SINGAPORE: State-owned Pakistan LNG has cancelled a tender to buy liquefied natural gas over a 10-year period and may turn to the spot market instead, two sources familiar with the matter told Reuters on Tuesday.

The company issued the tender in early June to import 240 LNG cargoes of 140,000 cubic metres each for delivery over 10 years for the country’s second LNG terminal.

But it has decided to cancel the tender due to inadequate demand for the super-chilled fuel, one of the sources said.

“(The company) has decided not to proceed with technical evaluation and opening of commercial offers as there is no demand against this tender,” the source added, declining to be identified.

“So for now, (the company) has decided to stop the process of long-term commitment until it receives long-term demand for LNG,” the source said.

Pakistan is expected to be a significant growth driver in global LNG demand with the cabinet recently approving five consortiums to progress with their LNG terminal plans.

Pakistan LNG’s cancelled tender had been keenly watched in the industry. The company was expected to publish the lowest prices offered by bidders, providing a valuable insight into the opaque LNG market, which is characterised by closed bilateral trades, private long-term supply agreements and an over-the-counter spot market.

Italy’s Eni, China’s PetroChina, Azeri state oil company SOCAR and commodities trader Trafigura had placed offers into the tender, sources had told Reuters.

Published in Dawn, October 16th, 2019