Pakistan Rejects Costly LNG Cargo Amid Ongoing Energy Crisis

Pakistan is facing severe energy shortages as it rejected an offer to buy liquefied natural gas (LNG) at three times the pre-war price, deepening the risk of blackouts. The sole bidder for the emergency tender was BP, which offered a cargo priced at $27 per million British thermal units (mmBtu), according to unnamed trading sources.

This price is significantly higher than the international LNG market rate of around $23.18 per mmBtu. As a result, Pakistan's energy crisis has worsened, with power generation costs surging by 38% in July from a year earlier due to rising LNG prices and the country's reliance on spot market purchases.

The rejection of BP's offer has led to the issuance of a new tender seeking the equivalent of 140,000 cubic meters of natural gas. Pakistan's energy shortages have been exacerbated by the recent blockade of the Strait of Hormuz, which has affected QatarEnergy's LNG exports and forced Pakistan to resort to spot market purchases.

The situation is dire in Karachi, where residents are experiencing rolling blackouts lasting up to 24 hours in some areas. The government is struggling to meet the country's growing energy demands, with the blockade of the Strait of Hormuz threatening to further exacerbate the crisis.