Pakistan LNG cancels huge 10-year LNG tender

[Kailash Kumar]

Pakistan LNG cancels huge 10-year LNG tender

Jessica Jaganathan

OCTOBER 15, 2019

State-owned Pakistan LNG has cancelled a tender to buy liquefied natural gas over a 10-year period and may turn to the spot market instead, two sources familiar with the matter told Reuters on Tuesday.

The company issued the tender in early June to import 240 LNG cargoes of 140,000 cubic metres each for delivery over 10 years for the country’s second LNG terminal.

But it has decided to cancel the tender due to inadequate demand for the super-chilled fuel, one of the sources said.

“(The company) has decided not to proceed with technical evaluation and opening of commercial offers as there is no demand against this tender,” the source added, declining to be identified.

“So for now, (the company) has decided to stop the process of long-term commitment until it receives long-term demand for LNG,” the source said.

Pakistan is expected to be a significant growth driver in global LNG demand with the cabinet recently approving five consortiums to progress with their LNG terminal plans.

Pakistan LNG’s cancelled tender had been keenly watched in the industry. The company was expected to publish the lowest prices offered by bidders, providing a valuable insight into the opaque LNG market, which is characterised by closed bilateral trades, private long-term supply agreements and an over-the-counter spot market.

Italy’s Eni, China’s PetroChina, Azeri state oil company SOCAR and commodities trader Trafigura had placed offers into the tender, sources had told Reuters. (Reporting by Jessica Jaganathan; editing by Louise Heavens and Jason Neely)

https://www.reuters.com/article/pakistan-lng-imports-idUSL3N2702SB

 

[Chak Bamu]

Question: Who will make decisions while NAB is around?
Answer: No One.

 

[ARMalik]

Going to the Spot market is fine but you need expert market consultants to ensure that your position is "Hedged" against potential spikes in the LNG price. If there is One unexpected price spike, you can lose Billions. So I sincerely hope that these goons have expertise in "Spot Market" cause I don't expect an ounce of intelligence from these corrupt Clowns.

 

[Indus Pakistan]

Question: Who will make decisions while NAB is around?
Answer: No One.

Few questions and clarifications would be appreciated since I am bit lost on this one.

• was NAB not set up by Gen. Musharaf?
• has NAB not been operating since and through Zardari, Nawaz tenures extending to 10 years since Musharaf;s exit?
• the director of NAB Mr Javid Iqbal not appointed by the previous PML-N government
• charges brought against Nawaz and others including Zardari not date before PMIK's tenure?
• if there are issues with NAB why did Zardari and Nawaz not fix them when they were in power?
• why is NAB actions painted as PMIK's witch hunt when NAB was set up ny Musharaf, operated under Zardari and Nawaz governments. Has charges dating from that time ans most importantly the guy running NAB [Javid] is a PML-N appointee?

thanks in advance.

 

[war&peace]

Question: Who will make decisions while NAB is around?
Answer: No One.

sir if you read the article carefully, it clearly states due to the lack of any long term demand.

 

[Chak Bamu]

Few questions and clarifications would be appreciated since I am bit lost on this one.

• was NAB not set up by Gen. Musharaf?
• has NAB not been operating since and through Zardari, Nawaz tenures extending to 10 years since Musharaf;s exit?
• the director of NAB Mr Javid Iqbal not appointed by the previous PML-N government
• charges brought against Nawaz and others including Zardari not date before PMIK's tenure?
• if there are issues with NAB why did Zardari and Nawaz not fix them when they were in power?
• why is NAB actions painted as PMIK's witch hunt when NAB was set up ny Musharaf, operated under Zardari and Nawaz governments. Has charges dating from that time ans most importantly the guy running NAB [Javid] is a PML-N appointee?

thanks in advance.

1. Yes. That is the seed of the problem. NAB was created via an ordinance by a dictator to create a king's party. It si the same thought that gave us gem like EBDO during Ayub's martial law regime. Military dictators think quite alike, in case you noticed.
2. Yes. But the cost of getting rid of NAB was deemed too high. Its hard to attend to such business when one has to deal with attack dogs.
3. Javed Iqbal's appointment is quite a story that I will not narrate here. You can find it out on your own. It was a major mistake by a besieged PML-N government which had to accommodate PPP's wish, even though Javed Iqbal was well-known as an Establishment pawn.
4. Not saying anything about IK and his regime. Though I would observe that he is often found to be taking credit for NAB decisions - something that will eventually bite him.
5. NAB is a problem. It was created by a dictator for a specific purpose and it has been used very effectively by Establishment ever since. It would be a good day when NAB is firmly put down, because its DNA is unconstitutional. You would be blind not to notice the effects of it running amok. In any case, like I observed earlier, touch NAB was difficult since NAB as leverage against civilian oversight was too valuable to Establishment and nobody could touch it without getting burned. There is more to be said, but this should suffice now.
6. Already discussed & no need to repeat.

