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PM takes notice of ‘confidentiality breach’ in LNG deal

Kakar directed the secretary petroleum to look into the matter of confidentiality breach with SOCAR - an Azeri state-owned company - and submit a report to him

November 28, 2023
This photo shows Pakistans caretaker Prime Minister Anwarul Haq Kakar. — X/@anwaar_kakar
This photo shows Pakistan's caretaker Prime Minister Anwarul Haq Kakar. — X/@anwaar_kakar

ISLAMABAD: The caretaker Prime Minister Anwaarul Haq Kakar sprang into action over the reported breach of confidentiality by Pakistan LNG Limited (PLL) as reported in ‘The News’ story and directed the secretary petroleum to look into the matter of confidentiality breach with SOCAR - an Azeri state-owned company - and submit a report to him.

Confirming the development, the senior officials of the energy ministry said, “Yes, the Prime Minister has taken serious notice of the confidentiality breach which may endanger the GtG agreement with Azerbaijan and to this effect the top functionaries of the ministry remained busy and spent the whole day trying to find out as to why it had happened.”

The Energy Minister Mohammad Ali is also accompanying the premier during visit to the UAE and the report will be submitted to the energy minister who will then explain to the PM on the issue, they added.

The energy ministry official said the ministry is now in the process of making new SOPs for purchasing the gas through bids and in future, it will not use the price from SOCAR under GtG agreement to bargain with the bidders price. He admitted that the PLL board and its management had played the foul by using the price offered by SOCAR under the GtG contract for further lowering the price of LNG cargo from the lowest bidder. This will lead to the mistrust not only among the LNG trading companies but also with the friendly country of Azerbaijan.

The official said that the PLL board and its management has made this wrong decision collectively which is why no one personally will be fixed for this wrong decision. The decision has helped save Rs800 million but it triggered the mistrust among the LNG trading companies and Azerbaijan’s SOCAR with which PLL is in GTG agreement for LNG cargo a month.

Quoting the senior officers involved in the bidding process, ‘The News’ published the story “LNG deal with Azerbaijan’s SOCAR may hit snags over breach of confidentiality’ reporting that the PLL used the price offered from SOCAR as a tool to bring down the bid price from lowest bidder OQ trading, which was at $18.46 per MMBtu. However, the price was still higher than the previous spot cargoes procured by Pakistan LNG Limited.

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.