Fearing extreme volatility in the international market during the upcoming years, Pakistan LNG Limited (PLL) has sought exemption from PPRA rules for procurement of approximately 36 LNG spot cargoes for the period from January to December 2023, well-informed sources told Business Recorder.
PLL is mandated by the government to import LNG to meet the natural gas requirements of the country. Accordingly, PLL is managing LNG imports through long-term procurement contracts as well as spot procurement contracts. Due to the extreme volatility in spot LNG market, PLL is facing challenges to procure LNG from the spot market given applicability of PPRA rules especially rules 13(1) and 35 of PPRA rules.
Pakistan LNG Ltd. (PLL), in its letter of August 5, 2022 has taken cognizance of the fact that the Federal Government has accorded exemption to PLL from the applicability of Rules 13 and 35 of Public Procurement Rules Pakistan for procurement of spot LNG cargoes till December, 2022, and PPRA is in the process of notifying amendments in Procurement Rules to cater for the procurement of LNG from the spot market, in line with the international industry norms.
However, considering unprecedented global LNG dynamics resulting in extreme volatility expected to continue during the upcoming years, PLL has requested PPRA to grant exemption under section 21 of PPRA Ordinance 2002, from applicability of rules 13(1) and 35 of Public Procurement Rules, for procurement of spot cargoes during the period of January 2023 to December 2023 (approx. 36 spot cargoes). PPRA management argues that notification of the proposed Rule 21 (A) will cater for the procurement of LNG from the spot market as highlighted by PLL.
Through its letter of May 25, 2022, PPRA has already granted partial exemptions to PLL from applicability of rules 13 and 35 of PPRA Rules for procurement of spot LNG cargoes till December 31, 2022. “We understand that PPRA is in the process of notifying amendments in PPRA rules to cater for procurement of LNG from the sport market, in line with the international industry norms. We appreciate PPRA’s efforts in this regard and look forward to earliest notification of the amendments,” said, Managing Director, PPL, Masood Nabi, in a letter to Managing Director PPRA.