Pakistan turns down second LNG spot cargo offer despite lower price

According to Profit by Pakistan Today, Pakistan LNG Limited (PLL) has turned down a reduced emergency spot cargo offer from BP Singapore, priced at $26.7128 per MMBtu, after deciding the figure remained too high. It is the second BP Singapore offer the company has refused in a matter of days for September delivery. An earlier quote of $26.969 per MMBtu for a September 4 to 8 cargo was also rejected.

For the September 8 to 12 delivery window, two suppliers submitted bids. BP Singapore came in lowest at $26.7128 per MMBtu, while PetroChina asked for $26.98 per MMBtu. Although BP's latest figure was approximately $0.26 per MMBtu under its previous offer, the PLL board chose not to buy.

The rejections come as turmoil around the Strait of Hormuz raises the cost of buying LNG on the spot market. Higher shipping risk has pushed up freight and insurance charges, and suppliers are building geopolitical risk into their prices. According to the report, accepting these cargoes would lift the expense of LNG-based power generation, while declining them leaves less extra gas for the system.