Pakistan issues first spot LNG tender since December 2023

ISLAMABAD: Pakistan LNG Limited has floated its first spot tender for liquefied natural gas since December 2023 as the country faces supply constraints linked to the US-Israeli war against Iran.

According to an advertisement issued on Thursday, the company has invited bids from international suppliers for three LNG cargoes of about 140,000 cubic metres each. The cargoes are sought for delivery at Port Qasim in Karachi during April 27-30, May 1-7 and May 8-14. The tender will close on April 24.

Power Minister Awais Leghari told Reuters that the tender had been issued to meet increasing electricity demand and reduce dependence on more expensive diesel and furnace oil. He also said Pakistan was uncertain about when additional cargoes from Qatar would arrive.

The move comes after electricity shortages led to widespread outages last week, when lower hydropower generation and interruptions in LNG supplies highlighted gaps in fuel availability at a time of rising demand.

Pakistan has not received any LNG cargoes loaded after the Middle East war began on February 28 and Iran blocked almost all shipping through the Strait of Hormuz, which links the Gulf with the Indian Ocean. Qatar relies on that route to export its energy supplies.

Data from Kpler showed Qatar provided most of the 6.64 million metric tons of LNG imported by Pakistan last year.

Azerbaijan’s state energy company SOCAR said on Tuesday that it was prepared to supply LNG to Pakistan as soon as it received a request from Islamabad. Under a framework agreement signed in 2025 between SOCAR Trading and Pakistan LNG, Pakistan can purchase cargoes through an accelerated procedure.

Earlier, Islamabad had cancelled 21 LNG cargoes for 2026/27 under a long-term agreement with Eni, as it anticipated slower growth in demand and greater electricity generation from solar power.

The recent disruption in LNG supplies has put that shift under pressure, although increased use of domestic and renewable energy helped soften the impact. Even so, Pakistan remains vulnerable to supply disruptions, and LNG is still required to meet peak summer demand and help contain outages.

Global LNG market under pressure

Iran’s blockade of the Strait of Hormuz, which before the war handled 20pc of daily global LNG flows, drove Asian spot LNG prices to their highest level in three years, although prices have eased somewhat in recent days.

They were last reported at $16.05 per million British thermal units (mmBtu), up 54pc since February 23.

Analysts have cut their outlook for global LNG supply and expect elevated prices and shortages to curb demand across Asia.