ISLAMABAD: Pakistan LNG Limited attracted tremendous participation of LNG suppliers and trading companies for the latest spot tender floated on March 22, 2021, seeking 8 cargoes for April-May-June...
ISLAMABAD: Pakistan LNG Limited (PLL) attracted tremendous participation of LNG suppliers and trading companies for the latest spot tender floated on March 22, 2021, seeking 8 cargoes for April-May-June period.
Pakistan got the bids from 12 LNG trading companies out of which ENI, Qatar Petroleum Trading, PetroChina and Vitol came up with the lowest prices in the range of $6.70-$6.925 per MMBTU. ENI has offered lowest prices for three cargoes, Qatar Trading emerged as lowest bidder for two LNG cargoes, PetroChina for two cargoes and Vitol offered the lowest price for one vessel.
The other companies who also participated in the bids but failed to offer the lowest prices include BB Energy, Gunvor Singapore, BP Singapore, DXT commodities, Trafigura, POSCO, Total Gas and Power, and ENCO.
“The maximum participation in the bidding process has happened because of the PPRA exemptions in procuring the LNG product. Earlier, the participation of the bidders remained restricted because of the PPRA rules,” a senior official at the Petroleum Division told The News. “Now we have moved to fixed pricing instead of slope linked to Brent crude price in the wake of PPRA exemptions and more importantly PLL will now be able to have bids in limited response time and limited bid validity.”
The contract prices for eight LNG vessels the country received in fixed price in US dollar terms, not linked with Brent.
ENI offered the lowest bid at $6.7 per MMBTU for three cargoes; first one to be delivered to Pakistan on April 30, 2021, second one on May 26-27 and third one to be delivered on June 18-19. Qatar Petroleum Trading emerged as lowest bidder for two LNG cargoes; one to be delivered on May 11-12 at $6.825 per MMBTU and other one on May 16-17 at $6.925 per MMBTU. PetroChina is the third company that also appeared as lower bidder for two vessels at $6.835 per MMBTU to be delivered on June 8-9 and June 27-28 respectively. However, Vitol offered the bid with a price of $6.7832 per MMBTU for only one cargo to be delivered on May 31.
PLL on March 22 invited bids for delivery of eight cargoes for April-May- June period and set the deadline of March 30 PLL reduced the time between bid evaluation and award of the contracts. PLL had also asked the bidders to offer their bids in fixed dollar price instead of slope linked to Brent crude price.
PLL had always sought in the past the bids as a percentage of Brent crude price and with longer terms for bidding, bid evaluation, award of contract and holding bidders for the longer period. This resulted in various forms of limitations and higher bid prices as suppliers had to hold on their ships and LNG. This was unlike private spot players who could make final decisions on a short notice.
Late last month, the Federal Cabinet had granted partial exemption to PLL from Rule-35 of the Public Procurement Regulatory Authority (PPRA) rules by relaxing the period between announcement of evaluation report and award of tenders for spot cargoes. More than half of Pakistan’s total LNG imports are based on long-term contracts while the rest of the required quantities are met through spot tenders.