In a significant development, Pakistan is facing the possibility of a severe gas crisis in January 2024, with concerns rising over the expected shortage of cheap liquefied natural gas (LNG) from Azerbaijani company Socar.
As per information from senior officials in the Ministry of Energy, Socar’s anticipated shortfall in providing cheap LNG cargo in January could significantly impact the country’s gas supply. The expected shortage projected to increase from 360 million cubic feet per day (mmcfd) in December 2023 to a concerning 470 mmcfd in January 2024.
Despite the increasing demand for gas in the domestic sector, where availability currently limited to just 8 hours a day during essential times such as cooking, the situation expected to worsen due to Socar’s potential unavailability.
Government authorities now faced with the challenge of potentially reducing gas availability for the domestic sector from 8 hours to a mere 6 hours in response to Socar’s expected LNG shortage. Officials have expressed concerns that Socar may not be able to offer cheap LNG cargo for January, necessitating special measures to address the impending crisis.
During the previous administration led by Prime Minister Shahbaz Sharif, a crucial deal struck with Socar, obligating the company to supply one LNG cargo every month. The agreement, signed on July 25, 2023, for a one-year term with the option of a one-year extension, aimed to ensure a steady supply of LNG for Pakistan.
However, Socar’s hesitancy to offer LNG cargo for January reflects the challenges in the global economy, contributing to the growing difficulty in securing affordable LNG.
While Pakistan LNG Limited (PLL) is working on a marketing plan for spot cargoes in January, challenges persist as PLL seeks exemptions from certain provisions of the Public Procurement Regulatory Authority (PPRA) rules. These exemptions relate to a 30-day response time and the validity period of 15 days for bids.
Once PLL obtains the necessary exemptions, the company will proceed with tenders for spot cargoes in January, with a commitment to providing a swift response and decision on the same day, within a few hours.
As the nation braces for the potential gas crisis, stakeholders are closely monitoring developments, emphasizing the need for strategic measures to mitigate the impact on both consumers and industries reliant on a stable gas supply.
 from Azerbaijani company Socar.){kind=link}