Islamabad December 20, 2021: Pakistan’s gas shortage looks set to worsen after Gunvor Group Ltd. said it won’t be able to deliver a cargo due early next month.
Gunvor can’t deliver a liquefied natural gas shipment, part of a long-term supply contract, on Jan. 10 because of a problem at the Freeport export facility in the U.S., according to a person familiar with the matter who asked not to be identified as the information is private. Pakistan and Gunvor are in discussions about a replacement cargo, the person said.
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Pakistan Current Account Deficit Increased to USD1.91 billion in November
The country’s energy ministry and Gunvor didn’t immediately respond to requests for comment. Freeport declined to comment, citing company policy. Freeport’s LNG terminal is operating at capacity and expected to receive 2.1 billion cubic feet of gas Monday.
Pakistan has become one of the fastest growing import markets for LNG in recent years as it replaces dwindling local supplies. However, international competition for the fuel — used as an electricity feedstock and for heating and cooking — has intensified this year due to global shortages.
Some parts of southern Pakistan, including the commercial hub of Karachi, have lost piped supply for the first time ever, and there are also shortages at power generators and compressed natural gas stations for vehicles.
The shortfall has more than tripled this month in the nation’s south compared with the same period last year, according to Sui Southern Gas Company Ltd. In response, the government is encouraging people to use more electricity and forcing them to buy bottled gas.
Pakistan imported 10 LNG cargoes in November, when Gunvor and ENI SpA also backed out from deliveries. Gunvor has a five-year contract to supply gas to the country, set at a price of 11.6247% of Brent oil. The global crude benchmark traded near $71 a barrel on Monday, implying a price of about $8.25/mmbtu, compared with current LNG prices in the spot market of $40.
