Featured Pakistan Forced to Buy Priciest LNG Shipments to Avoid Blackouts

[313ghazi]

If You guys had built your section of the ip pipeline,then you`d have had all the gas you`d ever needed,and you certainly wouldnt have had to worry about stupid sh!t like this.
Sadly tho,you still havent even started work on your section of the ip pipeline yet.You`d better hurry up and get a move on,after all you`ve only got a little over 2 years left on the 5 year extension that rouhanis government gave you back in 2019.
The clock is ticking......

With the traitors we have in power, especially the uniformed ones - this can never happen.


We need to cleanse our country of our elite first.

 

[CrazyZ]

Hi,

He is talking about ENI and Gunvor term contracts that were signed in late 2016, at only 30% cargo value as default penalty, which allowed both suppliers to keep on defaulting at will, whenever spot prices shot up. Gunvor has defaulted on 6 of it's 7 scheduled cargoes from January-June, 2022. The contract expired in July.

Qatar contracts (both 2016, 5 cargoes/ month and 2021, 2 cargoes/month at the moment eventually increasing to 4 cargoes/ month by 2024) are in effect.

PTI should have signed another big fixed price contact with Qatar for LNG or one with Iran for piped gas. Relaying on spot market priced LNG from western corporates was a huge blunder. Spot prices have skyrocketed and the western corporates are violating their contracts. In general, I would say Pakistan's oil and gas policy has been a disaster for the last 40 years.

 

[CrazyZ]

With the traitors we have in power, especially the uniformed ones - this can never happen.


We need to cleanse our country of our elite first.

Leadership was dumb put not traitors. They went for contracts with the lowest bidders......but as the old saying goes....you get what you pay for.

 

[chinasun]

The price of pipeline natural gas is much lower than the market price, but a long-term natural gas contract is needed.Generally speaking, long-term gas contracts are much cheaper than short-term ones.One is wholesale price and the other is retail price.

 

[farok84]

PTI should have signed another big fixed price contact with Qatar for LNG or one with Iran for piped gas. Relaying on spot market priced LNG from western corporates was a huge blunder. Spot prices have skyrocketed and the western corporates are violating their contracts. In general, I would say Pakistan's oil and gas policy has been a disaster for the last 40 years.

Hi,

Qatar has no Lng left till its expansion is completed. The contract Pti has signed, is for 4 cargoes/ month from 2024 (that is 2 from 2022, 3 from 2023 and 4 from 2024 onwards). Our contracted regasification capacity is at 1200mmcfd. By 2024, we should have 1000mmcfd covered, out of which 900mmcfd will be from Qatar. Unless we have paying customers (firm demand), contracting more Lng on LT basis (for full regas capacity) will be foolishness, just look at EU, and the demurrage charges they have been paying. For seasonal fluctuations, Pakistan will rely on spot procurements or alternate fuels. The other offer/ option was from SOCAR (Azerbaijan), but that was too expensive (JKM + fixed component).

Pti was more interested in pipeline gas from Turkmenistan and the Russian pipeline (that Putin discussed at SCO meeting) through Afghanistan, as it gives us more options (both in terms of diversification of suppliers and end users). Gas through IP pipeline is more expensive than Qatar Lng (2016 contract price), no government in Pakistan will commit to it, until Iran lowers it down. I have written extensively on it, kindly go through my previous posts on subject, if you are interested.

 

[chinasun]

Hi,

Qatar has no Lng left till its expansion is completed. The contract Pti has signed, is for 4 cargoes/ month from 2024 (that is 2 from 2022, 3 from 2023 and 4 from 2024 onwards). Our contracted regasification capacity is at 1200mmcfd. By 2024, we should have 1000mmcfd covered, out of which 900mmcfd will be from Qatar. Unless we have paying customers (firm demand), contracting more Lng on LT basis (for full regas capacity) will be foolishness, just look at EU, and the demurrage charges they have been paying. For seasonal fluctuations, Pakistan will rely on spot procurements or alternate fuels. The other offer/ option was from SOCAR (Azerbaijan), but that was too expensive (JKM + fixed component).

