Gas deficit looms large as PLL fails to procure eight LNG cargoes for Dec-Jan

[AZ1]

This has nothing to do with prices, this incompetent rubber stamp in not able to even secure the gas for next months. Price is a secondary issue here.

yeah price is not issue nawaz sharif will sign checks from Uk and patwaris will have their salaries and Pakistan will able to pay its bill.

 

[muhammadhafeezmalik]

No we really we need atleast 6 new terminal. At least 2 new terminal with in haste to atleast have a backup in case of any problem with others. Right now first two terminals are pumping it at full capacity non stop bcz we have non storage capacity. All gas that comes on port is being pumped directly into system after regasification. Pakistan will need at least 6 new terminals by 2030 at minimum.
i was actually talking about highly compressed storage terminals earlier to have a storage capacity for 1 month. It is what we should aim for long term due to ever increasing demand. 15 billion will be minimum investment to build inland storage facilities. Having this storage capacity will help us against market volatility as well.
We cant compare Indian terminal price tag to Pakistan bcz our terminals are built by fireign companies. There is no local company which can undertake this task successfully. I am not sure about exact price tag for first two terminal but i think it was probably 1.5-2 billion for first 2.

Hi,

Quite interesting figures. Do you have more information regarding it?

For price comparison, India is constructing its Dharma Lng Terminal (50-50% stakes b/w Adani & Total - to be commissioned in July 2022) for about $750million, that is a 12mtpa regasification capacity with two 180,000 cubic meters storage tanks, with a jetty capable of handling QMax cargoes. Our combined Lng storage capacity is around 320,000 cubic meters (13,750 mmcf or 9.5days at 1440 mmcfd regasification capacity)

Influx of $15B seems too huge, and unrealistic for our needs.

By allowing Tabeer and Energas to construct more FSRU based Lng terminals, Pti has done huge blunder. They should have incentivized them, giving them a 10 year tax holiday, and getting them to build Onshore import terminals instead with two 180,000 cu meters storage tanks each, effectively mitigating our strategic Lng storage requirements.



Hi,

Unfortunately, we won't be able to afford it. China has recently signed two 2 year contracts, paying premium upto $2/mmbtu over JKM & TTF. Precedence has been set, and it heavily favors the suppliers, we simply can't compete. Our spot buying will go down once our new Qatar contract fully comes into play (in 2024). Pti has envisaged our firm demand to increase from 800 to 1000mmcfd by then and has secured volumes accordingly. Till then it will be spot buying or alternate fuels.

In my opinion we don't need 6 new FSRU terminal at the moment, even 2 are more than our need, PTI missed an opportunity in previous month when Engro wanted to retain a bigger Floating Storage and Regasification Unit (FSRU), Sequoia, we would have enhanced our regasification capacity by 300 mmcfd without spending a penny which would be enough for next two years' requirements, but some ministers wanted to insert in FSRUs anyway (we can understand why!) and this would have jeopardise their plan.

yeah price is not issue nawaz sharif will sign checks from Uk and patwaris will have their salaries and Pakistan will able to pay its bill.

We can manage the price by billing more to our customers but what we can not afford is shutting down of our industry. This has nothing to do with NS.

 

[farok84]

No we really we need atleast 6 new terminal. At least 2 new terminal with in haste to atleast have a backup in case of any problem with others. Right now first two terminals are pumping it at full capacity non stop bcz we have non storage capacity. All gas that comes on port is being pumped directly into system after regasification. Pakistan will need at least 6 new terminals by 2030 at minimum.

Hi,

I am quite skeptic whether we will have customers for all those 6 terminals. Building more FSRU terminals is injustice to Pakistan and criminal negligence of PTI. PTI should not have given go ahead for more FSRUs specially after wasting 3 years. For them to get operational, it will take at least 18-24 months, that is, if (Tabeer & Energas) are able to secure an FSRU within that timeframe. Almost all new FSRUs being built till 2023 have been spoken for, both Tabeer and Energas will likely lease old carriers converted to FSRU, similar to Engro's Exquisite.

