Through standby letters of credit (SBLCs) to foreign banks, Pakistan LNG Limited (PLL) has promised prompt payments to international LNG suppliers for spot cargoes till December 2028.
In the upcoming six months, PLL, a state-owned enterprise (SOE), will receive one cargo per month—72 in all.
The corporation began this month by releasing tenders for it, with a 13 September deadline. However, due to Pakistan’s continuous balance-of-payments problems, the LNG suppliers requested sovereign guarantees or payment assurances.
According to a PLL statement, the business will issue SBLCs from a bank that has been scheduled and has received at least an AA long-term credit rating from a major international credit rating agency. The business also suggested that United Bank Limited might be used to issue the letters. PLL further requested that the companies submitting bids confirm SBLCs with several foreign institutions, including Morgan, Citi Bank, and Deutsche Bank.
The Ministry of Finance’s sovereign guarantee was demanded, but the corporation declined.
Additionally, the SOE requested written confirmation from the bidders that they could supply a minimum of one million tonnes of LNG year between 2023 and 2028 by the published tender. In addition, the corporation requested copies of the bill of lading, the final discharge report, and any other pertinent paperwork to prove that the bidder was a supplier.
PLL, on the other hand, opposed altering the specifications stated in the tender, including the number of cargoes, the cost, and the length of the supply.
It is important to note that the nation struggled with a severe LNG scarcity during the Russia-Ukraine conflict and was unable to obtain any spot cargo for several months. PLL had published tenders for the supply of 12 cargos till December 2023 and the remaining 60 cargos between 2024 and 2028 to alleviate the deficit.