Pakistan to get two LNG shipments

ISLAMABAD: In a positive turn of events, Pakistan’s request to buy Liquefied Natural Gas (LNG) received an offer from a supplier for the first time in more than a year, potentially reversing a trend of failed attempts to procure fuel.

Trafigura Group offered two LNG shipments for January to February delivery, according to traders with knowledge of the matter.

Last month, Pakistan failed to secure LNG from the spot market in its first attempt in about a year, as no supplier seems to budge to the cash-strapped nation’s offer.

Traders, on the condition of anonymity, had said that Pakistan LNG Limited’s (PLL) bid to purchase six shipments for October to December closed with no companies responding to the offer, Bloomberg had reported.

The move comes as Pakistan’s government finances are on the mend. The nation won final approval to borrow $3 billion from the International Monetary Fund earlier this week, unlocking long-awaited lending that will help ease its dire need for cash, it added.

The shipments that Trafigura offered are priced at roughly a 30% premium to current market prices, according to traders. Typically, spot purchases of fuel would be sold at similar levels to market prices, it said.

Pakistan won’t award the tender until July 31, and it still isn’t clear if the country will follow through with buying the fuel.

Credit risk had been a barrier stopping LNG suppliers from selling spot shipments to the nation, it said.