Delay in LNG spot cargoes tenders costs Pakistan Rs10.6bn

[FOOLS_NIGHTMARE]

Audit report of Petroleum Division and Oil and Gas Regulatory Authority (Ogra) for the 2020-21 reveals high prices of LNG and gas shortages recently witnessed is a result of poor planning for procurement of spot LNG cargoes

Delay in floating tenders for import of the LNG spot cargoes and awarded contracts at higher rates by Pakistan LNG Ltd (PLL) resulted in losses of Rs10.6 billion in the financial year 2020-21.

High prices of the LNG and gas shortages recently witnessed by the country is a result of poor planning for procurement of spot LNG cargoes by the PLL.

This has been revealed in the audit report of the Petroleum Division and the Oil and Gas Regulatory Authority (Ogra) for the audit year 2020-21.

During the audit of the PLL for the financial years 2018-20, it was observed that the management floated tenders of six cargoes for delivery during January 8, 2021 to February 1, 2021 against a demand raised by the Sui Northern Gas Pipeline Limited (SNGPL) vide letter dated October 26, 2020.

The tenders were opened on December 10, 2020 in which no supplier bid was received for the three slots between January 20, 2021 to February 1, 2021.

Lowest bids were received from Qatar Gas with potentially very viable prices.

The management again issued tenders for unfilled spots by invoking emergency clause of PP Rules but bids of record high prices were received.

The PLL had also imported its one-term cargo of January 2021 in September 2020.

Thus, despite timely receiving of demand from the SNGPL and advanced import of one term cargo of January, the management failed to issue tenders well in time due to which delivery window was reduced.

The country ended up paying high price of the LNG and unfilled slots would also aggravate the gas shortage.

That resulted in loss of Rs1.3 billion.

In another case, the management opened tenders of spot cargo in November 2020 for the month of December 2020 and awarded contracts at $6.78 per mmbtu.

The LNG prices were $4.38 per mmbtu in June for the December supply but the LNG spot cargoes were not purchased to get the benefit of lower prices.

That resulted in loss of Rs7.7 billion.

The report also highlighted that the PLL opened tenders for the import of LNG spot cargoes in July and August 2020 for delivery in the month of August 2020 and made the contracts at $2.23 and $2.29 per mmbtu.

The management also opened tenders in August (for delivery in August) and September 2020 (for delivery in September) and awarded contracts at $3.63 and $4.65 per mmbtu respectively.

Due to mismanagement and unnecessary delay in tendering, the contracts were awarded at higher rates.

This resulted in loss of Rs1.6 billion to the national exchequer. The audit report observed that poor planning and tenders for the import of LNG were issued with delay at higher rates.

The management also failed to keep in view the historical consumption trend in winter season as well as price trend in the international market.

Delay in LNG spot cargoes tenders costs Pakistan Rs10.6bn

* Audit report of Petroleum Division and Oil and Gas Regulatory Authority (Ogra) for the 2020-21 reveals high prices of LNG and gas shortages recently witnessed is a result of poor planning for procurement of spot LNG cargoes

www.brecorder.com

 

[FOOLS_NIGHTMARE]

Will anyone be put to task for the losses to the national exchequer or will it be another eye washer!

 

[Norwegian]

Will anyone be put to task for the losses to the national exchequer or will it be another eye washer!

Yes, LHC sent your favorite leader to London

 

[ejaz007]

Untimely LNG contracts: Auditor General finds wastage of billions

KARACHI: The federal government has inflicted a loss of billions of rupees to the nation in the LNG sector ever since it came to power in 2018 but continues to deny that. In the first two and a half years, it gathered losses to the tune of Rs122 billion, and so far in 2021 has inflicted a financial damage of Rs35 billion by repeating the past trend of mistakes. This was the crux of an analysis by Shahzeb Khanzada in Wednesday’s show of Geo News programme ‘Aaj Shahzeb Khanzada Kay Sath’ (ASKKS).

