UPDATE 1-Four companies vie for Pakistan LNG’s multi-year import tender

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LONDON/SINGAPORE (Reuters) – Four companies have submitted offers into a 10-year import tender for deliveries of liquefied natural gas (LNG) to Pakistan, two sources familiar with the matter said on Friday.

The companies that placed the offers are Italy’s Eni, Azerbaijan state oil company SOCAR, PetroChina International Singapore, a unit of PetroChina Co Ltd and global trading house Trafigura, they added.

Commercial offers are expected to be opened on Aug. 2, one of the sources said.

State-owned Pakistan LNG issued a tender in early June to import 240 LNG cargoes of 140,000 cubic meters each for delivery over a 10-year period for the country’s second LNG terminal which can receive 600 million cubic feet per day (mmcfd) of natural gas.

The cargoes will be delivered into the Pakistan GasPort Consortium Ltd terminal, with first delivery expected between September 2019 to March 2020. Pakistan LNG is expected to award the tender in August.

It is unusual for companies to issue a tender for long-term LNG contracts, which are usually negotiated privately, and the move signals a push for greater transparency as the LNG market grows amid a push for more environmentally-friendly fuels, traders said.

The deal could be worth about $5 billion to $6 billion at current oil prices, an industry source estimated. Pakistan LNG requested that the contract be priced against Brent crude oil, in line with industry practice for long-term LNG contracts in Asia.

Both counterparties will also have the option for a price review after five years from the start of the contract, according to the bid documents.

Pakistan, with about 200 million people, is running out of domestic gas and has turned to LNG imports to alleviate chronic energy shortages that have hindered its economy and led to a decade of electricity blackouts.

The country’s biggest supplier currently is Qatar with whom it signed a deal in 2016 for 3.75 million tonnes of LNG a year for 15 years. It also has a five-year import deal with commodity trader Gunvor and a 15-year agreement with Eni.

Reporting by Sabina Zawadzki in LONDON and Jessica Jaganathan in SINGAPORE; editing by Richard Pullin

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