ODISHA: The death toll from the collision of two Indian passenger trains in Odisha state has surged to 288
ISLAMABAD: Pakistan has decided to accept a total of six LNG cargoes at bid prices between $24.15 and $32.6 per million British Thermal Units (mmBtu) for delivery from May 1 to June 22 period to meet peak winter electricity demand.
The state-run Pakistan LNG Ltd (PLL) had floated six tenders last week for three spot cargoes each in May and June and followed up with another emergency tender for yet another cargo on the first of May as its long-term trading suppliers continuously defaulted on their contracts.
The PLL is now seeking compensation for defaults and resultant economic losses through the London Court of International Arbitration (LCIA).
A total of five bidders participated with 12 bids for all the seven tenders. There was no bid for one of the June 1-2 slots. For the remaining five delivery windows three international firms offered the lowest price which is still on the higher side. The average basket price is estimated to come down around $17-18 per mmBtu because of the impact of cheaper long-term contract prices with Qatar.
PLL officials said the emergency tender was floated on short notice for LNG delivery on May 1-2 under special procurement rules because of the last-minute default by ENI. Two bidders — Total Energies and Vitol Bahrain — responded with $29.67 per mmBtu and $29.792 per mmBtu respectively. Total Energies was declared the lowest commercial bidder at $29.67 per mmBtu.
For May 12-13 tender, two bidders namely Vitol Bahrain and QatarEnergy came up with $32.59 and $24.15 per mmBtu offers respectively. QatarEnergy was declared the lowest evaluated bidder. There was only one bidder Vitol Bahran at $31.778 per mmBtu for May 17-18 window and declared lowest. Two bidders Vitol and TotalEnergies came up with $29.056 and $26.87 per mmBtu, respectively for May 27-28 slot and TotalEnergies was declared the lowest.
For June 6-7 slot, Vitol and QatarEnergy came up with $31.73 and $27.65 per mmBtu bids respectively and QatarEnergy was declared as the lowest evaluated bidder.
Three bidders Vitol, TotalEnergies and OQ Trading came up with $31.694, $29.04 and $30.46 per mmBtu offers, respectively and TotalEnergies at $29.04 per mmBtu was selected.
With 7-8 cargoes mostly from Qatar, Pakistan’s average delivered LNG price has been around $11-12 but because of higher spot prices, the PLL has seldom accepted bids above $25 per mmBtu.
This would be perhaps the first time that Pakistan will have a total of 11 cargoes each in May and June including long-term contracts with Qatar.
This would mean that LNG terminal-1 operated by Engro would be operating almost at full capacity on Pakistan State Oil’s LNG cargos from Qatar while terminal-2 operated by Pakistan Gas Port will be processing 4-5 cargoes each in May and June, including two under long-term contract from Qatar and three spot cargos secured by PLL.
Pakistan was already in the grip of power shortages ranging between 3-7 hours per day in recent weeks as the previous government hesitated to order spot LNG tenders while long-term suppliers defaulted on almost a dozen in winters amid volatile international market.
The authorities have also been struggling to arrange furnace oil to make up for the LNG gap but in the process the additional monthly fuel cost adjustments had more than doubled over the reference prices, resulting in up to Rs6 per unit of additional electricity costs in the recent months. Against firm power sector demand of up to 900 million cubic feet, the gas companies have been struggling to meet even half of that, causing country-wide power cuts.
All Pakistan CNG Association leader Ghiyas Paracha welcomed the bids and their acceptance saying this would help reduce gas shortage and let CNG stations operate after long closures, adding it would reduce the gas shortage and supply to power plants specifically and other consumers as well.
It may be recalled that ENI and Gunvor (both long-term LNG supply contractors) have become habitual defaults in LNG supplies with four and seven cargo defaults respectively, at a great inconvenience and economic loss to Pakistan.
You May Also Like
ISLAMABAD: The Supreme Court is expected to take up on June 9 a Jamaat-i-Islami (JI) petition seeking directions
RAWALPINDI: A Pakistan International Airlines (PIA) aircraft, which was stopped at Kuala Lumpur International Airport