Those existing terminals 1 & 2 have 'take or pay' contracts for making available 600mmcfd each (nameplate regas capacity of Engro's is 690mmcfd and Gasport is 750mmcfd). They charge us $ 272,000 per day for that and are not running at their full operational but at contracted capacity, that too not all the time, specially Gasport. If these terminals cannot guarantee 600mmcfd output, they should not have signed 'take or pay' agreements. If Pakistan is paying them top dollars, these terminals must ensure operational readiness. Don't get carried away by these terminals propaganda.

The storage in FSRU offers no strategic purpose. They are more for operational requirements of FSRU itself, adding hundred more of those will not change our storage woes. Tabish Gohar was rightly in talks with Vopak for Aboveground Storage tanks (Lng), but those were not fruitful. So he proposed constructing them with GIDC funds. This is still at proposal stage. Now if we are going to build storage facility (tanks, cryogenic utilities), which costs the most ($200 mil for a 180,000 cubic meters storage tank) with our own money, why on earth can't we build an onshore regas terminal with it. We are going to spend $150mil on jetty, loading arms, pumps, facility pipping, so why can't we import vaporizers, compressors and boiler from OEM, get couple of their representatives to guide through construction and commissioning phases, for another $50-100 mil depending on 5-10mtpa capacity? The underlying reason for this quick fix, is desire to show for some sort of energy projects completion before elections, or atleast this is what IK's team is selling to him. I can assure you they won't be able to get those terminals up and running before the elections. PMLN did their ample share of blunders, when allowing Gasport to construct second leased FSRU based terminal, while we are paying a guaranteed $272,000/day, they should have gotten them to build an onshore terminal, that was our best chance of getting an actual infra asset. Instead of paying $130-150k/day to BW, they could have paid GOP $50k/day for land lease or any Pakistan bank for financing land acquisition. PMLN desire was also to showcase these as political win during elections, employing band-aid solutions, PTI is now doing the same. Although there are no take or pay government guarantees involved with these two terminals, PTI could have gotten Pakistan a much better, Pakistan Owned and Operated energy infrastructure, which would have been a great asset.

We cant compare Indian terminal price tag to Pakistan bcz our terminals are built by fireign companies. There is no local company which can undertake this task successfully. I am not sure about exact price tag for first two terminal but i think it was probably 1.5-2 billion for first 2.

All Indian terminals are built by foreign companies too. The one I mentioned (Dharma) have 50% stakes with Total. Both Tabeer (Mitsubishi) and Energas (Exxon) have foreign investors. Engro's investment was less than $140 million (~$138million), Gasport was around $160 million. Tabeer and Energas are committing $180million each.

PTI missed an opportunity in previous month when Engro wanted to retain a bigger Floating Storage and Regasification Unit (FSRU), Sequoia, we would have enhanced our regasification capacity by 300 mmcfd without spending a penny which would be enough for next two years' requirements

Hi,

Did they not ask for guaranteed fees for extra capacity? They were demanding the same 'take or pay' contract for those extra 300mmcfd ($136k/day). GOP can't justify that when they have been offered terminals by two parties with no sovereign guarantees (at GOP end). Also Gasport terminal is usually underutilized, adding another take or pay 300mmcfd ($136,000/day) to already guaranteed and underutilized 1200mmcfd ($544,000/day) makes no sense.

SSGC refuses to allow Engro to utilise excess capacity | The Express Tribune

Company board not willing to take risk of NAB investigation

tribune.com.pk

"Furthermore, Engro had also called for including “take or pay” clause, which would bound SSGC to pay capacity charges in case the utility was unable to utilise the allocated capacity."

 

[AZ1]

In my opinion we don't need 6 new FSRU terminal at the moment, even 2 are more than our need, PTI missed an opportunity in previous month when Engro wanted to retain a bigger Floating Storage and Regasification Unit (FSRU), Sequoia, we would have enhanced our regasification capacity by 300 mmcfd without spending a penny which would be enough for next two years' requirements, but some ministers wanted to insert in FSRUs anyway (we can understand why!) and this would have jeopardise their plan.


We can manage the price by billing more to our customers but what we can not afford is shutting down of our industry. This has nothing to do with NS.

