KARACHI: Pakistan is unlikely to purchase liquefied natural gas (LNG) cargoes on the spot market until at least the beginning of winter in November due to an oversupply and high prices, according to the country’s petroleum minister.
Extreme temperatures across Asia have driven countries to seek more LNG cargoes to meet higher power demand, pushing spot prices to their highest since mid-December. Asia spot LNG recently traded at $12.00 per million British thermal units (mmBtu).
Despite heatwaves baking Pakistan’s 300 million people with near-record temperatures, the country’s LNG demand remains “subordinate to supplies,” Petroleum Minister Musadik Masood Malik told Reuters.
“The question of getting more LNG when we can’t sell the amount of LNG that we already are obtaining from our long-term contracts, it does not apply,” Malik said in an interview.
Pakistan, which relies on natural gas for over a third of its electricity, is expected to see a consecutive annual decline in power use for the first time in 16 years due to higher tariffs curbing household consumption. The IMF’s bailout of Pakistan last year led to higher retail prices, with a series of power tariff hikes over 12 months being a key part of the IMF programme that ended in April.
Industrial demand has also remained subdued due to a cloudy economic outlook.
