Daily Times

The Petroleum Division (PD) on Friday clarified some facts of media reports about Liquefied Natural Gas (LNG) cargoes’ recent procurement, describing it in line with global average for the importing countries.’

“Roughly one-third of our monthly LNG purchases are on ‘spot’ basis (and the remaining two-thirds on long-term contract basis) which is basically in line with global average for the LNG importing countries,” the PD said in a news release.

It maintained that the spot LNG commodity price had spiked recently to over $15 per MMBTU [Million British Thermal Unit] due to a variety of supply-related issues such as curtailment from Exxon’s facility in Papua New Guinea and demand-related factors (higher in China and Japan due to warmer weather). Therefore, the Pakistan LNG Limited Board was forced to accept four LNG spot tenders at $15 per MMBTU price for September 2021; otherwise, the reliance on replacement fuel like furnace oil, which was even more expensive, would have resulted in September power prices, higher by at least 20 per cent.

“Moreover, if, due to RLNG shortage, we are forced to burn diesel to fulfill summer power demand, the resultant incremental electricity generation cost in September would be almost 50pc more expensive.