Bids for six LNG cargoes for December at higher prices put authorities in limbo

ISLAMABAD: The Pakistan LNG Limited (PLL) here on Monday opened bids for spot purchasing of LNG for the month of December 2020.

The lowest bid for each LNG cargo appeared at a very higher side putting the authorities in limbo, wondering how they should advance. The spot procurement of six LNG cargoes is must for the month of December to cope with the massive gas shortages that the country will brave. The lowest bids for six LNG cargoes range from 16.98 percent of the Brent to 15.87 percent. The lowest bids are far higher in terms of price than the price of LNG from Qatar, which was sealed at 13.37 percent of Brent by the PML-N government.

According to the bids, SOCAR submitted the lowest bid at 16.84 percent of the Brent for LNG cargo to be delivered on December 3-4, Trafigura came up with the lowest bid at 16.987 percent of the Brent for cargo to arrive at 8-9 December. And Vitol submitted four lowest bids, the first cargo to arrive on December 13-14 at 16.972 percent of Brent, second for December 18-19 at 16.5513 percent, third for December 24-25 at 15.97 percent of the Brent and for the fourth LNG cargo to land on December 30-31, it submitted the lowest price at 15.876 percent of Brent.Almost six companies that include Gunvor, Trafigura, SOCAR, Vitol, DXT Commodities and ENI participated in bidding for provision of six LNG cargoes, but three companies SOCAR, Trafigura and Vitol emerged on the scene with the lowest bids which are factually at higher side.

Dr Miftah Ismail, former finance minister and PML-N leader said that the PML-N government bought LNG at 13.37 percent of the Brent from Qatar gas company for 15 years, at 11.62 percent of Brent from Gunver and at 11.99 percent of the Brent rom ENI.

Now the sitting government is buying much more expensive cargoes. And the tragedy is when the prices were at historic lows during the first wave of COVID-19 the government could’ve bought cargoes for $2.5 per mmbtu but they didn’t. At that time LNG was available at five to six year contract, but this government did not make any deal which shows how incompetent this government is.