As published by the Reuters, Italy, and China are racing side by side to win the mega LNG (liquefied natural gas) tender from Pakistan. The tender is said to the biggest of its nature as it worth around 5 billion USD to 6 billion USD according to the current conditions of the market. The value of the contract is calculated against Brent crude oil expressed as a price slope or percentage of the oil contract. As the contract covers a long period of time, higher price slopes (around 11% to 12%) are likely to be used, as compared to the usual slopes.
Pakistan had issued the tender to support its LNG supply last month in June, for which bids were taken till Thursday. With an estimated demand of 25 million tons a year, Pakistan would be among the top five biggest buyers of LNG. Eni, the trading arm of Azeri state oil company SOCAR, PetroChina International Singapore, a unit of PetroChina Co Ltd and global trading house Trafigura submitted had their bids for the massive tender.
The 10 years tender for 240-cargoes (of 140,000 cubic meter each) has attracted much attention of the potential buyers due to its size. While there is an ongoing corruption case in the accountability court of Pakistan for alleged kickbacks in previous LNG tender, the government of Pakistan will much likely publish the lowest bid offered by the companies.
Under the contract, Pakistan will start receiving the LNG supply via Pakistan GasPort Consortium Ltd. terminal. Parties to the contract would have an option to review the set prices after a period of five years from the start of the contract. The country is expecting the first delivery between the last quarter of 2019 and the first quarter of 2020. Currently, the biggest supply of the commodity comes from Qatar with a handsome figure of 3.75 million tons a year.