Wednesday, May 31, 2023

PSO to buy the most expensive LNG cargo

Pakistan State Oil (PSO) secured a spot cargo for delivery on September 26 and 27, 2021 for the equivalent of $17.85/mmbtu. The shipment will be supplied by Vitol.

According to the PSO, Vitol proposed to deliver LNG at a cost of 24.5456 percent of Brent, or $17.85 per mmbtu.

The last record-high LNG shipment from Pakistan was for late-August delivery for $15.93/mmbtu.

Furthermore, PSO chose not to award a separate tender for delivery cargo on September 24 and 25, 2021, which ended on August 30. Vitol made the lowest offer, at 27.5366 percent linked to Brent crude oil, or $20/mmbtu.

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To promote openness, the government has directed PSO and Pakistan LNG Ltd (PLL) to make auction results public in a timely way.

“Both companies are urged to post the outcomes of the purchase decisions on their respective websites within 24 hours,” Energy Minister Hammad Azhar instructed the two state-owned enterprises participating in the LNG procurement.

In separate letters, the minister also requested that the chairmen of the boards of directors of the two companies discuss and make a decision on the purchase of spot RLNG (regasified liquefied natural gas) cargoes “to increase transparency and further improve processes.”

“These orders are designed to provide competent monitoring by the respective BoDs on such critical concerns, as well as prompt publication of procurement information, which is necessary for maintaining market efficiency, as well as public disclosure,” stated the minister.

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