Yeah and blame imran khan that inflation is high bills are high. Just like electricity capacity contracts made by nawaz

 

[muhammadhafeezmalik]

Hi,

I am quite skeptic whether we will have customers for all those 6 terminals. Building more FSRU terminals is injustice to Pakistan and criminal negligence of PTI. PTI should not have given go ahead for more FSRUs specially after wasting 3 years. For them to get operational, it will take at least 18-24 months, that is, if (Tabeer & Energas) are able to secure an FSRU within that timeframe. Almost all new FSRUs being built till 2023 have been spoken for, both Tabeer and Energas will likely lease old carriers converted to FSRU, similar to Engro's Exquisite.

Those existing terminals 1 & 2 have 'take or pay' contracts for making available 600mmcfd each (nameplate regas capacity of Engro's is 690mmcfd and Gasport is 750mmcfd). They charge us $ 272,000 per day for that and are not running at their full operational but at contracted capacity, that too not all the time, specially Gasport. If these terminals cannot guarantee 600mmcfd output, they should not have signed 'take or pay' agreements. If Pakistan is paying them top dollars, these terminals must ensure operational readiness. Don't get carried away by these terminals propaganda.

The storage in FSRU offers no strategic purpose. They are more for operational requirements of FSRU itself, adding hundred more of those will not change our storage woes. Tabish Gohar was rightly in talks with Vopak for Aboveground Storage tanks (Lng), but those were not fruitful. So he proposed constructing them with GIDC funds. This is still at proposal stage. Now if we are going to build storage facility (tanks, cryogenic utilities), which costs the most ($200 mil for a 180,000 cubic meters storage tank) with our own money, why on earth can't we build an onshore regas terminal with it. We are going to spend $150mil on jetty, loading arms, pumps, facility pipping, so why can't we import vaporizers, compressors and boiler from OEM, get couple of their representatives to guide through construction and commissioning phases, for another $50-100 mil depending on 5-10mtpa capacity? The underlying reason for this quick fix, is desire to show for some sort of energy projects completion before elections, or atleast this is what IK's team is selling to him. I can assure you they won't be able to get those terminals up and running before the elections. PMLN did their ample share of blunders, when allowing Gasport to construct second leased FSRU based terminal, while we are paying a guaranteed $272,000/day, they should have gotten them to build an onshore terminal, that was our best chance of getting an actual infra asset. Instead of paying $130-150k/day to BW, they could have paid GOP $50k/day for land lease or any Pakistan bank for financing land acquisition. PMLN desire was also to showcase these as political win during elections, employing band-aid solutions, PTI is now doing the same. Although there are no take or pay government guarantees involved with these two terminals, PTI could have gotten Pakistan a much better, Pakistan Owned and Operated energy infrastructure, which would have been a great asset.



All Indian terminals are built by foreign companies too. The one I mentioned (Dharma) have 50% stakes with Total. Both Tabeer (Mitsubishi) and Energas (Exxon) have foreign investors. Engro's investment was less than $140 million (~$138million), Gasport was around $160 million. Tabeer and Energas are committing $180million each.



Hi,

Did they not ask for guaranteed fees for extra capacity? They were demanding the same 'take or pay' contract for those extra 300mmcfd ($136k/day). GOP can't justify that when they have been offered terminals by two parties with no sovereign guarantees (at GOP end). Also Gasport terminal is usually underutilized, adding another take or pay 300mmcfd ($136,000/day) to already guaranteed and underutilized 1200mmcfd ($544,000/day) makes no sense.

SSGC refuses to allow Engro to utilise excess capacity | The Express Tribune

Company board not willing to take risk of NAB investigation

tribune.com.pk

"Furthermore, Engro had also called for including “take or pay” clause, which would bound SSGC to pay capacity charges in case the utility was unable to utilise the allocated capacity."

No, It was not the case listen to Mr. Ghayas Khan CEO Engro from 12 min onward. They want to sale LNG to private sector not to government, so why would government pay for additional capacity??

 

[ziaulislam]

The unprecedented gas deficit in the forthcoming winter season has become inevitable as Pakistan LNG Limited (PLL) has failed to attract the LNG trading companies in response to its tender floated on September 11, 2021 seeking eight LNG cargoes, four each for December and January.

