Average LNG price touches record high

PLL books cargoes at average of $24 per unit on a spot basis

ISLAMABAD:

Pakistan LNG Limited (PLL) has procured liquefied natural gas (LNG) cargoes at a record high average price of over $24 per unit on a spot basis.

The Oil and Gas Regulatory Authority (Ogra) has worked out average re-gasified LNG price at $15.6791 per million British thermal units (mmbtu) for consumers of Sui Northern Gas Pipelines Limited (SNGPL) and $15.4259 per mmbtu for consumers of Sui Southern Gas Company (SSGC) for the current month.

PLL has made spot purchases at an average price of $24.0925 per mmbtu, which is an all-time high, whereas Pakistan State Oil (PSO) under a long-term agreement has made purchases at an average rate of $9.676 per mmbtu.

PSO has received eight LNG cargoes whereas PLL has floated an emergency tender and bought two cargoes for November delivery slots.

The weighted average sale price has been worked out in light of the advice of the Ministry of Energy.

PLL has awarded an LNG contract at a record high price of $30.6 per mmbtu for the window of November 26-27. This came after two suppliers Gunvor and Eni defaulted on commitments to the supply of LNG cargoes.

Had PLL rejected the offer, there would have been a gas crisis this winter. However, its acceptance of the bid has come in for a lot of criticism.

PLL is drawing flak for the lack of proper strategies to arrange LNG cargoes when gas prices were lower in the international market.

For November, one cargo was purchased at $17.5350 per mmbtu and another at $30.6500 per unit on a spot basis. For October, the RLNG price for SNGPL consumers was fixed at $15.7828 per mmbtu while for SSGC consumers the price was set at $15.5280 per unit. The average spot price stood at $15.5880 for six LNG cargoes.

Published in The Express Tribune, November 11^th, 2021.

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