TOKYO: Pakistan says Japan’s biggest trading houses are among almost two dozen companies eyeing its liquefied natural gas purchase tender that it says is the largest on record. Mitsubishi Corp., Mitsui & Co. and Marubeni Corp., have expressed interest in the LNG order, which was announced earlier this month and has a deadline of Dec. 20, according to M. Adnan Gilani, chief operating officer at state-owned Pakistan LNG Ltd. The company is seeking bids for 60 cargoes over five years and separately 180 cargoes over 15 years, according to two tenders on its website published earlier this month.
“Most of the large traders were interested — the reception was much above expectation,” Gilani said in an interview in Tokyo on Friday. “It is the largest tender that has ever been floated.” Pakistan’s shift to LNG highlights the country’s efforts to tackle its energy crisis amid a growing population that faces hours-long blackouts and summer electricity deficits of as much as 5,000 megawatts, according to Tahir Abbas, an analyst at Karachi-based Arif Habib Ltd.
Japan, the world’s largest LNG importer, is seeking new markets to send fuel it has already contracted amid declining demand at home and uncertainty over nuclear restarts. A Mitsubishi spokesman, who asked not to be identified citing company policy, said the company is interested in the Pakistan tender and declined to say whether it will make a bid. A Marubeni spokesman declined comment. An official with Mitsui wasn’t immediately able to comment.
Pakistan’s natural gas production peaked in 2012 at the 39.45 million tons of oil equivalent, according to the BP Statistical Review. About half of the country’s energy mix was gas-based and infrastructure is waiting to be filled, according to Gilani. The country started its first LNG import terminal in 2015. LNG imports this year have benefited the power sector and helped to improve the country’s economic activity, the State Bank of Pakistan said in an annual report released last month.
The nation forecasts increasing imports to over 60 million tons a year by 2025, Shahid Khaqan Abbasi, Pakistan’s minister of petroleum and natural resources, said in the same interview. That would make the country the second-largest importer of LNG in the world, behind Japan. It’s unlikely Pakistan will import that much LNG, according to Kerry Anne Shanks, an analyst at Wood Mackenzie Ltd. The energy consultant estimates the country’s imports in 2025 will be between 5 million tons and 20 million tons a year.
“To put the volume into context, Wood Mackenzie expects China and India’s LNG imports combined to be just over 40 million tons in 2016,” said Shanks. “India started importing LNG in 2004, and China started in 2005.” Pakistan has one floating storage and regasification vessel in operation now and expects three more publicly-funded FSRUs to come online by 2018, according to Abbasi. Another three are expected to be privately-funded, and all seven units will boost the country’s import capacity to about 30 million tons a year by 2020, he said.
