Saturday September 25, 2021

Emergency tenders: PLL again gets costly LNG bids for Oct-Nov

September 03, 2021
Emergency tenders: PLL again gets costly LNG bids for Oct-Nov

ISLAMABAD: Amid the bullish prices of spot LNG in international market, Pakistan LNG Limited (PLL) got 12 bids for five cargoes for October-November in the range from $19.8477 up to $22.4866 per MMBTU — again on the higher side in response to the emergency tender opened here on Thursday.

The PLL had earlier issued a tender on July 24, seeking bids for seven cargoes for October-November and it opened the bids on August 24 for seven cargoes at price range from $17.1447 to up to $25 per MMBTU. But it didn’t take the decision to honour the bids because it could hold the bids’ validity for 15 days after opening date of August 24. It went for the emergency tender with the aim to get cheaper prices and got the five lowest bids on Thursday, which were also on the higher side.

By getting bids in response to the emergency tender, however, PLL has put itself in a position to decide to honour some bids which it had earlier got on August 24 relatively at lower prices for October-November.

The PLL on Thursday declared five LNG trading companies technically fit for the bids. The five companies include PetroChina International, Gunvor Singapore, Vitol Bahrain, Total Gas & Power and Trafigura. They came up with a total 12 bid prices ranging from $19.8477 up to $22.4866 per MMBTU.

Trafigura submitted its lowest bid of $19.8477 for the time window of October 8-9, $20.2877 for October 23-24, $20.777 for October 28-27 and $20.9677 for November 12-13. And PetroChina International submitted the lowest bid at $20.3888 for the cargo to be delivered on November 6-7.

The PLL is likely to retain the two bids Total Gas & Power submitted in earlier tender opened on August 24, one with price at $17.1449 per MMBTU for the cargo to be delivered on October 17-18 and $17.53350 per MMBTU for the delivery window of November 16-17. Likewise, PLL may also honour the bids Vitol Bahrain submitted in the earlier tender, which was opened on August 24 as it had come up with the price of $18.9966 to be delivered on October 27-28.

The same company had also submitted its price at $19.6966 per MMBTU for cargo to be delivered on November 11-12 and $20.9266 per MMBTU for the cargo that is to be provided on November 26-27.

Energy experts said that LNG prices have increased more than the price of furnace oil, which is why Bangladesh has decided not to rely on LNG anymore to cater to energy demands and it has decided to use furnace oil for power generation. India has also started feeling the heat of increasing spot LNG prices in the international market.

A Power Division source said that in the wake of massive surge in the price of spot LNG cargoes being purchased by PSO and PLL, the basket price of RLNG has increased manifold and almost all IPPs of 2002 power policy are being run on furnace oil because of lower furnace oil prices as merit policy.