Pakistan energy shortage could last years, blackouts expected this year: Report
Pakistan Energy Shortage: Not one supplier responded to Pakistan LNG Ltd.’s tender to buy the power-plant fuel for between four to six years starting January.
Pakistan’s acute energy shortage is at risk of lasting years after the government was unable to secure a long-term supply of liquefied natural gas.
Not one supplier responded to Pakistan LNG Ltd.’s tender to buy the power-plant fuel for between four to six years starting January, said traders with knowledge of the matter. The tender, which closed Monday, was seeking to procure one cargo of LNG each month.
The cash-strapped nation has been hit with widespread blackouts this year after several failed attempts to buy gas from the expensive spot market. It tried to get a long-term deal looking for more reasonable prices, but that hasn’t materialized.
Read more: On Imran Khan leaked audio controversy, Pak PM says, ‘Thief creating chaos’
There’s little LNG supply available until 2026 when massive new export projects start up, according to traders. Many spot cargoes are currently going to Europe, where buyers are willing to pay high prices in the rush to secure gas to replace dwindling Russian pipeline flows. That’s leaving developing nations facing energy shortages and economic uncertainty for years.
The latest blow comes at a difficult time for Pakistan, which is already struggling with high inflation and falling currency reserves. Some LNG suppliers are hesitant to sell fuel to the nation out of fear it may not be able to make future payments, according to traders.
Pakistan’s gas distributor Sui Northern Gas Pipelines Ltd. plans to supply 100,000 LPG cylinders to consumers to deal with a potential gas shortfall this winter, it said in a notice to the stock exchange. The company that caters to customers through pipelines in the northern half of the nation has been asked by the government to take steps to meet energy requirements.