ISLAMABAD: Power Division is reportedly silent on Petroleum Division’s proposal to purchase three additional cargoes of LNG on spot whose price is around $ 13.4 MMBTU in the international market, well informed sources told Business Recorder.
On March 21, 2023, Petroleum Division wrote a letter to Power Division, stating that M/s Pakistan LNG Limited (PLL) has apprised them that during April 2023 to September 2023 terminal capacity for additional 2-3 LNG cargoes per month is available at Terminal-2, while spot LNG prices are currently at $13.4 MMBTU ($ 43 million per cargo).
Accordingly, PLL suggested that power sector be requested to analyze the possible savings with respect to power generation based on imported additional LNG through the replacement of any other fuel.
Hamstrung by forex constraints, govt may not be able to purchase 3 more LNG spot cargoes
Petroleum Division requested the Power Division to provide views/comments on PLL proposal in order to save cost of generation against any other imported fuel.
Last year, the government maintained that it could not purchase spot LNG because its price was over $40 MMBTU.
According to existing plan, PLL will ensure one cargo each from March to September 2023. However, total cargoes to be imported by both PSO and PLL will be nine in March, May, June and September whereas 10 cargoes will be imported for April, July and August 2023.
On April 19, 2023, Directorate General of Gas (Petroleum Division) sent an Office Memorandum (OM) to Power Division, along with the copy of PLL’s letter, saying the response to its letter is still awaited.
Directorate General of Gas has requested Power Division to expedite/ provide the requisite view/comments in the matter, at the earliest enabling Petroleum Division to proceed further in the matter.
National Electric Power Regulatory Authority (Nepra), in its determinations and through letters, has repeatedly urged Power Division and Petroleum Division to supply agreed quantity of RLNG to power plants so that cost of expensive fuel like RFO is not passed onto consumers.
National Power Control Centre (NPCC), an arm of National Transmission and Despatch Company (NTDC), which is also facing an investigation for its failure to take remedial measures to stop power breakdowns, has time and again complained during public hearings at Nepra that they are not being supplied required quantity of RLNG for the plants due to which they are operating expensive plants.
Copyright Business Recorder, 2023