Karachi: Last year in December PTI’s government faced backlash over the failure to attract liquefied natural gas (LNG) bids from international companies, but eventually the inability turned into a blessing as Pakistan was able to buy LNG at low rates.
Last week, the supply defaults of liquefied natural gas (LNG) by two international state-owned firms, Enoc and SOCAR, have proved to be a silver lining for Pakistan as two urgent substitute tenders for February brought between 16-18 percent cheaper prices as the global demand dropped.
For the second half of next month, the urgent tender floated by state-run Pakistan LNG Limited (PLL) received the lowest offer of $9.58 per million British thermal unit (MMBTU) or 19.5pc of Brent for Vitol Trading’s Feb 21-22 window and $8 per MMBTU or 16.3pc of Brent for the Feb 25-26 window from Qatar LNG.
In comparison, the lowest bids from defaulting parties for almost the same period were $11.48 per MMBTU or 23.41pc of Brent for Feb 15-16 by SOCAR of Azerbaijan and $10.22 per MMBTU or 20.09pc of Brent by Enoc of UAE for Feb 23-24.
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Educated sources in the PLL said that not only did SOCAR default on its February offer but also attempted to blackmail the PLL without bidding to contribute about 11 shipments between February and September at higher market rates under the government-to-government (G2G) agreement.
The records indicate that PLL and SOCAR remained involved in negotiations until the last minute, but the cabinet approval condition for the G2G agreement stopped the process.