GUNVOR, a Singapore-based LNG trading company, has informed the government officials that it will not be able to deliver its term LNG cargo due on January 10, 2022, claiming force majeure, reported a national daily.
A senior official from the Energy Ministry told the national daily that the company has not notified Pakistan LNG Limited (PLL) as to when this term cargo will be provided.
This is the second default by GUNVOR in the current winter season 2021-2022. The company previously defaulted from the term cargo on November 19-20, 2021.
The Italian company, ENI, also defaulted from the delivery of its cargo on November 26-27, 2021. Previously, the company had backed out in August 2021.
The report stated that the intimation of non-availability of LNG cargo from GUNVOR comes at a time when LNG price in the spot market is hovering at $35-40 per MMBTU.
The government has already cut gas supply to the export sector in Punjab and has shut down the supply for the non-export industry and CNG sectors as of  December 15. Massive shortages are also faced by domestic consumers across the country at breakfast, lunch, and dinner times.
The report quoting top officials from the Energy Ministry stated that the demand for gas in Punjab and KPK’s domestic sectors had gone up to 800-900 mmcfd. In January 2022, this demand will further reach 1200 mmcfd.
System production has already declined by 1 billion cubic feet, dropping from 4200 mmcfd to 3200 mmcfd. Given the failure of the authorities in ensuring 4 LNG cargoes (two in December and January each) and the latest default by GUNVOR on January 10, the gas crisis will worsen.
The official stated that it is time for the government to make use of furnace oil, abundantly available in the country, for power generation and redirect the gas to the export industry at $9 per MMBTU.
The report further added that ENI and GUNVOR had not given an undertaking to provide term cargoes as replacements for the earlier default in November. The companies will be penalized with a fine equal to 30 percent of the value of the term cargo.
