close
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
July 29, 2020

SOCAR offers record-low spot price in Pakistan LNG buy tender

Business

July 29, 2020

By Monitoring Desk

KARACHI: SOCAR Trading has placed the lowest offer into a spot buy tender by Pakistan LNG Ltd (PLL) for a liquefied natural gas (LNG) cargo for delivery in late August, a notice posted on PLL’s website said on Tuesday.

SOCAR’s offer for the cargo is about 5.74 percent of Brent crude oil prices. This works out to about $2.20 per million British thermal units (mmBtu) for the cargo to be delivered over August 27 to 28 and is a record low LNG price secured by the PLL.

This is lower than the Asian LNG spot price LNG-AS for August which on Friday was estimated to be about $2.35 per mmBtu.

Three other companies who had technically qualified for the tender placed offers ranging from 7.8 percent to 10.4 percent of Brent crude oil prices.

They are Gunvor Singapore, PetroChina International Singapore and Trafigura, according to the notice.

Trafigura Pte Ltd quoted 10.38 percent; PetroChina International Singapore quoted 8.35 percent and Gunvor Singapore offered to supply the goods at the rate equivalent of 7.84 percent of Brent crude.

The prices are expressed in the document as a ‘slope’ of crude oil prices, a percentage of the Brent crude price, and are typically a pointer for the opaque spot LNG market.

Pakistan has resumed spot buying of LNG with state-run Pakistan LNG Limited (PLL) inviting bids for supply of three LNG cargoes (140,000 cubic meters each) to be delivered in August and September, 2020 after a gap of six months.

PLL had floated its last LNG spot purchase tender in November 2019 for cargoes to be delivered in February 2020.

The country resumed oil product imports in May after a month-long absence.

The resumption of imports came as domestic demand picked up after nationwide COVID-19 lockdown measures were eased.

Under the less stringent smart lockdown in place, commercial and industrial activity has resumed. Expected annual import of LNG would rise 15-30 million tonnes over the next four to five years, according to official estimates.

Pakistan is adding at least 300,000 gas consumers every year who consume local production at cheap rates elbowing out productive sectors to rely on imports.

Since 2015, over 19 million tons of LNG has been imported, while two re-gasification LNG terminals were operational and several in queue.

Pakistan LNG has a separate tender to buy two LNG cargoes for delivery in September. That tender closes on August 4.