PLL scraps LNG spot purchase bid of $39.8/mmbtu

ISLAMABAD - Pakistan LNG Limited (PLL) has scrapped the LNG spot purchase bid of $39.8/mmbtu it received for the month of July as it will increase the generation cost of the RLNG based power plants by almost 20 per cent.
“We are not awarding the contract to Qatar Energy, which had quoted $39.80/mmbtu for delivery in July 30-31 window as it was too expensive,” official source told The Nation.
The new bid is almost $39.800/mmbtu which will push the cost of RLNG based power plants to Rs 35/unit in July, which is expensive than furnace oil, coal and even HSD. Pakistan LNG Ltd (PLL) had received poor response from suppliers and against tenders of four liquefied natural gas (LNG) cargoes in July. The state owned company has got only single bid at $39.80/mmbtu. PLL has procured two LNG cargoes for the month of May at $29.6700/mmbtu and $24.1500/mmbtu. However, the cost of the RLNG based power was almost Rs28/unit, which was higher than coal based power generation and only Rs2/unit less than HSD during the month.
On the other hand in May the per unit generation cost of coal, HSD and furnace oil based electricity was Rs 18, Rs 30 and Rs 33.67/unit respectively. Therefore the government is considering coal, HSD and furnace oil better option than LNG during July. The prices of crude oil have reduced in the international market by almost 7pc, which means that the prices of furnace oil and HSD will go down in July as compared to May. The reduction in the prices of furnace oil and HSD will further decrease the generation cost from these sources vis-à-vis RLNG based power generation, the source argued.
Meanwhile, another source said that starting from July Pakistan will receive one additional LNG cargo from its new long term contract with Qatar. Giving the detail, the source said that currently Pakistan has two long term contracts for LNG supply with Qatar and procuring seven cargoes from both government to government agreements every month. Under first long term deal the country receives five cargoes per month while under the second long term contract it is getting two cargoes per month. Under the second long term contract, Pakistan will start getting three cargoes from July, the source said. The source further said that the hydle generation will also increase by around 4000MW during July, which will be helpful and plugging the demand supply gap.

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