This means the country will not be able to import 1.2 bcfd LNG each in December and January --- peak demand season in winter, instead it will be able to import just 900mmcfd in each month with a deficit of 300 mmcfd. In November, the government will import 1bcfd against 1.2 bcfd capacity.

In the wake of no response from LNG trading companies, in December and January, PLL’s 600 mmcfd capacity at PGPCL terminal will remain underutilized by 300 mmcfd each month. “This would be a double jeopardy for the government creating a mammoth political backlash from the masses sick of high inflation for a very long time,'' a senior official at the Energy Ministry privy to the development told The News.

“The production of local gas has fallen to 2.8 bcfd and the country can import 1.2 bcfd LNG which will not be fully exploited in the coming winter. In the winters the demand goes up to 5 bfcd whereas the country will only have 3.7 bcfd in December and January for failure in purchasing eight LNG cargoes.’

There would be a sizeable gas crisis even if the government manages the 8 LNG cargoes during the peak demand in December and January, but under new scenario without contracting the required tender, the gas crisis intensity would increase to a level where for the government would not be able to provide gas to power and export sector. The domestic sector may also face the maximum load shedding apart from zero gas supply of non-export, commercial and CNG sector.

“This means that in December and January, the country’s economic and industrial activities will virtually come to standstill,” the official said. The Pakistan LNG Limited (PLL) confirmed the development saying that in response to its PPRA compliant tenders floated on September 11, 2021 seeking 8 LNG cargoes, four each for December, 2021 and January 2022, it has not received any bids.

The LNG companies may not have submitted their bids on account of PPRA compliant tender, as under its rules the PPL is bound to hold the bids for 15 days discouraging the companies to come up with bids at a time when LNG spot prices have crossed $35 per MMBTU. Against the backdrop, the PLL got an exemption from PPRA on September 21, 2021 for spot purchasing which did not prove fruitful as it had already issued tenders on September 11, 2021.

The official at the Energy Ministry said that in November, PSO will have 6 term cargoes and PLL will have four including one cargo from Qatar at 10.2 percent of the Brent. However, in December and January the country will have 9 LNG cargoes (6 by PS0 and 3 by PLL) in each month against the demand of 13 cargoes per month. So there will be an unprecedented gas crisis in December and January. He said Bangladesh purchased LNG under spot purchasing at over $30 per MMBTU some days back which has now further increased over $35 per MMBTU.

The official said that the prices of LNG in the spot market have increased mainly because of the massive demand by EU countries as Russia has massively squeezed the gas supply to whole Europe after Germany raised the issues of sanctioned companies involved in building the Nord Stream 2 undersea gas pipeline. The LNG demand has also been driven as China is abandoning power generation based on coal as fuel.

Gas deficit looms large in Pakistan

ISLAMABAD: The unprecedented gas deficit in the forthcoming winter season has become inevitable as Pakistan LNG Limited has failed to attract the LNG trading companies in response to its tender...

www.thenews.com.pk

IK has caused the biggest world wide LNG shortage due to his incompetence..oil shortages are now a norm worldwide due to his incompetence

Whats worse is that his refusal to give additional block liscences in 2012-2108 when oil investments were up has caused our production to go down as well..

Incompetent IK

Yeah and blame imran khan that inflation is high bills are high. Just like electricity capacity contracts made by nawaz

Ik is causing gas prices to soar in europe by 700%

Height of incompetence by IK

 

[Pandora]

In my opinion we don't need 6 new FSRU terminal at the moment, even 2 are more than our need, PTI missed an opportunity in previous month when Engro wanted to retain a bigger Floating Storage and Regasification Unit (FSRU), Sequoia, we would have enhanced our regasification capacity by 300 mmcfd without spending a penny which would be enough for next two years' requirements, but some ministers wanted to insert in FSRUs anyway (we can understand why!) and this would have jeopardise their plan.


We can manage the price by billing more to our customers but what we can not afford is shutting down of our industry. This has nothing to do with NS.

Our consumption will increase significantly over next 10 year. We need to match that demand hence the requirement for additional terminals. Higher consumption is mainly bcz of increased industrial usage as well as domestic.

