Cargo arranged to launch operations at 2nd LNG terminal

This terminal will start running on Nov 24 after receiving the shipment

ISLAMABAD: Pakistan LNG Terminals Limited (PLTL) has finally arranged first cargo for the second liquefied natural gas (LNG) terminal, which will be inaugurated on November 20 by Prime Minister Shahid Khaqan Abbasi.

Earlier, the Fatima Group agreed to bring the first commissioning cargo for starting work at the second LNG terminal, but due to a dispute with Sui Southern Gas Company (SSGC) over payment of tolling fee, it pulled out.

Now, a senior government official said PLTL had found a way to deliver first LNG cargo to the second terminal.



Following the dispute between Fatima Fertilizer and SSGC, Pakistan State Oil (PSO) was asked to divert an LNG cargo from the first terminal to the second facility.

However, the official said, Qatargas demanded a higher price for diverting the cargo. Afterwards, commodity trader Gunvor was asked to take first cargo to the second LNG terminal.

Gunvor has already secured a short-term LNG supply contract. Under this deal, it was to supply first LNG cargo on November 28, but it was asked to bring it four days earlier on November 24.

“The second LNG terminal will be commissioned on November 24; in the first month, it will receive six LNG cargoes,” the official said.

Italian energy giant Eni and Gunvor will bring one cargo each in a month whereas four cargoes have been arranged through spot purchases.

Pakistan is currently importing 600 million cubic feet of LNG per day (mmcfd) through the only LNG terminal at Port Qasim. The second terminal will handle another 600 mmcfd, taking the total import volume to 1.2 billion cubic feet per day.

“These cargoes have been arranged through tenders and spot purchases by following prescribed rules,” the official said, adding Gunvor was already supplying LNG and had supply contracts with PSO.

According to officials, Eni has secured a long-term LNG supply contract and the gas will be delivered to LNG-based power plants in Punjab to tackle electricity outages. Some cargoes have been arranged through spot purchases.



The Italian company won the contract after offering some price discount. It came up with the offer in response to the two tenders floated by Pakistan LNG Company.

One tender was for the short term of five years and the other was for the long term covering 15 years. Around 15 companies participated in the short-term tender whereas five companies offered bids for long-term supplies.

Two companies Gunvor and Eni were declared successful for quoting the lowest prices.

Gunvor quoted 11.62% of crude oil price for short-term LNG deliveries whereas Eni quoted 12.29% of crude oil price for long-term supplies.

Published in The Express Tribune, November 18^th, 2017.

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