Featured Pakistan Buys Cheapest LNG (Gas) 230% Cheaper than Qatri LNG

[Path-Finder]

I have no problem with the thread, i am talking about youtube link. As soon as i clicked, ad came up. Which makes me think it could be an attempt to promote private monetize youtube channels, as far as 230% cheaper figure is concerned its not present in the article.

I advise using ad blocker. The article is about LNG tendering that I added to show the LNG deal the gov did! The figure of 230% is in the video. here is a screen grab.

 

[farok84]

as far as 230% cheaper figure is concerned its not present in the article.

Hi,

It does. You will have to do a little math though.

Qatar Price : 13.37% of Brent

SOCAR Price: 5.74% of Brent

Which makes this offer, 2.329 times or 232.9% cheaper than Qatar's LNG.

Although, the comparison isn't fair, as one is long term contract and the other is one time buy. But the article does mention it.

SOCAR’s offer for the cargo is about 5.74% of Brent crude oil prices, according to the document.

This works out to about $2.20 per million British thermal units (mmBtu) for the cargo to be delivered over Aug. 27 to 28 and is a record low LNG price secured by the Pakistani company, Pakistan LNG said on its Twitter account.

 

[PakPrinciples]

selected can only buy cheap LNG!

Could turn that into a joke:

"Imran Khan is like GasBuddy, selected to get us better gas rates"

Its not like Qatari LNG comes with added goodness that is not found in other LNG!!

You get Qatari royal family action cards with every barrel purchased. Nawaz Sharif was always short the Tamim bin Hamad Al Thani deluxe foil card.

You enter the country into a contract that you cannot get out of! YOU MUST PURCHASE AT A SET PRICE!! WTF.

To be fair buying anything in bulk with contracts is probably the best way to secure a good deal (i.e. bulk discounts).

LNG prices are as low as they are now because of lockdowns and slowdowns occurring globally. This wasn't really something anyone predicted at least no one had any concrete dates.

However, we can scrutinize whether the deal at that time was a good one based on available information.

Personally I was, and still am, more supportive of directing investments into Pakistani shale resources and lignite not just for economic reasons but also national security and strategic interests. If necessary I'd rather Pakistani's pay a slight premium for locally produced shale gas than import oil/gas from abroad.

as far as 230% cheaper figure is concerned its not present in the article.

States that SOCAR is offering Pakistan natural gas at $2.2/mmbtu
https://www.kallanishenergy.com/2020/07/29/socar-offers-record-low-spot-lng-price-to-pakistan/
https://www.naturalgasworld.com/azerbaijans-socar-offers-lowest-price-in-pakistan-lng-tender-80813

As per ENI and Gunvor their contract prices have diverged quite heavily from global spot LNG prices:

If what the articles state is correct it may be a lot more than 230% cheaper.

Nawaz Sharif special thank you to Qatri Prince

Lol, he was securing his retirement plans in Qatar but I guess change of plans required him to live in the UK instead.

 

[Path-Finder]

To be fair buying anything in bulk with contracts is probably the best way to secure a good deal (i.e. bulk discounts).

LNG prices are as low as they are now because of lockdowns and slowdowns occurring globally. This wasn't really something anyone predicted at least no one had any concrete dates.

However, we can scrutinize whether the deal at that time was a good one based on available information.

Personally I was, and still am, more supportive of directing investments into Pakistani shale resources and lignite not just for economic reasons but also national security and strategic interests. If necessary I'd rather Pakistani's pay a slight premium for locally produced shale gas than import oil/gas from abroad.

I remember when the LNG genie was released from its bottle some years ago! then many people said that LNG prices are coming down globally due to the extraction technology. At present LNG prices are low and we just saw the ov get cheap LNG and without any contract.

 

[khail007]

it is once you get in the decision making chair



almost all.

Puttar chawalan na maar - everyone knows you are an active member of NANI media cell for 'PAPA BUCHAOO' campaign.

