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ISLAMABAD: 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.

According to M/s Pakistan LNG Limited (PLL) the projected price of spot LNG for March and April 2024 will be $ 9.43/MMBTU, May 24- $ 8.81/MMBTU, June-$ 8.39/MMBTU, July- $ 7.56/MMBTU, August -$ 7.37/MMBTU and September- $ 8.35/MMBTU.

These forecasts were provided by S&P Global on January 24, 2024 and may vary depending on market conditions.

Jan-Jun 2024: PPRA allows PLL to buy 12 LNG spot cargoes

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.

The NTDC has requested Petroleum Division to communicate confirmed RLNG quota for power sector to it at the earliest so that RFO requirements could be worked out for the period March-September 2024.

However, NPCC can only provide tentative figures of RLNG requirement for power sector for required period due to variation in demand, hydrology, weather conditions and Merit order.

According to SNGPL, with respect to power sector’s RLNG demand for the year 2024, it may well vary considerably vis-i-vis demand and consumption patterns of last year. Historically, there has been a huge difference in demand and consumption of power sector. M/s SNGPL pointed out that in case additional cargoes are arranged and power fails to offtake RLNG per its demand, it leaves SNGPL in a situation where it has to reduce supplies from indigenous gas sources in order to consume the RLNG left unutilized by power. Not only does it create technical issues for field operators but it also increases RLNG diversion to domestic sector which is a national loss.

M/s SNGPL further stated that in the absence of any firm demand from power sector for which RLNG is mainly imported, SNGPL would not be able to provide firm demand to LNG importer, ie, PLL, as demanded by them.

The SNGPL further stated that it is imperative that power confirms firm demand without caveats and undertakes to indemnify SNGPL for any loss arising from its inability to consume RLNG per demand confirmed by it.

Power Division has requested to arrange/provide firm month-wise offtake commitment from NTDC/NPCC for the period March-December 2024 at the earliest, so that firm demand may be given by SNGPL to PLL and supplies can be arranged accordingly.

Meanwhile, SNGPL has also communicated that their outstanding dues against power sector including WAPDA, IPP’s and GPPs have piled up to an alarming level of Rs. 181 billion.

The SNGPL also noted that the above state of affairs is detrimental to their sustainability and is hampering overall financial structure of the company. SNGPL added that due to huge amount outstanding with Power Sector, they are facing severe financial crises and are unable to fulfill its commitments towards upstream gas suppliers.

In order to keep the gas/RLNG supply chain intact and to avert any liquidity crunch to fuel suppliers, it is requested to clear the above referred outstanding amount on priority to avoid international default by PSO and PLL against RLNG supplies and also provide clear timelines for it.

Copyright Business Recorder, 2024

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