collectively) or 48 LNG cargoes (only delivery period-2). The potential suppliers were required to deliver 24 LNG cargoes during delivery period-1 and 48 cargoes for delivery period-2. Delivery period-1 and delivery period-2 collectively; OR b) only delivery period-2.

The decision to enter long term contract was taken due to the country’s inability to purchase any spot LNG cargo during past few months, owing to its high prices. It seems that the gas shortage will continue to haunt consumers during the upcoming months and years. The way out for Pakistan is either the prices of LNG should decrease in international market or a friendly country like Qatar should come forward to sign G to G deal.