Gunvor Group, one of the world’s largest independent commodities trading houses by turnover, Thursday announced that it has settled all outstanding legal proceedings on terms satisfactory to all concerned with state-run Pakistan LNG Limited.
In a short statement, it said that the parties look forward to continuing to work together. However, the terms and details of the settlement are subject to confidentiality agreements, it added.
What happened between Gunvor and Pakistan
Last year, Bloomberg reported on how decisions taken by Gunvor had severe repercussions for poor countries like Pakistan reliant on energy imports.
With Russian forces on the verge of invading Ukraine, Gunvor traders sought to capitalize on the imminent energy crisis by canceling a lucrative liquefied natural gas (LNG) deal with Pakistan, redirecting the shipments to more profitable markets dominated by far richer countries, according to the report.
As Gunvor and Eni SpA, another energy giant, severed their commitments, Pakistan plunged into an energy crisis and was forced to pay record spot-market rates for LNG from other suppliers.
The reported explained the intricate schemes by Gunvor and Eni, leveraging legal terms such as “force majeure” to justify canceling contracts.
The traders’ decisions were described as legal on the surface but demonstrated a ruthlessness that exploited the vulnerabilities of an underdeveloped nation like Pakistan. Gunvor, in particular, used novel interpretations of contract terms to maximize profits, diverting LNG shipments to wealthier countries and achieving record profits of $2.4 billion in 2022.