Now allow me to ask:
1. Why have you made so much out of a simple statement?
2. Why is NAB so dear to you?
3. What has it done so far that endears it to you?
4. What sort of bubble you inhabit that keeps you from seeing the damage NAB is causing to Pakistan - politically, socially, economically, in matters of governance, etc...?
5. My post had direct relevance, since decision-makers are deterred due to fear of NAB. But while this thread is not about NAB per se, Why must you go OT and discuss it so minutely here?

sir if you read the article carefully, it clearly states due to the lack of any long term demand.

Sure. That is what it says.

But dig a bit deeper. How come Pakistan does not foresee demand while the economy is slowly growing and yet there is still load-shedding going on? All this while LNG is super cheap compared with Furnace Oil. Thanks to Shahid Khaqan Abbassi and his bulldozing of vested interests, Pakistan saves $1.2 B every year due to substitution of Furnace Oil by LNG. Why may Pakistan not continue to replace more expensive fuel with LNG or install LNG power plants until serious Hydel power addition happens?

There is a difference between excuses and reasons. My contention is that NAB's highhanded approach has resulted in a freeze in decison-making.

If you want true stories, I would first point out the debacle of SKA being in NAB custody for such a very long time with zero results so far. I could recount others, such as a retired bureaucrat being arrested for "failing to question a 'flawed' policy", even though he was not in attendance at the meeting upon which questions are raised? This is way beyond a farce now. It is now causing serious long-term damage to polity, society, & bureaucracy.

 

[pkuser2k12]

Few questions and clarifications would be appreciated since I am bit lost on this one.

• was NAB not set up by Gen. Musharaf?

 

[RoadRunner401]

It was created by a dictator for a specific purpose and it has been used very effectively by Establishment ever since. It would be a good day when NAB is firmly put down, because its DNA is unconstitutional.

Are you claiming that all the ones Nabbed by NAB are innocent victims?

 

[Mentee]

1. Yes. That is the seed of the problem. NAB was created via an ordinance by a dictator to create a king's party. It si the same thought that gave us gem like EBDO during Ayub's martial law regime. Military dictators think quite alike, in case you noticed.
2. Yes. But the cost of getting rid of NAB was deemed too high. Its hard to attend to such business when one has to deal with attack dogs.
3. Javed Iqbal's appointment is quite a story that I will not narrate here. You can find it out on your own. It was a major mistake by a besieged PML-N government which had to accommodate PPP's wish, even though Javed Iqbal was well-known as an Establishment pawn.
4. Not saying anything about IK and his regime. Though I would observe that he is often found to be taking credit for NAB decisions - something that will eventually bite him.
5. NAB is a problem. It was created by a dictator for a specific purpose and it has been used very effectively by Establishment ever since. It would be a good day when NAB is firmly put down, because its DNA is unconstitutional. You would be blind not to notice the effects of it running amok. In any case, like I observed earlier, touch NAB was difficult since NAB as leverage against civilian oversight was too valuable to Establishment and nobody could touch it without getting burned. There is more to be said, but this should suffice now.
6. Already discussed & no need to repeat.

Now allow me to ask:
1. Why have you made so much out of a simple statement?
2. Why is NAB so dear to you?
3. What has it done so far that endears it to you?
4. What sort of bubble you inhabit that keeps you from seeing the damage NAB is causing to Pakistan - politically, socially, economically, in matters of governance, etc...?
5. My post had direct relevance, since decision-makers are deterred due to fear of NAB. But while this thread is not about NAB per se, Why must you go OT and discuss it so minutely here?


Sure. That is what it says.

But dig a bit deeper. How come Pakistan does not foresee demand while the economy is slowly growing and yet there is still load-shedding going on? All this while LNG is super cheap compared with Furnace Oil. Thanks to Shahid Khaqan Abbassi and his bulldozing of vested interests, Pakistan saves $1.2 B every year due to substitution of Furnace Oil by LNG. Why may Pakistan not continue to replace more expensive fuel with LNG or install LNG power plants until serious Hydel power addition happens?

There is a difference between excuses and reasons. My contention is that NAB's highhanded approach has resulted in a freeze in decison-making.

If you want true stories, I would first point out the debacle of SKA being in NAB custody for such a very long time with zero results so far. I could recount others, such as a retired bureaucrat being arrested for "failing to question a 'flawed' policy", even though he was not in attendance at the meeting upon which questions are raised? This is way beyond a farce now. It is now causing serious long-term damage to polity, society, & bureaucracy.

