Italian oil major Eni, China’s overseas energy unit PetroChina and two trading houses are vying to supply liquefied natural gas (LNG) to Pakistan in one of the largest tenders ever worth billions of dollars, two sources familiar with the matter said on Friday.
The 240-cargo 10-year tender, which is likely to be worth from $5 billion to $6 billion according to Reuters calculations and the estimates of another source based on current market conditions, was issued last month and closed on Thursday.
Pakistan is expected to be a significant growth driver in global LNG demand, with Wood Mackenzie estimating the country will need 25 million tons a year as domestic supplies dwindle and its economy grows. That would make it a top-five LNG buyer.
Eni and PetroChina’s Singapore unit were joined by the trading arm of Azeri state oil company SOCAR and commodities trader Trafigura in placing offers, the sources said.
Pakistan LNG, the state-owned company that issued the tender, declined to name any bidders.
“The technical bids for our long-term LNG supply tender were received and opened yesterday. Evaluations are underway,” it said.
SOCAR Trading SA confirmed it had bid. Trafigura said it does not comment on tenders. A spokesperson noted Trafigura was a stakeholder in the terminal due to receive the tendered LNG.
“Trafigura owns 150 (million cubic feet a day) of LNG import capacity in that facility, which is key to its plan to supply LNG and gas to Pakistan’s private sector,” the spokesperson said.
PetroChina and Eni did not respond to requests for comment.
The tender is keenly watched due to its size and because Pakistan, gripped in an anti-corruption drive under the government of Prime Minister Imran Khan, is expected to publish the lowest prices offered by the companies.
This will give valuable insight into the opaque LNG market, which is characterized by closed bilateral trades, secret long-term supply agreements and an over-the-counter spot market.
Commercial offers are expected to be opened on August 2, one of the sources said, when Pakistan LNG is likely to reveal bids.
The largest tender in recent years was issued by Egypt in October 2016 for 96 cargoes, but that was for a two-year period between 2017 and 2018 after the country suffered an acute gas shortage.
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