ISLAMABAD: The GtG deal with Azerbaijan on offering one LNG cargo a month has landed into the red zone because of the confidentiality breach allegedly done by Pakistan LNG Limited (PLL). The PLL used the price offered from SOCAR, an Azeri state-owned company, as a tool to bring down the bid price from lowest bidder OQ trading, which was at $18.46 per MMBtu, senior officials involved in the bidding process told The News.
The OQ Trading on Friday offered the lowest bid of $18.46 per MMBtu for one LNG cargo to be delivered on January 08-9, 2024, followed by Vitol Bahrain at $18.58, QatarEnergy Trading at $19.43, and Trafigura at $19.64 per MMBtu. The OQ Trading offered the lowest bid, but the price was still higher than the previous spot cargoes procured by Pakistan LNG Limited.
Earlier, SOCAR was evasive from offering the price of one cargo for the month of January on account of higher LNG prices. However, the PLL Board met after the bids were opened and decided to contact SOCAR for its offer for January LNG cargo.
In return, SOCAR offered the LNG price at $17.96 per MMBtu, but PLL management cleverly contacted OQ trading and let it know about the SOCAR offer which was under GtG, not the bidding process.
It asked the lowest bidder to match the SOCAR offer. The OQ trading revised down its offer to $17.95 per MMBtu than the SOCAR-offered price below one cent. This is how the PLL managed the LNG cargo for January at $17.95 by using SOCAR’s price as a tool to bargain with the lowest bidder. This may warrant legal action by SOCAR.
The PLL after getting the price offer from SOCAR did not contact again for further decrease but preferred to ask OQ trading to match its price. The price under the GtG contract can’t be matched with the bid price.
The sources said the price difference between the lowest bid price of $18.46 per MMBtu from OQ trading and SOCAR’s offer was $1.5m per cargo but then the lowest bidder gave a price of $0.01 cheaper to get the order. One cent reduction means $32,000 reduction in LNG cargo price.
“This has virtually annoyed SOCAR as it is of the view that PLL has breached the sanctity of confidentiality, which is against spirit of GtG deal. It says PLL has no right to use the price offered under the GtG contract with the bidders’ price. SOCAR came up with the offer under its contract at $17.96 per MMBtu with the impact of a lower price of $1.5 million a cargo compared to the bid price offered by OQ trading at $18.46 per MMBtu,” officials said while quoting the SOCAR management, which got agitated after confidentially violation.
When contacted, SOCAR didn’t reply in detail but confirmed that confidentiality had been breached. However, this scribe contacted time and again PLL MD Masood Nabi who did not respond to the calls. He was also sent a question on his WhatsApp but he did not respond to the calls. The question from The News correspondent reads, ”I have learnt that PLL has awarded the contract to OQ trading at $17.95 per MMBtu against its lowest bid of $18.46. Also came to know that PLL asked SOCAR to give its offer soon after the bids were opened for January. SOCAR offered the price under its GtG contract at $17.96 per MMBtu, but PLL by breaching confidentiality asked OQ trading to match and it offered a lower price by one cent at $ 17.95 per MMBtu. Don’t you think PLL played foul with SOCAR and it may go for legal action? Plz reply in detail.” The same question was sent to the PLL board chairman and the spokesman for the Petroleum Division as well, but the scribe did not get a reply.
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