This post qualifies nothing short of a word play. Like judiciary any DEVELOPING country needs a civilian accountability body independent of the executive control. Now the crown's legacy is deliberately hindering the govt business by engaging in a sort of silent strike just coz they cannot make kickbacks and have no control over this institution . Thank you navaz sharif for introducing such a department and thank you musharaf for partially making it functional.

 

[war&peace]

Sure. That is what it says.

But dig a bit deeper. How come Pakistan does not foresee demand while the economy is slowly growing and yet there is still load-shedding going on? All this while LNG is super cheap compared with Furnace Oil. Thanks to Shahid Khaqan Abbassi and his bulldozing of vested interests, Pakistan saves $1.2 B every year due to substitution of Furnace Oil by LNG. Why may Pakistan not continue to replace more expensive fuel with LNG or install LNG power plants until serious Hydel power addition happens?

There is a difference between excuses and reasons. My contention is that NAB's highhanded approach has resulted in a freeze in decison-making.

If you want true stories, I would first point out the debacle of SKA being in NAB custody for such a very long time with zero results so far. I could recount others, such as a retired bureaucrat being arrested for "failing to question a 'flawed' policy", even though he was not in attendance at the meeting upon which questions are raised? This is way beyond a farce now. It is now causing serious long-term damage to polity, society, & bureaucracy.

Naah that's not true. I know you have a political affiliation but please do not try to justify or hide their corruption.

 

[RealNapster]

Question: Who will make decisions while NAB is around?
Answer: No One.

But it has decided to cancel the tender due to inadequate demand for the super-chilled fuel, one of the sources said

 

[Chak Bamu]

Are you claiming that all the ones Nabbed by NAB are innocent victims?

Not really. But NAB violates all norms of justice by placing the onus of proof on the accused. This is how entities like PML-Q are created

Here is some free education: NAB created via ordinance in 1999.

http://nab.gov.pk/home/introduction.asp

This post qualifies nothing short of a word play. Like judiciary any DEVELOPING country needs a civilian accountability body independent of the executive control. Now the crown's legacy is deliberately hindering the govt business by engaging in a sort of silent strike just coz they cannot make kickbacks and have no control over this institution . Thank you navaz sharif for introducing such a department and thank you musharaf for partially making it functional.

Your post drips with naivete.

Let us see if you could work in such an environment:
https://tribune.com.pk/story/2079361/6-will-sign-files/

What is a bureaucrat to do, if not refuse to make decisions?

Naah that's not true. I know you have a political affiliation but please do not try to justify or hide their corruption.

Really? No rejoinder to my points? At least try to make an effort.

My affiliation is with constitutionalism, while your affiliation is with deep state dodos. Either they go extinct, or they make Pakistan go extinct. Its a pretty stark choice, unless there is divine intervention.

 

[Kabira]

NAB is only good for drama. No progress on any case. They arrest people just to create fear. End result Pakistan 1 year was wasted. Now gov had to create CPEC authority which NAB cannot touch. Why is that?

Why NAB is taking so much time for Zardari case? And why he is still in jail if tomorrow he will be released? Making mockery of whole process if someone like Zardari is given clean chit.

In Pakistan few years have to pass before we see end result of any policy.

 

[Syed1.]

Are you claiming that all the ones Nabbed by NAB are innocent victims?

Patwari gonna be patwaris.

 

[niaz]

sir if you read the article carefully, it clearly states due to the lack of any long term demand.

Honorable War & Peace.
Before anything else, kindly read this:


“Pakistan LNG demand could triple over next 3-5 years

WED, MAR 06, 2019 - 12:39 PM

Pakistan's demand for liquefied natural gas (LNG) could more than triple in the next three to five @years, the chief executive of Pakistan LNG said on Wednesday. PHOTO: REUTERS

“[SINGAPORE] Pakistan's demand for liquefied natural gas (LNG) could more than triple in the next three to five years, the chief executive of Pakistan LNG said on Wednesday.

Last year, Pakistan imported nearly seven tonnes of LNG, data from Refinitiv Eikon shows. This year, that could grow to as high as 15 million tonnes and to up to 25 million to 30 million tonnes over the next three to five years, said Adnan Gilani, managing director and chief executive of Pakistan LNG.

Pakistan LNG is a state-owned company that buys LNG from the international market to supply to the domestic market.

Both of the country's existing LNG terminals are currently nearly fully utilised. Another two are expected to announce a final investment decision this year.

Pakistan's two import terminals have a regas capacity of 1.2 billion to 1.3 billion cubic feet of gas per day, or about nine million to 10 million tonnes of LNG a year, according to Mr Gilani's presentation at the LNGA 2019 conference in Singapore.

Pakistan is expected to negotiate a few more long-term contracts to import LNG into the country, Mr Gilani said.