When the issue of needless wastage of resources was raised last year by the Geo News, the federal government, instead of addressing the issue, came down hard against the Jang-Geo Group. However, the Auditor General Pakistan, in his latest report, has confirmed the facts presented by the ASKKS related to delay in purchasing LNG, loss of billions of rupees, all of which led to a gas crisis of epic proportions and justifies the stance of the Geo News.

The AGP, in his 2020 audit report, found it disturbing that LNG for December 2020 was contracted at a rate of USD6.7 MMBTU very late in November, which in futures was earlier available at USD4.38 MMBTU. The report laid the blame for the problem to ignoring the historic trend of winter gas consumption in the country as well as international market trends. The LNG prices were increasing sharply from July to Oct 2020.

The crisis reflected on poor planning by the inept wizards at the relevant ministries for contracting LNG at spot rates, ignoring the futures all of which boiled down to the loss of Rs7.7 bn. Shahzeb reminded that back in December 2020, the ASKKS had highlighted the issue.

Similarly, the AGP also discussed the losses of Rs1.65 billion incurred in tenders for spot purchases in August and September 2020. The audit found that the tenders for August were floated in the same month and the sale was contracted at USD3.6 MMBTU while for September the delivery was contracted at USD4.65 MMBTU. Had the supplies been contracted in July, the losses would have been averted, the audit report concluded. At that time, when the Geo News had asked ex-SAPM Nadeem Babar, he held the K-Electric responsible. The news channel also produced the factual position that the Karachi power utility company had ‘timely raised’ its requirements, which is now being confirmed by the AGP report.

The report also cites the losses of Rs1.31 billion when the demand was timely raised but the tenders were floated with delay due to which the suppliers refused to oblige and emergency tenders were floated and then historic high bids were received. All of this precipitated in a massive power and gas crisis as the electricity production was generated through expensive furnace oil due to bad planning, the AGP report reveals.

In 2020 winter, the wizards announced that Pakistan confronts peak demand for six weeks only. The AGP has found that the government paid over Rs11 billion from its kitty for not adequately using the LNG terminals. Had the terminals been used to full capacity through private sector, the additional expenses in billions of rupees could have been averted, the AGP report says.

Last year, it was said gas was not required and now it is being said that the problem arose due to NAB cases. When asked, NAB rejected the government's version, saying they never stopped the government from fully utilising the LNG terminal to its full capacity. However, this year as of now, the federal government has decided to utilise the LNG terminal to its full capacity.

The prime minister must investigate and hold those responsible for the needless LNG crisis created in the last three years. He must also find out as to why the last year mistakes are being repeated once again now; once again his government would face the music.

Untimely LNG contracts: Auditor General finds wastage of billions

KARACHI: The federal government has inflicted a loss of billions of rupees to the nation in the LNG sector ever since it came to power in 2018 but continues to deny that. In the first two and a half...

www.thenews.com.pk

 

[Riz]

Audit report of Petroleum Division and Oil and Gas Regulatory Authority (Ogra) for the 2020-21 reveals high prices of LNG and gas shortages recently witnessed is a result of poor planning for procurement of spot LNG cargoes
View attachment 769011

Delay in floating tenders for import of the LNG spot cargoes and awarded contracts at higher rates by Pakistan LNG Ltd (PLL) resulted in losses of Rs10.6 billion in the financial year 2020-21.

High prices of the LNG and gas shortages recently witnessed by the country is a result of poor planning for procurement of spot LNG cargoes by the PLL.

This has been revealed in the audit report of the Petroleum Division and the Oil and Gas Regulatory Authority (Ogra) for the audit year 2020-21.

During the audit of the PLL for the financial years 2018-20, it was observed that the management floated tenders of six cargoes for delivery during January 8, 2021 to February 1, 2021 against a demand raised by the Sui Northern Gas Pipeline Limited (SNGPL) vide letter dated October 26, 2020.