 

[Path-Finder]

https://twitter.com/x/status/1447582794612449283

https://twitter.com/x/status/1447582797972090882

https://twitter.com/x/status/1447582800962523136

@farok84 what is the benefit of this?

 

[farok84]

https://twitter.com/x/status/1447582794612449283

https://twitter.com/x/status/1447582797972090882

https://twitter.com/x/status/1447582800962523136

@farok84 what is the benefit of this?

Hi,

I really don't like the idea of more FSRU based import terminals. We should have asked them to build Onshore terminals instead. I tried to explain it here.

Building more FSRU terminals is injustice to Pakistan and criminal negligence of PTI. PTI should not have given go ahead for more FSRUs specially after wasting 3 years. For them to get operational, it will take at least 18-24 months, that is, if (Tabeer & Energas) are able to secure an FSRU within that timeframe. Almost all new FSRUs being built till 2023 have been spoken for, both Tabeer and Energas will likely lease old carriers converted to FSRU, similar to Engro's Exquisite.

Those existing terminals 1 & 2 have 'take or pay' contracts for making available 600mmcfd each (nameplate regas capacity of Engro's is 690mmcfd and Gasport is 750mmcfd). They charge us $ 272,000 per day for that and are not running at their full operational but at contracted capacity, that too not all the time, specially Gasport. If these terminals cannot guarantee 600mmcfd output, they should not have signed 'take or pay' agreements. If Pakistan is paying them top dollars, these terminals must ensure operational readiness. Don't get carried away by these terminals propaganda.

The storage in FSRU offers no strategic purpose. They are more for operational requirements of FSRU itself, adding hundred more of those will not change our storage woes. Tabish Gohar was rightly in talks with Vopak for Aboveground Storage tanks (Lng), but those were not fruitful. So he proposed constructing them with GIDC funds. This is still at proposal stage. Now if we are going to build storage facility (tanks, cryogenic utilities), which costs the most ($200 mil for a 180,000 cubic meters storage tank) with our own money, why on earth can't we build an onshore regas terminal with it. We are going to spend $150mil on jetty, loading arms, pumps, facility pipping, so why can't we import vaporizers, compressors and boiler from OEM, get couple of their representatives to guide through construction and commissioning phases, for another $50-100 mil depending on 5-10mtpa capacity? The underlying reason for this quick fix, is desire to show for some sort of energy projects completion before elections, or atleast this is what IK's team is selling to him. I can assure you they won't be able to get those terminals up and running before the elections. PMLN did their ample share of blunders, when allowing Gasport to construct second leased FSRU based terminal, while we are paying a guaranteed $272,000/day, they should have gotten them to build an onshore terminal, that was our best chance of getting an actual infra asset. Instead of paying $130-150k/day to BW, they could have paid GOP $50k/day for land lease or any Pakistan bank for financing land acquisition. PMLN desire was also to showcase these as political win during elections, employing band-aid solutions, PTI is now doing the same. Although there are no take or pay government guarantees involved with these two terminals, PTI could have gotten Pakistan a much better, Pakistan Owned and Operated energy infrastructure, which would have been a great asset.

It's not like, these terminals won't help Pakistan. But we could have achieved much more. Leased FSRUs are not the solution Pakistan should be seeking. Those figures for storage are hogwash as storage in FSRUs are for operational requirements. These can't be characterized as strategic.

 

[farok84]

No, It was not the case listen to Mr. Ghayas Khan CEO Engro from 12 min onward. They want to sale LNG to private sector not to government, so why would government pay for additional capacity??

Hi,

The video is from July 2nd. He himself says that 'Commercial Negotiation' hasn't started till that point. The article I shared is from Sept 4th, quoting SSGC officials from a meeting held on Sept 3rd.

 

[muhammadhafeezmalik]

IK has caused the biggest world wide LNG shortage due to his incompetence..oil shortages are now a norm worldwide due to his incompetence

Whats worse is that his refusal to give additional block liscences in 2012-2108 when oil investments were up has caused our production to go down as well..

