Gas crisis likely to increase in January

Islamabad: The gas crisis in the country is likely to be severe in January.

Officials say that non-availability of cheap LNG cargo from Azerbaijan’s SOCAR is expected.

According to the details, senior officials of the Ministry of Energy told The News that there is a high possibility of non-availability of cheap LNG cargo in January 2024 from the state-owned company SOCAR of Azerbaijan.

The country was projected to have a shortfall of 360 million cubic feet per day of gas in December 2023, rising to 470 (MMCFD) in January 2024, prior to non-delivery of incoming LNG cargoes. Although the availability of gas for the domestic sector is limited to only 8 hours during cooking hours.

Read More: LPG prices increased by Rs 23.86 per kg

Now the expected non-availability of SOCAR cargo will exacerbate the gas crisis in January and force the government to reduce gas availability for the domestic sector from 8 hours to just 6 hours.

Concerned officials said specific feedback from SOCAR suggested it would not be able to offer cheap LNG cargo for January.

During the government of former Prime Minister Shehbaz Sharif, a GTG contract was signed with Azeri firm SOCAR under which it is obliged to supply one LNG cargo per month.

Pakistan and Azerbaijan signed an agreement on 25 July 2023 for one year, which can be extended for another year.

Under the agreement, SOCAR Trading Company UK will offer an LNG cargo 45 days prior to the start of the relevant delivery window (delivery period) and each offer for the cargo will have a fixed maturity period during which the PLL offer will be accepted.

SOCAR is pulling back from offering LNG cargoes for January as Western economies begin to show recovery and cheap LNG becomes harder to come by.

The Azeri firm is bound to make an offer 45 days before cargo delivery, so there is still time and SOCAR can come up with an offer for the month of January 2024, the official added.

Pakistan LNG Limited (PLL) is also planning to market its tenders for spot cargoes for January but PLL has sought two exemptions from PPRA rules, one for 30 days, from the response time of and second from the time of bid validity of 15 days and till now the process is ongoing.

Once the waiver is granted, PLL will go for tenders for the spot cargo for the month of January and will have to respond and make a decision on the same day after a few hours.