ISLAMABAD: The Ministry of Energy (Petroleum Division) has revised price forecast for spot LNG with Sui gas companies and Power Division till September 2024.
According to M/s Pakistan LNG Limited (PLL) the projected JKM forecast price of spot LNG for April 2024 will be $8.49/ MMBTU instead of $ 8.52, for May $8.22/ MMBTU as compared to previous projection of $8.38/ MMBTU ($ 0.17) , June $7.89/ MMBTU against previous forecast of $8.20/ MMBTU ($0.31), for July $7.41.
The Ministry of Energy (Petroleum Division) has shared price forecast for spot LNG with Sui gas companies, National Transmission and Despatch Company (NTDC) and Central Power Purchasing Agency-Guaranteed (CPPA-G) till September 2024.
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The NTDC has apprised that it has already provided tentative RLNG demand of power sector for the period March-December 2024, adding that National Power Control Centre (NPCC) can only provide tentative figures of RLNG requirement for power sector due to variation in demand, hydrology, weather conditions and merit order.
Recently, Directorate General Gas (Petroleum Division) conveyed serious concerns on less RLNG off-take by power sector (March 2024).
Directorate General Gas has cited a reference of letter dated March 8, 2024 regarding less RLNG off-take and a copy of SNGPL’s self-explicit letter of March 14, 2024 where in the company once against expressed serious concerns over reduced consumption of RLNG by power sector against the firm demand indicated by the Power Division.
SNGPL, in its letter highlighted that power sector continued to consume around 350 MMCFD of RLNG, significantly lower than their communicated demand of 480 MMCFD. SNGPL indicated that if this trend continues then their system would cross the projected critical threshold of 5000 MMCF on March 16, 2026 which would lead to high system pressure, jeopardizing the integrity of system and resulting in delays in offloading cargoes/ demurrages.
Power Division has been requested to take appropriate remedial measures in respect of off-taking the allocated RLNG per indicated demand of sustainability of RLNG supply chain and to avoid operational issues and financial hit to the country.
Recently, Pakistan State Oil (PSO) claimed that LNG (Liquefied Natural Gas) business is bleeding its financial resources as without this business, the company’s equity up to last year would have been higher by approximately Rs. 45 billion.
It was noted that the LNG business is a loss-making business as not only the related trade debts get stuck with SNGPL but the company has to pay higher tax on this business as it is under the Final Tax Regime under the Income Tax Law.
Copyright Business Recorder, 2024