The management of the Pakistan State Oil (PSO) seems to have ignored the directions of the Petroleum Minister, Shahid Khaqan Abbasi to place the Liquefied Natural Gas (LNG) deal signed with Qatar on 10 February on its website. The LNG deal has also not been uploaded on the website of Public Procurement Regulatory Authority (PPRA) minus confidential clauses, which is a legal requirement according to experts.
Federal Minister for Petroleum and Natural Resources, Shahid Khaqan Abbasi, talking to Business Recorder here on Friday said that placing the deal on the website was the responsibility of PSO and PPRA. He added that he has advised PSO management to place the non-confidential part of the deal on the website for greater transparency.
The deal envisages import of 2.25 million tons of LNG in 2016 and 3.75 million tons per annum in 2017. PSO will make payments to Qatargas every fortnight through a Standby Letter of Credit (SLBC) at 105 percent of the value of four LNG cargoes. After completing LNG terminal at Port Qasim Karachi, Pakistan has so far imported 45 LNG ships - each carrying 3.2 Billion Cubic Feet (BCF) of the commodity. PSO management has requested the Petroleum Ministry to arrange advance payments from LNG consumers which include Punjab CNG outlets, fertiliser plants and power sector.
At present Delivered Ex-Ship (DES) LNG price is $4.85 per Million British Thermal Unit (MMBTU), other import related cost is $0.0088 per MMBTU and LNG terminal charges are fixed at $0.66 per MMBTU. LNG cost also includes retainage cost of 0.75%, transportation losses at 0.5 percent of DES price, and PSO margin $0.88 per MMBTU. Including all costs gives a total LNG cost of $6.64 per MMBTU.
The Minister said that government is engaged in talks with Emirates National Oil Company (ENOC), Malaysian Petronas and Italian Eni for import of LNG. The government is negotiating with Italian oil/gas giant Eni to import of 0.75 million tons of LNG per annum and Malaysian LNG producer and supplier Petronas has assured Pakistan of supply of 1.5 million tons of LNG per annum once the company completes an Australian field.
"We are also in talks with Dubai's oil firm Adnoc to start importing LNG from Oman," Abbasi said and added that efforts are being made to rid the domestic gas consumers of low gas pressure and gas load-shedding in upcoming winter season. Pakistan is currently receiving LNG supplies from two sources, Qatar and Switzerland-based Gunvor. At present, Pakistan is receiving three ships every month from Qatargas, averaging 300 Million Cubic Feet per Day (Mmcfd), and one ship from Gunvor, averaging 100 Mmcfd. Both sources are providing LNG at 13.37 percent of Brent oil.
When an official of the PSO was asked about the non-availability of the deal on an official website, he said that very soon all the details of the contract would be uploaded on the sites; however he was not clear about the date they would upload the agreement.
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