Business

LNG price raised to offset company losses

Regulator increases price despite fall in international market

Zafar Bhutta July 19, 2023

After several meetings with LNG players in the global market, it is clear that the current shortfall in LNG will continue until 2026. photo: file

ISLAMABAD:

The Oil and Gas Regulatory Authority (Ogra) has notified a 1.5% hike in the price of liquefied natural gas (LNG) for the consumers of Sui Southern Gas Company (SSGC) in an attempt to offset the losses suffered by the company.

The price increase, effective from July 1, is contrary to the decline in gas prices in the international market.

In June, the LNG price for the transmission network was $11.8001 per million British thermal units (mmBtu) and for the distribution network it was $12.7181 per mmBtu.

The price came down to $11.6908 per mmBtu for transmission and $12.6493 per mmBtu for distribution in July 2023, registering a reduction of 0.93% and 0.54% respectively.

In the case of SSGC, the price of LNG stood at $11.3736 per mmBtu for transmission and $12.9429 per mmBtu for distribution network in June 2023.

For July, the LNG price went down to $11.2784 on the transmission network but it was raised to $13.1367 on the distribution network.

The transmission price dropped 0.84% following the weakening of the global market. However, the distribution price rose 1.5%, driven by the impact of losses and theft across the SSGC network.

“The reduction in LNG price is due to the decrease in Brent prices in the international market. However, in the case of re-gasified LNG for the distribution network of SSGC, the unaccounted-for-gas loss impact of the relevant network has resulted in a net increase in the RLNG price,” Ogra said in a statement.

“In accordance with the policy guidelines of the federal government, Ogra has determined RLNG prices for Sui companies with effect from July 1, 2023.” During July, PSO, which purchases LNG from Qatar under a long-term contract, imported nine cargoes whereas PLL brought only one consignment. As PLL fails to buy adequate fuel, the consumers have been paying millions of dollars in capacity charges to an LNG terminal operator.

Published in The Express Tribune, July 19^th, 2023.

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