Pakistan LNG Limited (PLL) has allowed the private sector to import LNG for the month of November 2021 by using its underutilised capacity amid the forecast that the LNG rates in the international open market for the said month will stand at $27.75 per mmbtu.
The private sector companies term the move of the PLL tricky, arguing when the LNG rates in the month of November will be on trajectory to highest-ever prices, the state-owned company has offered the private sector to import LNG. They said that JKM (Japan Korea Marker) has forecast the LNG price at $27.75 per mmbtu for the month of November and PLL has given 30 days to the private sector to arrange LNG, which is highly questionable. They also argued that the PLL has failed to procure LNG as per its contracted capacity of 600mmcfd for the month of November and now it is advertising its unutilised capacity for the private sector to import LNG. However, it is not an easy task for the private sector to arrange LNG in a short span of time.
Industrial sources said that Russia has squeezed the natural gas supply to Europe for political reasons, which is why the demand of LNG has increased in the international market and given the situation, JKM has predicted the LNG prices for the month of November at the highest-ever rates close to $28 per MMBTU.
The PPL confirmed the development and said that it was going to issue an advertisement that will get published in the national dailies today (Tuesday) seeking import of LNG through the private sector. In the month of November, PGPL (Pakistan Port Gas Limited) LNG terminal will get only four LNG cargoes and PLL wants the private sector to import one cargo and use its underutilised capacity that will be available in the month of November.
More importantly, the 100 percent-state owned PLL has provided ease to private sector companies to import LNG at PGPL terminal at 10 percent security of the cost of cargo against the earlier demand of 100 percent security equal to the full cost of cargo. Top officials at the Energy Ministry said that as per PLL, importing spot LNG is difficult as it has to follow the PPRA rules and hold bids’ validity for 15 days owing to which LNG trading companies submit higher rates as they also add lofty premium in the bids. However it is the chance for private sector companies to import LNG as they are exempted from the PPRA rules.
Normally, PLL brings 5-6 cargoes on PGPCL terminal depending upon the requirement for the country but in the month November, it will bring three LNG cargoes and one cargo by PSO from Qatar under the new GtG 10-year LNG agreement at the 10.2 percent of the Brent that will also be re-gasified at PGPL terminal. The LNG cargo by PSO at PGPCL will be delivered on November 7-8.
Among the three cargoes that the PLL is to bring will include one spot cargo that is to be delivered by TOTAL on November 14-15 and two term cargoes, one by Gunvor to be delivered on November 19-20 and another one by ENI on November 25-26. The sources in Energy Ministry also confirmed the move, saying if any private party wants to import LNG cargo in the month of November and wants to bring on the dates which match with the dates of four LNG cargoes that are already scheduled, then PLL will adjust the private company and reschedule delivery dates of its four cargoes.
In the past, PLL Invited private sector twice for import of LNG but it later withdrew the offer because of non-availability of the unutilised capacity. The sources said that the real issue in allowing the private sector to import LNG and re-gasify is the storage capacity in FSRU. They said that FSRU has storage capacity of one cargo when it comes to allowing the private companies to use PLL’s underutilised capacity.