PSO makes the costliest purchase of LNG cargo
PSO making a new record. The state-run Pakistan State Oil (PSO) has purchased a cargo of liquefied natural gas (LNG) at $20.055 per unit (almost 27.9pc of Brent). This is the highest ever not only in the country but perhaps the second highest summer purchase in the world.
This comes at a time when the government was justifying $15.5 per million British thermal units (MMBTU) purchases by Pakistan. The LNG Limited (PLL), another state-run entity, is the lesser evil when compared with alternative fuels.
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As a result of the expensive LNG cargoes acquired through the spot market by the two entities. The weighted average sale price for LNG (excluding GST) was informed. It is notified by Oil and Gas Regulatory Authority (Ogra) at $13.61 per MMBTU for August — up 5.5pc over July prices that were already 25pc expensive when compared to June.
Interestingly, PLL and PSO involved in LNG imports are keeping the bid results secret to avoid public criticism. As a result, only the final weighted average sale price for a month computed by Ogra is made public. However, the expensive spot bids are generally camouflaged because of cheaper long-term supply contracts from Qatar. Interestingly, Ogra is not authorized to question the prudent cost of imports and is compelled to only compute the weighted average LNG price of 10-12 vessels per month.
PSO makes the costliest purchase of LNG cargo
Last week, the government conceded in a public statement that the PLL board was forced to accept four LNG “spot” tenders at about $15 per MMBTU for September 2021. As the lesser evil, otherwise, the replacement fuel (furnace oil), which is even more expensive. It would have resulted in September power prices higher by at least 20pc.
