After garnering quite a bit of press in the country for allegedly purchasing LNG cargo at one of the highest prices in Asia’s bleak industrial history, Pakistan State Oil (PSO) has now purchased LNG shipments at lower but still most expensive rates ever paid by the country.
Stephen Stapczynski, a Singapore-based Bloomberg reporter who covers energy and commodities in the region, tweeted news of the underlined development, further mentioning Qatar Petroleum who offered Pakistan the lowest LNG cargo price of around $15.93/MMBtu at a time when “spot natural gas prices have been surging from Europe to Asia amid a global supply crunch.”
Pakistan State Oil receives better offers in its re-issued tender seeking an LNG cargo for late-August 🇵🇰🚢
Qatar Petroleum offered the lowest price at the equivalent of about $15.93/mmbtu. For comparison, the original tender (which wasn't awarded) received a single offer at $20 pic.twitter.com/JsYVX8NvZ3
— Stephen Stapczynski (@SStapczynski) August 5, 2021
The deal was carried by the petroleum corporation after the previous bid was disregarded due to the exorbitant price. Be that as it may, the QP tender is still the highest price Pakistan has ever had to pay for an LNG cargo in its seven-year LNG procurement history.
UPDATE — Pakistan State Oil purchased the Aug. 29-30 delivery cargo from Qatar Petroleum at the equivalent of $15.93/mmbtu
That is the most expensive shipment of the fuel that Pakistan has ever purchased
— Stephen Stapczynski (@SStapczynski) August 6, 2021
PSO announced that the bid received for its re-tender “translates into $15.9271 per MMBtu (million British thermal unit), which is very competitive with current market rates.” It said that PSO saved the national exchequer Rs. 2.1 billion.
— PSO (@PSOPakistan) August 5, 2021
Other offers included $28.9876 per MMBtu for Brent from Gunvor Singapore and $24.0386 per MMBtu for Brent by Dutch energy and commodities company, Vitol.
PSO made good use of the underlined development in lieu of the public backlash that followed over its previous – now scrapped – award of LNG cargo at the rate of $20.055/MMBtu. In a statement, the petroleum corporation revealed that it “has entered into a new long-term supply contract with Qatar (QP), supplies against which will start in January 2022 and this will further reduce the basket price of LNG being imported in the country.”
PSO strongly refutes the incorrect news published today regarding awarding the costliest purchase of LNG cargo and non-disclosure of procurement rates. PSO always maintains absolute transparency in all its business dealings and practices. @MoWP15 #PSO pic.twitter.com/eYJ3wVjVQK
— PSO (@PSOPakistan) August 3, 2021
Besides the said remark, Qatar Petroleum is also expected to bring 4 additional cargoes in November and December this year, and at prices that will reportedly be lower than the market price during winters.
Added to the above developments, Energy Minister Hammad Azhar reportedly wrote to the PSO’s top brass advising transparency and smart deliberations in terms of procuring spot RLNG cargoes after the mid-week hiatus. In his letter, the minister explained that these instructions are important for ensuring marker efficiency, as well as keeping the public informed.
It should be noted that Pakistan’s reliance on liquefied natural gas imports has continued to grow, owing to the stagnating domestic production of the said resource. The Punjab province has been the biggest consumer of RLNG in recent times, and when it comes to energy shortages, its population pays more as compared to other provinces in terms of supply prices.