Pti was more interested in pipeline gas from Turkmenistan and the Russian pipeline (that Putin discussed at SCO meeting) through Afghanistan, as it gives us more options (both in terms of diversification of suppliers and end users). Gas through IP pipeline is more expensive than Qatar Lng (2016 contract price), no government in Pakistan will commit to it, until Iran lowers it down. I have written extensively on it, kindly go through my previous posts on subject, if you are interested.

The average price of natural gas was $2.49 in 2016 and $6.67 today. It is unfair for you to compare the contract price in 2016 with the current pipeline natural gas.

 

[farok84]

The average price of natural gas was $2.49 in 2016 and $6.67 today. It is unfair for you to compare the contract price in 2016 with the current pipeline natural gas.

Hi,

I am not comparing the two.

You are talking about Henry Hub pricing, which is not applicable for Pakistan - Iran (at 13.4% of JCC/ Brent) gas sales. If Iran agrees to sell at HH, Pakistan will build IP tomorrow.

For references, please follow links in following post.

pakistan is being looted via expensive Qatari gas

The details of contract never became public and hence internet speculations. But i heard from an Iranian official that Iran had suggested Pakistan with free gas in Exchange for allowing Iran to access Indian market. Almost free, i mean. An other publicized detail was that Iran was ready to...

defence.pk

 

[CrazyZ]

Hi,

Qatar has no Lng left till its expansion is completed. The contract Pti has signed, is for 4 cargoes/ month from 2024 (that is 2 from 2022, 3 from 2023 and 4 from 2024 onwards). Our contracted regasification capacity is at 1200mmcfd. By 2024, we should have 1000mmcfd covered, out of which 900mmcfd will be from Qatar. Unless we have paying customers (firm demand), contracting more Lng on LT basis (for full regas capacity) will be foolishness, just look at EU, and the demurrage charges they have been paying. For seasonal fluctuations, Pakistan will rely on spot procurements or alternate fuels. The other offer/ option was from SOCAR (Azerbaijan), but that was too expensive (JKM + fixed component).

Pti was more interested in pipeline gas from Turkmenistan and the Russian pipeline (that Putin discussed at SCO meeting) through Afghanistan, as it gives us more options (both in terms of diversification of suppliers and end users). Gas through IP pipeline is more expensive than Qatar Lng (2016 contract price), no government in Pakistan will commit to it, until Iran lowers it down. I have written extensively on it, kindly go through my previous posts on subject, if you are interested.

Current situation proves that long term fixed price LNG contracts are better then spot market. Extra seasonal gas can be stored in depleted gas fields as a reserve.

Japanese industry boomed during 70's because they had long term fixed price contracts with Indonesia for LNG at low prices agreed to before the Arab oil embargo. EU today is forced to buy LNG at crazy high spot prices and its economy will suffer massively. If PTI had agreed to a big long term contract with Qatar when gas prices were at record lows......Pakistan could have been in a similar situation that Japan was in during the 70's.

PTI misjudged long term gas prices.....they went for the lowest bidders at the time which was spot price gas dealers.....short term thinking that proved foolish in the long run.

 

[epebble]

Hi,

I am not comparing the two.

You are talking about Henry Hub pricing, which is not applicable for Pakistan - Iran (at 13.4% of JCC/ Brent) gas sales. If Iran agrees to sell at HH, Pakistan will build IP tomorrow.

For references, please follow links in following post.

pakistan is being looted via expensive Qatari gas

The details of contract never became public and hence internet speculations. But i heard from an Iranian official that Iran had suggested Pakistan with free gas in Exchange for allowing Iran to access Indian market. Almost free, i mean. An other publicized detail was that Iran was ready to...

defence.pk

Instead of trying to import gas with non-existent foreign funds, why not use the abundant coal available locally?

 

[niaz]

Current situation proves that long term fixed price LNG contracts are better then spot market. Extra seasonal gas can be stored in depleted gas fields as a reserve.

