Pakistan LNG Limited (PLL) has allegedly breached confidentiality and jeopardized upcoming deliveries of Liquefied Natural Gas (LNG) by using the rate offered by the State Oil Company of Azerbaijan Republic (SOCAR) to reduce the bid amount from the lowest bidder OQ trade.
PLL used the price supplied by SOCAR to further decrease the bid price from the lowest offer by OQ Trading of $18.46 per MMBtu for one cargo scheduled for 8-9 January 2024, reported a national daily.
OQ Trading’s bid was followed by Vitol Bahrain at $18.58, QatarEnergy Trading at $19.43, and Trafigura at $19.64 per MMBtu. OQ Trading submitted the lowest bid, however, the price was still more than PLL’s requirement.
SOCAR was initially hesitant to offer the price of one cargo for the month of January due to increasing LNG costs. However, once the bids were opened, the PLL Board contacted SOCAR for delivery in January. SOCAR offered a rate of $17.96 per MMBtu, but PLL contacted OQ Trading, the lowest bidder.
PLL asked the UAE-based bidder to match the SOCAR offer. The company improved its offer to $17.95 per MMBtu.
The company received an offer for the LNG shipment for January at $17.95 per MMBtu by utilizing SOCAR’s pricing as a bargaining tactic with the lowest bidder. This has irritated SOCAR as it believes PLL has breached confidentiality, which is contrary to the spirit of the government-to-government agreement. SOCAR says PLL has no right to compare the bidders’ prices to the price offered under the GtG contract.
Notably, SOCAR first made the cheaper offer of $17.96 per MMBtu compared to the bid price supplied by OQ Trading at $18.46 per MMBtu.
Meanwhile, Pakistan will start getting four cargoes from Qatar at 10.2 percent of the Brent price in January 2024. At terminal one, the country already receives five cargoes from the same country at 13.37 percent of the Brent price.
ENI also offers short-term cargo at 12.05 percent of the Brent price. Because the demand for petrol in Sui Northern increased to 1,100 MMCFD, and 960 MMCFD in January, Pakistan needs two additional spot cargos in January.