PSO’s new LNG contract allegedly burdens RLNG shoppers with $31mn: sources

Sources say CNG worth will probably be elevated by Rs8 per liter within the nation because of the PSO’s new deal. Picture: file   
  • PSO has reportedly canceled an LNG time period cargo from Qatar and purchased a spot cargo as a replacement at a better charge. 
  • The deal will end in burden of $31 million on RLNG shoppers.
  • CNG worth will probably be elevated by Rs8 per litre within the nation because of the new contract, say sources.   

ISLAMABAD: The Pakistan State Oil (PSO) has reportedly canceled an LNG time period cargo from Qatar for September and purchased a spot cargo as a replacement at a better charge with an influence of $31 million on RLNG shoppers, The Information reported, citing sources.

In accordance with OGRA sources, PSO, which imports 5 time period cargoes each month from Qatar below a 15-year settlement at worth of 13.37 p.c of the Brent, cancelled one LNG time period cargo on the worth of $9.6994 per MMBTU and bought as a replacement an costly spot cargo at $17.54 per MMBTU with an influence of $7.84 per MMBTU, leading to burden of $31 million on RLNG shoppers.

The sources mentioned that the deal will end in a rise in CNG worth by Rs8 per liter.

Nevertheless, the PSO’s managing director has outright denied the cancellation, arguing below its annual supply plan (ADP) in September, six cargoes have been deliberate, 4 from Qatar and two from spot. All 4 cargoes from Qatar are coming and the PSO has merely cancelled the spot cargo of 16 September.

The PSO maximized its winter purchases throughout ADP. The Jan-Feb and Nov Dec cargoes have been elevated to 6 every as a substitute of 5, totaling 28 cargoes in winters towards 20. The corporate ensured most financial savings by efficient ahead planning and contract administration after contracting 24 consignments from the outdated contract and 4 from new QP contract at the price of 10.2 p.c of Brent.

Factually, below the brand new LNG settlement, Qatar will present fuel at 10.2 p.c of the Brent from January 1, 2022. Beneath particular provisions, Pakistan has already booked 4 LNG cargoes (two every for November and December) this calendar yr which can assist lower the basket worth of RLNG.

Earlier in February 26, 2021, Pakistan had signed a brand new 10-year LNG deal at 10.20 p.c of Brent with the worth opening clause after 4 years. This new GtoG (government-to-government) mode deal will assist save $317 million a yr and $3 billion in a decade compared with the PML-N’s deal at 13.37 p.c of Brent for 15 years with worth opening provision after 10 years. Moreover, below one other provision, if Pakistan requires extra cargoes within the winter season within the present calendar yr, it may well import at worth of 10.20 p.c of Brent.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button