Incompetent IK

Ik is causing gas prices to soar in europe by 700%
View attachment 784558
Height of incompetence by IK

It is only PTI propaganda that PMLN had not given any licenses for oil & gas exploration in its five year term, the fact is PMLN had given 50 licenses in 2014 alone.
If rain could happen due to imandari of Imran Khan why shortages are not caused by be-imani of same PM??

https://www.facebook.com/video.php?v=437434280408651

Hi,

The video is from July 2nd. He himself says that 'Commercial Negotiation' hasn't started till that point. The article I shared is from Sept 4th, quoting SSGC officials from a meeting held on Sept 3rd.

SSGC is a public sector organization who has manoply, if only SSGC would buy the gas Engro would demand capacity, but if Ministry of Petroleum allows consumers to buy the commodity other than SSGC, Engro will not demand capacity.

 

[farok84]

SSGC is a public sector organization who has manoply, if only SSGC would buy the gas Engro would demand capacity, but if Ministry of Petroleum allows consumers to buy the commodity other than SSGC, Engro will not demand capacity.

Hi,

Ministry of Petroleum has allowed Tabeer and Energas to do so. Why settle for 300mmcfd when they can get 1200mmcfd? Also, if Engro is going to make money from extra capacity, what benefits are there for end consumer? Did Engro offer to lower it's guaranteed capacity charges for contracted 600mmcfd, in case they are allowed sales to other clients than SSGC?

According to SSGC, they demanded same capacity payments at 'take or pay' guarantee, there is nothing in the media nor any rebuttal by Engro suggesting otherwise. I wonder why? Has Engro denied asking for guaranteed capacity charges after SSGC made the statement? Kindly share, if they have. These private entities stand to make profit for themselves, consumer welfare is not their business moto.

Between, do you work for a private Rlng based genco, if you are comfortable to answer? I remember you were advocating for CPPA when Nepra didn't accept their demands for extra payments, now you are trying hard for Engro - both of whom don't represent consumers nor have consumers welfare at heart of their business model.

It is only PTI propaganda that PMLN had not given any licenses for oil & gas exploration in its five year term, the fact is PMLN had given 50 licenses in 2014 alone.

How many did they issue in 2015, 2016, 2017 and 2018?

 

[muhammadhafeezmalik]

Hi,

Ministry of Petroleum has allowed Tabeer and Energas to do so. Why settle for 300mmcfd when they can get 1200mmcfd? Also, if Engro is going to make money from extra capacity, what benefits are there for end consumer? Did Engro offer to lower it's guaranteed capacity charges for contracted 600mmcfd, in case they are allowed sales to other clients than SSGC?

According to SSGC, they demanded same capacity payments at 'take or pay' guarantee, there is nothing in the media nor any rebuttal by Engro suggesting otherwise. I wonder why? Has Engro denied asking for guaranteed capacity charges after SSGC made the statement? Kindly share, if they have. These private entities stand to make profit for themselves, consumer welfare is not their business moto.

Between, do you work for a private Rlng based genco, if you are comfortable to answer? I remember you were advocating for CPPA when Nepra didn't accept their demands for extra payments, now you are trying hard for Engro - both of whom don't represent consumers nor have consumers welfare at heart of their business model.



How many did they issue in 2015, 2016, 2017 and 2018?

Yes, that is my point. When MoP is offering new entrants a wider market why not it offer the same for older players for their additional capacity??

 

[farok84]

Yes, that is my point. When MoP is offering new entrants a wider market why not it offer the same for older players for their additional capacity??

Because, it doesn't help GoP's consumers. If older players want to make exuberant profits with additional capacity without injecting additional investments in the economy, they should have proposed to lower their existing capacity charges, making it more attractive to end consumer. Then, there are trivial issues of discouragment of new players and fresh investments and encouragement for continued market monopoly by older players, both detrimental to GoP and her consumers, and must be against one or two PPRA rules. Did Engro not ask SSGC to amend LSA and waive off its first right to buy out FSRU after end of contract (15years, that is in 2030)?

 

[fisher1]

What else is new?

Imran Khan came to power to torture Muslims.

Everyday since this manhoos khabis Niazi came to power, only horrifying news comes on TV.

Gas, electricity, groceries, electronics, everything is either in shortage because haramkhor Imran Khan ate it all or it is expensive and unaffordable.

so yeah nothing new.