Pakistan is likely to import four more Liquefied Natural Gas (LNG) cargoes from Qatar on the basis of Freight on Board (FoB) as finalisation of long-term Supply Purchase Agreement (SPA) with Qatar may take a few more months, sources close to Secretary Petroleum, Arshad Mirza told Business Recorder. The loading dates of LNG cargoes at Ras Laffan Port, Qatar are as follows: (i) first loading was scheduled for April 19, 2015; (ii) second loading - May 6, 2015; (iii) third loading - May 24, 2015; and (iv) fourth loading - June 11, 2015.
The Independent Power Producers (IPPs) are expected to be given priority in allocation of new LNG vessels as per the ECC decision. However, IPPs are still unsure of fair treatment until they get LNG. Giving details, sources said, pursuant to the ECC and Cabinet approvals of fast-track LNG services project on February 28, 2014 and April 18, 2014, respectively, Sui Southern Gas Company Limited (SSGCL) and Engro Elengy Terminal (PVT) Limited (EETPL) executed an LNG Services Agreement (LSA) on April 30, 2014 for provision of LNG receiving, storage and re-gasification services under a tolling fee arrangement. EETPL has also executed an Implementation Agreement (IA) with Port Qasim Authority on June 23, 2014 to develop and operate LNG terminal at Port Qasim.
For import of LNG, the ECC on July 2, 2013 authorised the Ministry of Petroleum and Natural Resources to engage in negotiations with Qatargas on government-to-government basis for importing LNG up to 500 mmcfd on Delivered Ex-Ship (DES) basis. PSO has been nominated by GoP to negotiate import of LNG whereas government of Qatar nominated Qatargas to enter into detailed discussions and Qatar Liquefied Gas Company Limited to supply LNG. Ministry of Petroleum and Natural Resources also constituted a team comprising PSO, SNGPL and SSGCL to negotiate the technical and operational aspects of the draft agreement. An LNG consultant company engaged by USAID namely M/s Fact Global Energy provided consultancy for LNG procurement.
To negotiate the LNG price and other important aspects with Qatargas, ECC on August 15, 2014 approved constitution of a LNG Price Negotiation Committee (PNC). Negotiations with Qatargas are in progress. Meanwhile, the LNG terminal has been commissioned through import of LNG on board FSRU.
The ECC, in its meeting on April 9, 2015 also approved the following proposal submitted by the Ministry of Petroleum and Natural Resources "to keep an option of commissioning of LNG terminal through PSO, PSO may be allowed to import one commissioning cargo through FRSU on FOB basis or LNG carrier on DES basis under LNG SPA."
PSO, in its letter written on April 14, 2015 stated that the long-term SPA between PSO and Qatargas is at the final stage of negotiation and is expected to be finalised soon. After finalisation, it will go through approval process and therefore, it is anticipated that the first DES deliveries under SPA will not commence for a couple of months. PSO have updated that Qatargas consented to supply LNG over the next two months on FoB basis.
According to PSO, there are some pending actions on the part of PQA to arrange for the post acceptance from Qatargas and other ship owners/LNG suppliers. Keeping in view the delay in agreement with Qatargas, PSO has proposed to lift next four cargoes through EETPL's FSRU namely "Exquisite". EETPL has indicated its concurrence of such an arrangement on the basis that it continues to receive (i) its daily capacity charge at the rate of $272,000 under the LNG operation services agreement with SSGC; (ii) the cost of fuel utilised for the return voyage; and (iii) applicable port charges to both the load port and the receiving port.
Comments
Comments are closed.