 

[El Sidd]

Puttar chawalan na maar - everyone knows you are an active member of NANI media cell for 'PAPA BUCHAOO' campaign.

lol

 

[volatile]

well educate us. what are those technical jargon things and how does all of that tie us in a contract, which means we buy LNG at a high fixed price which is globally lower to add further? why did we buy ~$2 mmbtu now as compared to we MUST BUY AT FIXED PRICE FOR A LONG PERIOD!!

I don't want technical yahvian and bongian to justify the kartoot and you show yourself as some intellechawal either.

Oh mere Khudda .Broken lots are when one buyer refused to buy due to any reason the supplier charged them X amount of total invoice value and remaining since in sea sold to closet value of break even ,Its one off event e.g In world when you require 100 ships in a year you hardly find more than 1% of such lots these are cheaper but cant guarantee future as well . We dont buy LNG at high price we buy at a certain formula which is lowest in the world .Try NAB trial of Shahid Khaqan you will see what it meant

 

[Path-Finder]

Oh mere Khudda .Broken lots are when one buyer refused to buy due to any reason the supplier charged them X amount of total invoice value and remaining since in sea sold to closet value of break even ,Its one off event e.g In world when you require 100 ships in a year you hardly find more than 1% of such lots these are cheaper but cant guarantee future as well . We dont buy LNG at high price we buy at a certain formula which is lowest in the world .Try NAB trial of Shahid Khaqan you will see what it meant

yani baqi har banda chawal hai te tuse noon league wale bare sayane ho. fittay munh twade. tell us the formula that Qatari LNG which negotiated through the front man saif ur rehman is so cheap that we the current gov asked Qatar for renegotiation on this bc deal and still tendered and bought cheaper LNG!

Are you sure the country receives 100 LNG vessels a year?

 

[volatile]

yani baqi har banda chawal hai te tuse noon league wale bare sayane ho. fittay munh twade. tell us the formula that Qatari LNG which negotiated through the front man saif ur rehman is so cheap that we the current gov asked Qatar for renegotiation on this bc deal and still tendered and bought cheaper LNG!

Are you sure the country receives 100 LNG vessels a year?

you have lost it completely

 

[ziaulislam]

in a market saturated with LNG! you have choices and have the power to bid for the lowest price on LNG. Its not like Qatari LNG comes with added goodness that is not found in other LNG!!

You enter the country into a contract that you cannot get out of! YOU MUST PURCHASE AT A SET PRICE!! WTF.

What piece of excrement does that?

it was stupid period

what stupid is that we had shipments we couldn't offload(demand fluctuation) in another words in summer we had LNG that we didnt know what to do with it!!! this caused more losses as well

than you built terminals with huge capacity charges issues.terminal should have been built on open bidding process

so basically a big screw up everywhere in the power sector..the mess is so big that i doubt anyone can clear it in 5-10 years

key solution is start building mega hydro dams NOW. convert all expensive and in efficient plants to LNG/coal now and invest in distribution..then hop that in 10 years with mix of low cost hydro/renewables and better plants you will solve this isses

 

[Path-Finder]

it was stupid period

what stupid is that we had shipments we couldn't offload(demand fluctuation) in another words in summer we had LNG that we didnt know what to do with it!!! this caused more losses as well

than you built terminals with huge capacity charges issues.terminal should have been built on open bidding process

so basically a big screw up everywhere in the power sector..the mess is so big that i doubt anyone can clear it in 5-10 years

key solution is start building mega hydro dams NOW. convert all expensive and in efficient plants to LNG/coal now and invest in distribution..then hop that in 10 years with mix of low cost hydro/renewables and better plants you will solve this isses

late but the good thing that is where we are headed. The gov should set up local solar manufacturing to ease imports as more and more people are switching to solar.

 

[Microsoft]

petroleum products are at their cheapest now in international market.

