The country might be hit by a brewing LNG gas crisis again during September and October due as the government has not bought eight spot LNG cargoes for the said months, The News reported.
By Khalid Mustafa
The government refused to procure the LNG as the gas was offered at a higher cost in the range of $13.787-$16.0 per MMBTU (per million British thermal units), according to the publication.
The Pakistan LNG Limited (PLL) — a 100% state-owned company — had floated the tender for eight LNG spot cargoes — 4 for September and 4 for October — but because of higher-than-expected rates, the government cancelled.
However, PLL has not uploaded the details of the bids it received on its official website, raising several eyebrows.
Top sources in the Petroleum Division feared that the country could suffer from another gas crisis due to a shortage in the aftermath of the rejection of higher bids for spot cargoes.
Earlier this week, a gas-cum-electricity crisis had hit the country because of dry docking of FSRU at the Engro LNG Terminal, Annual Turn Around of a gas field in Sindh, and low hydel generation from the Tarbela Dam.
Petroleum Division officials told The News that the global LNG market right now is too bullish, which has driven the LNG prices to the higher side.
However, the official said the government would continue to monitor the market trends and if the prices start tumbling, the PLL will retender LNG cargoes for September and October.
When asked as to why PLL has not uploaded the details of bids’ on its website, the official said there was no need for it as the government had cancelled the tender due to a higher bid price.
Under PPRA, it is mandatory to upload details when a tender is issued and bids are accepted. The official said no LNG importing country uploads the bids’ details on the website even if the prices are accepted because they do not want to embarrass the LNG suppliers who also supply the gas to other countries.
The PLL earlier got the bids in the range of $10.2937 per MMBTU to $11.7747 per MMBTU for July cargoes, and $10.51 to $10.8312 for cargoes to be delivered in August.
In case there is no respite in LNG prices in the international market, the official said then the government would be left with no option but to procure more furnace oil and diesel to run power plants to generate the costly electricity to scale down the power crisis likely to emerge in September and October.
Four LNG trading companies had offered consignments for eight time slots for September and October. BB Energy had submitted the highest bid price of $16 per for its LNG cargo for delivery in Pakistan on October 21-22.
Gunvor also offered two cargoes at the higher price of $15.60 per MMBTU, for September 6-7 and another for September 10-11.
The Total trading company offered its bid price at $14.67 per MMBTU for September 26-27. However, Qatar offered the lowest bids in the range of $13.79-$13.99 per MMBTU for four cargoes.
Qatar also offered its first cargo for September 16-17 at $13.79 per MMBTU. Similarly, for September 30 and two more for October 11-12 and October 26-27 at Qatar had also offered bids at $13.99 per MMBTU.
Originally published at Geo tv