The tenders were opened on December 10, 2020 in which no supplier bid was received for the three slots between January 20, 2021 to February 1, 2021.

Lowest bids were received from Qatar Gas with potentially very viable prices.

The management again issued tenders for unfilled spots by invoking emergency clause of PP Rules but bids of record high prices were received.

The PLL had also imported its one-term cargo of January 2021 in September 2020.

Thus, despite timely receiving of demand from the SNGPL and advanced import of one term cargo of January, the management failed to issue tenders well in time due to which delivery window was reduced.

The country ended up paying high price of the LNG and unfilled slots would also aggravate the gas shortage.

That resulted in loss of Rs1.3 billion.

In another case, the management opened tenders of spot cargo in November 2020 for the month of December 2020 and awarded contracts at $6.78 per mmbtu.

The LNG prices were $4.38 per mmbtu in June for the December supply but the LNG spot cargoes were not purchased to get the benefit of lower prices.

That resulted in loss of Rs7.7 billion.

The report also highlighted that the PLL opened tenders for the import of LNG spot cargoes in July and August 2020 for delivery in the month of August 2020 and made the contracts at $2.23 and $2.29 per mmbtu.

The management also opened tenders in August (for delivery in August) and September 2020 (for delivery in September) and awarded contracts at $3.63 and $4.65 per mmbtu respectively.

Due to mismanagement and unnecessary delay in tendering, the contracts were awarded at higher rates.

This resulted in loss of Rs1.6 billion to the national exchequer. The audit report observed that poor planning and tenders for the import of LNG were issued with delay at higher rates.

The management also failed to keep in view the historical consumption trend in winter season as well as price trend in the international market.

Delay in LNG spot cargoes tenders costs Pakistan Rs10.6bn

* Audit report of Petroleum Division and Oil and Gas Regulatory Authority (Ogra) for the 2020-21 reveals high prices of LNG and gas shortages recently witnessed is a result of poor planning for procurement of spot LNG cargoes

www.brecorder.com

Another day another propaganda

 

[farok84]

Audit report of Petroleum Division and Oil and Gas Regulatory Authority (Ogra) for the 2020-21 reveals high prices of LNG and gas shortages recently witnessed is a result of poor planning for procurement of spot LNG cargoes
View attachment 769011

Delay in floating tenders for import of the LNG spot cargoes and awarded contracts at higher rates by Pakistan LNG Ltd (PLL) resulted in losses of Rs10.6 billion in the financial year 2020-21.

High prices of the LNG and gas shortages recently witnessed by the country is a result of poor planning for procurement of spot LNG cargoes by the PLL.

This has been revealed in the audit report of the Petroleum Division and the Oil and Gas Regulatory Authority (Ogra) for the audit year 2020-21.

During the audit of the PLL for the financial years 2018-20, it was observed that the management floated tenders of six cargoes for delivery during January 8, 2021 to February 1, 2021 against a demand raised by the Sui Northern Gas Pipeline Limited (SNGPL) vide letter dated October 26, 2020.

The tenders were opened on December 10, 2020 in which no supplier bid was received for the three slots between January 20, 2021 to February 1, 2021.

Lowest bids were received from Qatar Gas with potentially very viable prices.

The management again issued tenders for unfilled spots by invoking emergency clause of PP Rules but bids of record high prices were received.

The PLL had also imported its one-term cargo of January 2021 in September 2020.

Thus, despite timely receiving of demand from the SNGPL and advanced import of one term cargo of January, the management failed to issue tenders well in time due to which delivery window was reduced.

The country ended up paying high price of the LNG and unfilled slots would also aggravate the gas shortage.

That resulted in loss of Rs1.3 billion.

In another case, the management opened tenders of spot cargo in November 2020 for the month of December 2020 and awarded contracts at $6.78 per mmbtu.