Just like those who make excuses for PTI you are equally ready to defend thieves like Nawaz Shariff. Cheapest petroleum products are no excuse for a 230% difference especially in LNG.

 

[Microsoft]

Hi,

It does. You will have to do a little math though.

Qatar Price : 13.37% of Brent

SOCAR Price: 5.74% of Brent

Which makes this offer, 2.329 times or 232.9% cheaper than Qatar's LNG.

Although, the comparison isn't fair, as one is long term contract and the other is one time buy. But the article does mention it.

Can you share source of 13.37% Qatari price?

 

[farok84]

Can you share source of 13.37% Qatari price?

Hi,
Sure, please find links attached.

https://tribune.com.pk/story/102702...of-approval-for-15b-lng-deal-with-qatar?amp=1

"A top government functionary told The Express Tribune that the ECC approved the price committee recommendation. The committee had recommended the price at 13.39% of the Brent slope, which was lower than the 13.90% price which Qatar had earlier offered. Overall, at the existing rates, the 15-year deal cost would come down to $15.3 billion from the earlier estimated price of $16 billion.

Last week, a report had quoted the petroleum minister as saying that at 13.39% of Brent price, the delivered LNG price at Port Qasim would be $5.50 per million british thermal units (mmbtu).

According to the proposed SPA, in the first year Qatar will supply a minimum 1.5 million tons per annum (mtpa) of LNG which can be increased up to 3 mpta at PSO’s request in the first two years. From January 2018 until December 2031, the volume will be 3 mpta and Pakistan will have to buy the entire quantity or pay the full price."

(If my memory serves right, Brent was around $39-40 mark at the time of contract signage)

https://www.dawn.com/news/1238619

"The annual contract quantity for 2016 has been agreed at a prorate of 2.25 metric tonne while the price for each cargo has been agreed at 13.37 per cent of Brent."


https://www.thenews.com.pk/amp/366554-pakistan-saved-600m-in-qatar-lng-deal-bloomberg

"The contract price of the LNG per million British thermal units is the equivalent of 13.37 percent of the average price of Brent oil futures for the preceding three months"

Original article on Bloomberg, but you might have to sign up to read it.

https://www.bloomberg.com/news/arti...nts-off-each-other-saved-pakistan-600-million

 

[Path-Finder]

Hi,
Sure, please find links attached.

https://tribune.com.pk/story/102702...of-approval-for-15b-lng-deal-with-qatar?amp=1

"A top government functionary told The Express Tribune that the ECC approved the price committee recommendation. The committee had recommended the price at 13.39% of the Brent slope, which was lower than the 13.90% price which Qatar had earlier offered. Overall, at the existing rates, the 15-year deal cost would come down to $15.3 billion from the earlier estimated price of $16 billion.

Last week, a report had quoted the petroleum minister as saying that at 13.39% of Brent price, the delivered LNG price at Port Qasim would be $5.50 per million british thermal units (mmbtu).

According to the proposed SPA, in the first year Qatar will supply a minimum 1.5 million tons per annum (mtpa) of LNG which can be increased up to 3 mpta at PSO’s request in the first two years. From January 2018 until December 2031, the volume will be 3 mpta and Pakistan will have to buy the entire quantity or pay the full price."

(If my memory serves right, Brent was around $39-40 mark at the time of contract signage)

https://www.dawn.com/news/1238619

"The annual contract quantity for 2016 has been agreed at a prorate of 2.25 metric tonne while the price for each cargo has been agreed at 13.37 per cent of Brent."


https://www.thenews.com.pk/amp/366554-pakistan-saved-600m-in-qatar-lng-deal-bloomberg

"The contract price of the LNG per million British thermal units is the equivalent of 13.37 percent of the average price of Brent oil futures for the preceding three months"

Original article on Bloomberg, but you might have to sign up to read it.

https://www.bloomberg.com/news/arti...nts-off-each-other-saved-pakistan-600-million

do you work in the oil/gas industry?