Japanese industry boomed during 70's because they had long term fixed price contracts with Indonesia for LNG at low prices agreed to before the Arab oil embargo. EU today is forced to buy LNG at crazy high spot prices and its economy will suffer massively. If PTI had agreed to a big long term contract with Qatar when gas prices were at record lows......Pakistan could have been in a similar situation that Japan was in during the 70's.

PTI misjudged long term gas prices.....they went for the lowest bidders at the time which was spot price gas dealers.....short term thinking that proved foolish in the long run.

For the record, you cannot store " Natural gas" as it it is in the depleted gas fields. Nautural gas can only be stored either as " LNG" in the liquid state or as " CNG" in the compressed state. In both the cases one needs storerage facilities.

 

[CrazyZ]

For the record, you cannot store " Natural gas" as it it is in the depleted gas fields. Nautural gas can only be stored either as " LNG" in the liquid state or as " CNG" in the compressed state. In both the cases one needs storerage facilities.

In USA, most natural gas storage consists of using depleted natural gas or oil fields.

The Basics of Underground Natural Gas Storage - U.S. Energy Information Administration

www.eia.gov

Instead of trying to import gas with non-existent foreign funds, why not use the abundant coal available locally?

Too many existing natural gas users. Thar coal mines are not connected to the main rail system.....yet.

 

[farok84]

Current situation proves that long term fixed price LNG contracts are better then spot market. Extra seasonal gas can be stored in depleted gas fields as a reserve.

Japanese industry boomed during 70's because they had long term fixed price contracts with Indonesia for LNG at low prices agreed to before the Arab oil embargo. EU today is forced to buy LNG at crazy high spot prices and its economy will suffer massively. If PTI had agreed to a big long term contract with Qatar when gas prices were at record lows......Pakistan could have been in a similar situation that Japan was in during the 70's.

PTI misjudged long term gas prices.....they went for the lowest bidders at the time which was spot price gas dealers.....short term thinking that proved foolish in the long run.

Hi,

They did sign a big long term contract with Qatar in 2021, at the lowest ever price, only second to China's 10.19% (FOB) against PTI's 10.20% Brent (DES).

Pmln 2016 contract was for 5 cargoes per month (ACQ 3.5 million tons) and Pti's contract is for 4 cargoes per month (ACQ 3 million tons). What ACQ should have they signed for? What is the firm demand for Rlng year round? How many customers are willing to pay full price for Rlng? Few minor details one should consider before entering a long term deal, specially in absence of storage facilities.

 

[CrazyZ]

Hi,

They did sign a big long term contract with Qatar in 2021, at the lowest ever price, only second to China's 10.19% (FOB) against PTI's 10.20% Brent (DES).

Pmln 2016 contract was for 5 cargoes per month (ACQ 3.5 million tons) and Pti's contract is for 4 cargoes per month (ACQ 3 million tons). What ACQ should have they signed for? What is the firm demand for Rlng year round? How many customers are willing to pay full price for Rlng? Few minor details one should consider before entering a long term deal, specially in absence of storage facilities.

They should have a signed a large enough contract with Qatar to not need any spot market cargoes. Hindsight is 20/20 but the ENI and Gunver contracts were mistakes, IMO.

 

[farok84]

They should have a signed a large enough contract with Qatar to not need any spot market cargoes. Hindsight is 20/20 but the ENI and Gunver contracts were mistakes, IMO.

Hi,

ENI's one was definitely a mistake, just go through it's contract price and it's increments.

We will always be leaving space for spot purchases, any government can only buy the quantity which it can sell, unless we have firm year round demand or storage facilities, we will continue to rely on spot buys or alternates for seasonal fluctuations.

 

[chinasun]

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International companies are developing projects in Indonesia to convert its rich coal deposits into new fuels

https://chinadialogue.net/en/energy/indonesias-coal-gasification-plans-move-forward-despite-coal-pledge/?amp

Pakistan is rich in coal, which can be converted into natural ga