AVN 67.75 Decreased By ▼ -0.73 (-1.07%)
BAFL 30.82 Decreased By ▼ -0.18 (-0.58%)
BOP 4.84 Decreased By ▼ -0.07 (-1.43%)
CNERGY 3.75 No Change ▼ 0.00 (0%)
DFML 14.05 Decreased By ▼ -0.18 (-1.26%)
DGKC 41.04 Decreased By ▼ -0.60 (-1.44%)
EPCL 47.21 Increased By ▲ 1.84 (4.06%)
FCCL 11.58 Decreased By ▼ -0.13 (-1.11%)
FFL 5.11 Increased By ▲ 0.01 (0.2%)
FLYNG 5.95 Increased By ▲ 0.10 (1.71%)
GGL 11.17 Increased By ▲ 0.76 (7.3%)
HUBC 67.68 Decreased By ▼ -0.82 (-1.2%)
HUMNL 5.71 Decreased By ▼ -0.04 (-0.7%)
KAPCO 28.03 Decreased By ▼ -0.19 (-0.67%)
KEL 2.28 Increased By ▲ 0.02 (0.88%)
LOTCHEM 26.25 Increased By ▲ 1.15 (4.58%)
MLCF 21.58 No Change ▼ 0.00 (0%)
NETSOL 86.53 Decreased By ▼ -1.82 (-2.06%)
OGDC 99.78 Increased By ▲ 0.48 (0.48%)
PAEL 11.08 Decreased By ▼ -0.03 (-0.27%)
PIBTL 4.23 No Change ▼ 0.00 (0%)
PPL 80.05 Decreased By ▼ -2.40 (-2.91%)
PRL 13.26 Decreased By ▼ -0.08 (-0.6%)
SILK 0.90 No Change ▼ 0.00 (0%)
SNGP 43.75 Decreased By ▼ -0.63 (-1.42%)
TELE 6.08 Decreased By ▼ -0.10 (-1.62%)
TPLP 15.88 Increased By ▲ 0.07 (0.44%)
TRG 121.33 Increased By ▲ 1.58 (1.32%)
UNITY 14.04 Decreased By ▼ -0.06 (-0.43%)
WTL 1.31 Increased By ▲ 0.05 (3.97%)
BR100 4,181 Increased By 9.7 (0.23%)
BR30 15,270 Increased By 16.5 (0.11%)
KSE100 41,723 Increased By 200.6 (0.48%)
KSE30 15,746 Increased By 83 (0.53%)
Follow us

After the record high LNG import cost of $760 million in May 2022 – June 2022 was not too far with 12 cargoes costing no less than $726 million. For context, the 12-month leading average to May 2022 was $300 million. That is how bad it is out there in the energy market in general, and LNG in particular. And nothing suggests the Bull Run is coming to an end anytime soon, as Europe gasps for more gas, in the wake of Ukraine-Russia war.

It is only summers, mind you. The US natural gas prices may have tanked temporarily, but the LNG market remains tight, and traders continue to pay cancellation penalties in order to find more attractive buyers in the West.

The LNG cost for June 2022 averages around $21/mmbtu for SNGPL and $23/mmbtu for SSGC consumers, excluding standard rates of GST, at distribution stage. It was $10/mmbtu a year ago, and the import bill half for 12 cargoes. Eight of the 12 cargoes have been secured the long-term contract arrangements with Qatar, of which six are priced at a slope of 13.3 percent of Brent, and two at 10.2 percent.

Brent averaged $110/bbl for the reference period for June 2022 slope calculation – which is based on average Brent prices of three preceding months. Needless to say, this was the highest Brent average since Pakistan started to import LNG from Qatar under the long-term agreement with Slope at 13.37 percent. The Delivered-Ex-Shipp (DES) import cost at $13.89/mmbtu is easily the highest, beating $13.15/mmbtu for May 2022.

The spot cargoes were priced at an average DES rate of $22/mmbtu – costing $316 in import bill for four cargoes. The consumer price at distribution stage shot up to $27/mmbtu and $30/mmbtu for SNGPL and SSGC consumers, respectively, excluding GST. On a weighted average basis, the maximum distribution stage price stood at $22.6/mmbtu without GST. The average price stayed lower month-on-month, largely because of one cargo arranged by the PLL on 10.12 percent of Brent – bringing the overall cost slightly in control.

Come July, the import bill for RLNG may be substantially reduced. But only because Pakistan seems to be struggling to get hold of any LNG cargoes from the spot market. Two consecutive tenders were scrapped as no bidder qualified for July delivery. There is still time to arrange a cargo or two – but it seems unlikely that four cargoes could be fetched from spot market for July.

Pakistan has resorted to increased power load shedding as it struggles to arrange fuel. Given the dollar reserve position, not importing LNG at hefty rates may well be a more suited outcome in the larger scheme, even if it means subjecting masses and industries to prolonged hours of electricity load shedding.Bring LNG or not – either way – things do not look rosy.

Comments

Comments are closed.

Gasping for LNG

Rupee up 1.08%, settles at 273.33 against US dollar

OGRA calls for action against hoarders of petrol, diesel in Punjab

Fed's Waller sees no sign of 'quick' decline in inflation

KSE-100 increases 0.48% owing to hopes of breakthrough in talks with IMF

ECP should announce election schedule for KP, Punjab: President Alvi

Holding polls in Punjab can be difficult as operation against militants underway, IG tells ECP

Amir Dogar among 12 PTI workers arrested in Multan

Turkish bourse shut for 5 days after quake, Wed trades cancelled

More survivors found as Turkiye-Syria quake toll tops 11,200

Google to soon add generative AI features in search results