Monday February 06, 2023

Pakistan decides to procure costliest LNG cargo to avert looming gas crisis: sources

Efforts also underway to convince LNG companies who have backed out of agreements signed with PLL to review their decision

By Web Desk
November 07, 2021
A file photo of LNG cargo.
A file photo of LNG cargo.

In view of a possible gas crisis in the winter season across the country, the government has decided to procure an LNG cargo at a historic high price of $30.6 per million British thermal units (mmbtu), it emerged Sunday.

Well-placed sources said that the state-owned company, PLL, had issued an emergency tender on November 2, seeking bids for spot cargoes after two LNG trading companies, ENI and GUNVOR, backed out of providing two LNG term cargoes due to be delivered on November 19-20 and November 26-27.

The PLL received five bids with higher prices ranging from $29.8966 to $31.0566 per mmbtu from international LNG trading companies for two spot LNG cargoes to be delivered in the last 11 days of the current month, the sources added.

The PLL has decided to buy an LNG cargo at $30.6 mmbtu, while efforts are underway to buy one more LNG cargo to meet the gas demand in the country.

Meanwhile, efforts are also underway to convince the LNG companies who have backed out of the agreements signed with PLL to review their decision in the face of skyrocketing gas prices in the international market, the sources added.

PLL receives expensive bids

A day earlier, the Pakistan LNG Limited (PLL) had received five expensive bids for emergency LNG cargoes to avert the looming gas crisis in the country.

According to the details PLL had received bids with higher prices ranging from $29.8966 to $31.0566 per mmbtu from international LNG trading companies for two spot LNG cargoes.

The country had gotten the lowest bid for November 19-20 from Vitol Bahrain at $29.8966 per mmbtu and for November 26-27 from Qatar Petroleum Trading at $30.6500 per mmbtu.

The PLL board had held a meeting, which lasted for hours, to decide if it was to purchase the LNG cargoes at the lowest bids, which are factually at a higher trajectory in terms of prices. The PLL top management, under direction from the Petroleum Division, was tight-lipped and not ready to share the decision.

PPP demands judicial probe into LNG scam

Earlier today, it was reported that PPP senior leader Mian Raza Rabbani called for a judicial inquiry into the recent LNG scam, saying that Pakistan is moving towards a gas crisis due the government's incompetence and non-transparent policies.

“There will be shortages and increase in tariff in winter due to the new LNG bids ranging from $29.89 to $31.05 per MMBTU,” he said.

Rejecting the increase in the prices of petroleum, sugar and the power tariff, Rabbani said the IMF has completely taken over Pakistan. “Electricity rates increased by Rs.1.68 for domestic consumers and Rs1.39 for commercial and industrial consumers,” he said, adding that the government, in the darkness of Thursday night, increased the price of petrol by Rs8.03 per litre and the price of diesel by Rs8.14 per litre.

“Two weeks ago, the price of petrol was jacked up by Rs10.49 per litre,” he said.

The IMF liquidators are occupying decision-making positions and are pushing the country towards an economic collapse, he said. “This can have disastrous consequences for the federation,” he said, adding that the failure of the government to take action against the sugar mafia despite the commission report has resulted in sugar mills once again earning lofty profits by selling sugar at Rs140 per kg.