Pakistan recently purchased its priciest liquefied natural gas (LNG) shipment in approximately four years. This procurement was necessitated by a severe energy shortage exacerbated by the effective closure of the Strait of Hormuz.
State-owned Pakistan LNG Ltd. acquired the cargo for June 6-7 delivery from BP Plc through a tender that concluded on Thursday. This urgent purchase became necessary after a scheduled shipment from Qatar was canceled due to escalating tensions around the strait, according to traders familiar with the matter.
The increasing reliance on the spot market has seen Pakistan seeking emergency LNG supplies since April. Pakistan LNG Ltd. has been issuing tenders for spot cargoes, particularly in May, despite initial attempts to avoid the spot market in hopes of easing hostilities in the Strait of Hormuz and receiving cheaper supplies from Qatar. The country's local gas production is dwindling, making it increasingly dependent on imported gas, with disruptions in the Strait of Hormuz directly impacting its supply chain and leading to higher costs. Pakistan also bought an LNG shipment from TotalEnergies SE for April 27-30 delivery, its first spot market purchase in over two years at the time.