Pakistan is facing a serious energy crisis with repeated blackouts and gas supply outages that led to the sacking of the heads of two of its main gas distribution utilities in January.”

https://www.businesstimes.com.sg/en...n-lng-demand-could-triple-over-next-3-5-years

And this:


"Exxon Mobil, Shell among groups picked to build five Pakistan LNG terminals


ISLAMABAD (Reuters) - Pakistan has given the go-ahead to five consortiums, including Exxon Mobil, Royal Dutch Shell and Mitsubishi, to progress with their liquefied natural gas (LNG) terminal plans, a minister told Reuters on Friday.

The move comes on the heels of the arrests of two Pakistan business executives involved in building the country’s previous LNG terminals, cooling sentiment in the industry.

Pakistan is seen as a big growth market for the global LNG industry as domestic gas production slips in tandem with a growing industrial economy hungry for gas.

But an anti-corruption drive by Prime Minister Imran Khan led to the arrests of a former boss of Engro, which built the first import terminal, and the chief of another company associated with a second terminal.

Power and Petroleum Minister Omar Ayub Khan downplayed any impact the arrests may have had on investors’ sentiment, saying the interest from multinationals spoke for itself.

“That is a ringing endorsement that (our) policies are clear and transparent,” he said. “It’s a competitive market.”

The groups approved to progress are Tabeer Energy, a unit of Mitsubishi, Energas with partner Exxon; Pakistan GasPort and commodities trader Trafigura; Engro with partner Shell, and Gunvor with Pakistani conglomerate Fatima.

Tabeer Energy, Engro and Energas already announced plans for the terminals which will be Floating Storage and Regasification Unit (FSRUs) vessels. These can be newbuild or converted LNG tankers, speeding up the delivery of the import projects.

Exxon and Shell did not respond to requests for comment. Mitsubishi has project details on Tabeer Energy’s website. Engro, Fatima and GasPort were not immediately reachable for a comment.


Trafigura declined to comment on the specific project but said it was “committed to grow and expand its existing regas (regasification) capacity” in Pakistan.

The five groups must submit plans for the terminals to the ministry of ports and shipping by Nov. 5 for approval, but cabinet has already approved them, Khan said, adding they could be in operation within two to three years.

While the consortiums will pay for the construction of the terminals and royalty fees, Pakistan’s contribution will be to fund the building of a $2 billion north-south pipeline to distribute the gas, and storage facilities, he said.

SIGNIFICANT DENT

Pakistan is chronically short of gas for power production and to supply manufacturers such as fertiliser makers, hobbling the country’s economy.

Its two LNG plants have a capacity of 4.5 million tonnes a year (mtpa) each. Khan said a third 4.5 mtpa terminal could start next year. Imports amounted to 6.7 mtpa in 2018 and are set to rise to 7.9 mtpa this year, according to Refinitiv data.

The new terminals “will make a significant dent in the gas shortage,” Khan said.

But the under-utilisation of one terminal points to a structural problem in Pakistan’s energy industry, analysts have said, which is characterised by subsidised but dwindling domestic gas rivalling more expensive LNG.

“I think they are assessing the demand as the second LNG terminal is currently underutilised,” one industry source said. “Domestic gas is cheaper and LNG is expensive. Plus we have some coal plants which are cheaper than RLNG fired power plants.”

The fertiliser industry, a large consumer of gas, has suffered from a steep increase in government-set prices, Sher Shah Malik, executive director of Fertiliser Manufacturers of Pakistan Advisory Council, told Reuters.

Two of Pakistan’s urea plants lack gas to run regularly and one closed last year, forcing Pakistan to import fertiliser. Malik said LNG, priced at international benchmarks, was often too expensive for fertiliser companies pointing to a need to tap new domestic gas reserves.

“We are heading for very difficult times,” he said. “If nothing happens, we’ll be high and dry.”

https://in.reuters.com/article/paki...ight-to-five-lng-terminal-plans-idINKBN1W50H2


Ground realities are that Pakistan is desperately short of gas. New finds are minuscule and the TAP pipeline project has not progressed beyond the discussion stage. Iran-Pakistan gas pipeline is not likely to be completed any time soon due to sanctions on Iran. In such circumstances, the only way Pakistan can make for the gas /energy shortages is through the import of LNG. However, everyone is scared of being put behind bars on mere suspicion and without being charged. Why would any one dare to sign a 10-year deal? They would rather import on 'Spot' basis. Even if there is an increased gas loading shedding due to delay in the arrival of imported LNG, so what? No one has gone to prison for causing energy shortage!

Additionally, if there would be no demand for the LNG, why is GOP giving a go-ahead to 5 new LNG terminals?

Nevertheless, if you would rather accept the lame excuse that there is no demand; you are welcome to your opinion.