ISLAMABAD: After failing first time, Pakistan LNG Limited (PLL) has floated a tender for the second time to allocate unutilised capacity of the LNG Terminal to the private sector.

Earlier, the PLL had floated a tender to allocate capacity to the private sector to import LNG.

However, the company consumed two contract cargoes in November that were scheduled for the months of December and January. The PLL has long-term contracts with Gunvor and ENI for one cargo each in every month.

The private sector has not able as yet to import a single LNG cargo, due to hurdles to maintain monopoly of the gas companies.

SAPM Nadeem Babar has also pointed this out at various occasions. The chairman Cabinet Committee on Energy Committee (CCoE) had also announced to create competitive market for the gas sector by ensuing entry of private sector to import LNG at competitive rates.

During the hearing recently regarding licenses of sale and marketing of LNG, the Ogra had also expressed concerns over the PLL. It was interesting to note that the PLL officials had been resisting the move saying that gas companies would lose the market, which had annoyed the Ogra.

These hurdles had also forced the consumers to pay multi-million dollar capacity payments to the LNG terminal operator for not using the full capacity. The PLL has again invited private investors to buy unutilised capacity for six months (February-July 2021). Bids have been invited from the private investors seeking allocation of its unutilised capacity on a short-term basis.

The LNG import to be equivalent to the required regasification services for any specific month or for the entire period.

The deadline for submission of applications is January 18, 2021.

The PLL has offered confirmed idle capacity for three months (February, March, and April), whereas, the idle capacity for the next three months (May, June, and July) will be tentative when demand of power are at its peak.

Unutilised capacity of 235 mmcfd is available for February, 136 mmcfd for March, and 130 mmcfd is available in April.

Tentative idle capacity of 50 mmcfd each is available in May and June, and 100 mmcfd is available for July.

The PLL utilizes its contracted capacity depending upon the requirement of the RLNG by the gas utility companies.

In order to optimally utilise its contracted capacity, the federal government has authorised the PLL to allocate its unutilised contracted capacity to private parties on a short-term basis, depending upon the requirement of the gas utility companies.

The unutilised contracted capacity shall be made available to all the interested parties, which fulfilling the eligibility criteria at the Ogra determined charges for the relevant month.

In case the local requirement of the qualified parties exceeds the total available unutilised contracted capacity, individual capacity allocations will be adjusted proportionately.

The available regasification capacities may vary (both on a daily and a monthly average basis) based on the available berthing slots and requirement of the PLL’s own customers, while considering the finalised schedule of all berthing slots.

Any RLNG not delivered during the said period may be carried forward in accordance with the provisions of the agreement.

The draft agreement for allocation of the LNG Terminal Services (Regasification Services) is subject to approval from the Ogra.

The Ogra had already held public hearings on the petitions filed by the private investors for grant of licenses for import and marketing of the LNG.

Copyright Business Recorder, 2021