Monday, May 29, 2023

Ogra remove the notification after the PSO denies the purchase of the “most expensive” LNG cargo

The Oil and Gas Regulatory Authority (Ogra) remove a notification from a day earlier that showed the purchase price of a liquefied natural gas (LNG) cargo by Pakistan State Oil (PSO) at $20.055, saying the petroleum corporation clarified it had scrapped the bid because it was ‘high’ and ‘unacceptable.’

According to Ogra, the state-run PSO acquired a cargo of LNG at $20.055 per unit (nearly 27.9% of Brent) – the highest ever not just in the nation, but maybe the second-costliest summer buy in the world — and that the bid results were kept hidden to minimize public criticism.

PSO released a comment on Twitter hours after the news was published, rejecting the allocation of any cargo at the cost of $20.055. It stated that the abovementioned offer was canceled on July 27 due to its exorbitant price and that a new tender was launched as a result.

It also disputed keeping the bid results secret, saying it “always maintains total openness in all of its business transactions and activities.”

“All bid results are published on PSO’s website under Public Procurement Regulatory Authority (PPRA) standards,” according to the response.

The PSO stated that it “has negotiated into a new long term supply contract with Qatar Petroleum (QP), with deliveries beginning in January 2022, and this would further decrease the basket price of LNG imported into the nation.”

“In light of the increased demand under the forthcoming winter season, PSO has exercised the option in the new QP contract to import four more cargoes in November and December at the new contractual pricing, which are projected to be much cheaper than the market price throughout the winter.”

Soon after, Ogra retracted the notification referenced in the report, stating that “as per regular monthly procedure, estimated RLNG prices are determined based on available data at the time of computation.”

It indicated that several pricing components were computed on a preliminary basis based on available data at the time, and were later actualized by Ogra based on actual expenses incurred.

According to the authority, the PSO told it that it had scrapped the cargo for 27.8 percent of the Brent, and that “the RLNG price declared on August 2 is no longer valid, and the August RLNG price notice is being withdrawn.”

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