In a recent Tender opened by the Government for Delivery of LNG in January-2021, bidders have quoted record high prices taking advantage of Pakistan’s Last moment efforts to procure LNG.
The issue of late procurement was previously highlighted by Business Tribune PK in its story titled “Late Buying decision to cost Pakistan LNG procurement 40% expensive” last week, where Tenders for December-2020 LNG procurement fetched 40% costly bids.
This is the second time Pakistan authorities are attempting to fill the gap arising out of no bids for LNG vessels between Jan 8-18, with the government exercising emergency clauses of the procurement rules to allow Pakistan LNG Limited (PLL) a second bid.
According to a media report, two bidders submitted bids for first January 8-9 window. This included the lowest bid of $15.28 per million British thermal unit (mmBtu) from DXT Commodities and $19.8 per mmBtu from Trafigura. The lowest bid of $15.28 per mmBtu works out at about 35 per cent of Brent. The Market Rate back in July-2020 for December Delivery was around 12% of the Brent Crude Oil Price. Hence, the Government is receiving around 200% expensive LNG bids just due to late buying decision of the Petroleum Ministry.
The window of Jan 17-18 attracted two bids of $12.95 per mmBtu from ENOC and $15.95 per mmBtu from Trafigura. In this case, the lowest bid of $12.95 per mmBtu works out at about 30pc of Brent price.
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