The LNG prices were $4.38 per mmbtu in June for the December supply but the LNG spot cargoes were not purchased to get the benefit of lower prices.

That resulted in loss of Rs7.7 billion.

The report also highlighted that the PLL opened tenders for the import of LNG spot cargoes in July and August 2020 for delivery in the month of August 2020 and made the contracts at $2.23 and $2.29 per mmbtu.

The management also opened tenders in August (for delivery in August) and September 2020 (for delivery in September) and awarded contracts at $3.63 and $4.65 per mmbtu respectively.

Due to mismanagement and unnecessary delay in tendering, the contracts were awarded at higher rates.

This resulted in loss of Rs1.6 billion to the national exchequer. The audit report observed that poor planning and tenders for the import of LNG were issued with delay at higher rates.

The management also failed to keep in view the historical consumption trend in winter season as well as price trend in the international market.

Delay in LNG spot cargoes tenders costs Pakistan Rs10.6bn

* Audit report of Petroleum Division and Oil and Gas Regulatory Authority (Ogra) for the 2020-21 reveals high prices of LNG and gas shortages recently witnessed is a result of poor planning for procurement of spot LNG cargoes

www.brecorder.com

Hi,

I tried to find the original report but unfortunately it hasn't yet been uploaded on AGP website. Maybe @Patriot forever can help in locating it online.

The whole premise of the report appears to be, if the spot cargoes for December would have been secured in June, we would have bought them at the same rates as of June. That's not how futures spot commodity trades work. Any report or investigation on basis of this argument holds no merit. I wonder from where did they get this figure of $4.38/mmbtu for December supply? Which supplier offered such prices and who bought it? I hope and wish, for their sake, they are not basing their report on Trafigura letter. The original report should have reference for this.

The LNG prices were $4.38 per mmbtu in June for the December supply but the LNG spot cargoes were not purchased to get the benefit of lower prices.

The AGP, in his 2020 audit report, found it disturbing that LNG for December 2020 was contracted at a rate of USD6.7 MMBTU very late in November, which in futures was earlier available at USD4.38 MMBTU.

It also begs the question why no other buyers, like China, bought it at that price. It should be noted China bought a cargo for above $30/mmbtu in December.

The argument presented by AGP is comical and straight out of Geo Talk Shows. Officials at Petroleum Division, after having a good long hysterical laugh, will have no issues in defending or debunking them. Maybe that's the reason the report hasn't been uploaded on AGP website yet.

 

[Patriot forever]

Will anyone be put to task for the losses to the national exchequer or will it be another eye washer!

Sir with this kind of propaganda you are putting your reputation on the line, i see a couple (likes) of below average IQ members on this forum fall for such propaganda. This is the main reason why there is such a large gap in IQ of plmn supporters and other Pakistanis, average people cut through the bullshit and move on detesting the party which survives on propaganda, below IQ below join the ranks.

The above has been debunked long ago, but the recent one is equally horendous.

https://twitter.com/x/status/1423196963684638722

 

[Norwegian]

This was the crux of an analysis by Shahzeb Khanzada in Wednesday’s show of Geo News programme ‘Aaj Shahzeb Khanzada Kay Sath’ (ASKKS).

Lol. Is Khanzada judge of the matters?

The crisis reflected on poor planning by the inept wizards at the relevant ministries for contracting LNG at spot rates

Why spot rates is the problem for you Patwaris? Because you are not getting cuts from your masters in Qatar?

The argument presented by AGP is comical and straight out of Geo Talk Shows.

This is how Khota Biryani network works in Pakistan

Sir with this kind of propaganda you are putting your reputation on the line, i see a couple (likes) of below average IQ members on this forum fall for such propaganda. This is the main reason why there is such a large gap in IQ of plmn supporters and other Pakistanis, average people cut through the bullshit and move on detesting the party which survives on propaganda, below IQ below join the ranks.

All those liking him are known Patwaris. This illustrates their IQ level.