Pakistan fails to secure LNG cargoes in first attempt in about a year
Many overseas banks were not accepting letters of credit (LCs) from Pakistani financial institutions
June 20, 2023
- Pakistan's bid to purchase six shipments closed Tuesday.
- No company responded to cash-strapped nation's offer.
- Inability to buy gas will aggravate energy shortages.
Crises-hit Pakistan has failed to secure liquified natural gas (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, Bloomberg reported Tuesday.
Traders, on the condition of anonymity, told the publication that Pakistan LNG Limited's (PLL) bid to purchase six shipments for October to December closed Tuesday with no companies responding to the offer.
Many overseas banks were not accepting letters of credit (LCs) from Pakistani financial institutions to procure LNG shipments, making suppliers reluctant to offer cargoes, the publication reported last week.
The $350 billion economy is struggling with a depreciating currency, political turmoil, and an increased risk of a default on its foreign debt.
To top it off, the International Monetary Fund (IMF) came down hard on the federal government's recently presented budget, a sign that the June-end deadline to unlock the funds won't be met.
Pakistan's inability to buy gas will aggravate energy shortages in the country, increasing the frequency of blackouts and curbing the supply of fuel to industrial consumers.
The nation was hit hard by the energy crisis spurred by Russia's invasion of Ukraine last year due to its high dependence on imports. Several similar tenders by Pakistan last year also failed to gain offers from suppliers.
