Pakistan bought costliest LNG in February 2018: Nadeem | Pakistan Today

Pakistan bought costliest LNG in February 2018: Nadeem

–Details purchase & sale mechanism to reject negative media reports

ISLAMABAD: Special Assistant to the Prime Minister (SAPM) on Petroleum Nadeem Baber has said that Pakistan had purchased the costliest liquefied natural gas (LNG) in February 2018 at $10.25 per MMBtu (million British thermal units) with a 71-day gap between tender opening and delivery of the gas.

In a series of video tweets on Friday, the SAPM explained the purchase and sale mechanism of LNG, rejecting negative reports appearing in sections of the media for the last one-and-a-half months.

He said the previous government of Pakistan Muslim League-Nawaz (PML-N) had introduced the LNG in Pakistan’s market without constructing any storage facility and declaring it as petrol, which cost almost double than the locally produced gas.

In the given scenario, the SAPM said every LNG shipment had to be consumed within four to five days, in the absence of storage facilities, for berthing of another cargo ship.

Declaring the LNG as a petroleum product by the PML-N regime, meant that every consumer using the LNG had to pay the full price of the commodity, he explained. He said a question was being asked repeatedly as to why the LNG had not been procured in summer when its price was down, which also showed poor information of the elements spreading speculative news in the media.

The SAPM said that it is on record that the government had provided the LNG to each and every consumer whosoever demanded it in all months of the summer season.

He said another allegation is being levelled against the government that in summer, the fuel oil was used in power generation that was why the sufficient LNG had not been procured. “It is also totally wrong and based on speculations and misinformation.”

Babar said the previous government in its last summer season had produced 28 per cent of the total electricity through the fuel oil, while the present government in the summer-2019 produced just 5 per cent and 3.6 per cent of the total electricity in eleven months of the current year. He said all the data in that regard is available on the website of the National Electric Power Regulatory Authority (NEPRA).

He said there was another misconception that early buying could help lower the cost of LNG, and the government should have procured the commodity for December-January in August instead of October.

Elaborating this point, he said Pakistan had purchased the costliest LNG in February 2018, the last year of the PML-N in government, at $10.25 per MMBTU with a 71-day gap between tender opening and delivery of the gas. In August 2018, the PTI government procured the cheapest cargo in the last five-year trade of LNG, with a gap of just 39 days between the tender opening and delivery. “So it is a totally wrong perception that more days between tender and delivery means less price,” he added.

To date, the SAPM said, the PTI government procured all the LNG cargoes with an average gap of 61-62 days between tender and delivery, adding the cargoes for December-January had been acquired with a gap of 45-50 days.

The PML-N government, he said, in its last winter December 2017-January 2018 had procured 18 LNG cargoes at an average rate of $8 per MMBTU, while the PTI government purchased 23.5 LNG cargoes at an average cost of $6.34 per MMBtu for December 2020–January 2021.

The Law Today Pakistan (TLTP) is an independent news service.