OGRA sets RLNG sale price at $13.22 per unit

The Oil and Gas Regulatory Auth­ority (Ogra) on Friday set the average sale price of re-gasified liquefied natural gas (RLNG) at about $13.22 per million British thermal unit for the current month, an increase of 2.33 per cent from last month’s $12.91 per unit.

The regulator had last week notified the RLNG sale price at $13.61 for August, about 5.5pc higher than that of July, which included the cost of most expensive spot cargo at $20.55 per unit (27.87pc of Brent). Pakistan State Oil (PSO) disowned its cargo, saying it had scrapped the bid. As a result, Ogra withdrew its notification a day later and cancelled the sale price.

On Thursday, the PSO reported that it had received a revised bid of $15.93 per unit (22.13pc of Brent) from Qatar Petroleum for a cargo to be delivered on Aug 29-30.

The regulator, therefore, issued a fresh notification and fixed the revised average RLNG sale price at $13.22 per unit.

The RLNG sale price in July was about 25pc higher than June.

Interestingly, Pakistan LNG Limited (PLL) had received a bid price of $10.69 per unit for almost the same delivery window (Aug 27-28) because it had held international bidding much earlier than PSO that got almost 49pc higher price even in the second bid. PSO said it had to go for spot cargo at a short notice because it was not required under the annual development plan given by Sui Northern Gas Pipelines Limited (SNGPL) for LNG imports. By the time international price had gone up.

The Ogra notification put the average import price of five term cargos from Qatar at $9.6 per unit compared to $15.93 for one spot cargo that came from Qatar. On the other hand, PLL’s one term cargo came in at $8.6 per unit while five other spot cargos ranged between $10.5 and $10.83 per unit. The weighted average sale price of all these 12 cargos thus worked out at $13.22 per unit for August.

The distribution of RLNG tariff is worked out on the basis of LNG-delivered ex-ship (DES), besides a number of other additional charges claimed by public sector companies and terminal operators.

Ogra said that PLL’s DES prices averaged $10.5 per unit but increased to $13.22 because of these additions. The DES price has increased by almost 35pc since April this year when it was slightly above $7 per unit owing higher international market rate.

Besides the DES price, PSO and PLL also are charging 0.6pc and 0.5pc, respectively, as retainage, while gas companies — SSGCL and SNGPL — are charging transmission and distribution losses of about 6.7pc. In addition, PSO and PLL are also charging 2.50pc of DES price as margin on import of LNG, more than 6pc of other import-related costs of PSO and PLL and terminal charges of about 41 cents per unit for Engro and about 39 cents of Pakistan Gasport.

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