By SKM
January 29, 2024
ISLAMABAD: The government-owned Pakistan LNG Limited (PLL) in first phase has managed to divert two LNG cargoes of ENI to the international market which were to arrive in February and March to the international market following the recent request of the Sui Northern which is unable to bring down the gas pressure in the national gas network from the danger mark of 5 billion cubic feet. The line pack pressure continued to stay above 5bcf in January, 2025 putting the gas network in jeopardy.
“The government-owned entity will sell the two LNG cargoes which were due in February and March each in the international market on profit sharing basis. PLL is in term contract with ENI for 15 years under which ENI provides one LNG cargo per month at the cost of 12.14 percent of the Brent,” a senior official of Energy Ministry told EXclsuivewaves.com.pk.
“Yes, we have after consultation with the LNG trading company—ENI have managed to divert two LNG cargoes to bail out SNGPL from the line pack pressure in the first phase, but for the remaining 9 cargoes, we will take the decision later keeping in view the given situation.”
When contacted, PLL management showed an inability to confirm because of an NDA (non-disclosure agreement) signed with ENI, but it did not deny the development and preferred to remain silent.
SNGPL in its letter written on January 21, 2025 to the federal government asked to divert 11-term LNG cargoes to be imported in 11 months of 2025 from ENI — to the international market as the Power Division has refused to increase the use of RLNG for power generation even during June, July and August—the peak summer season.
The Power Division says the electricity demand is going down and it would not run the RLNG-based power plants at the optimum level for power generation because they rank at the last of the Economic Merit Order (ECO) list. The electricity generation cost of RLNG power plants is at the higher side which stands at Rs26-27 per unit.
The refusal of the power division has put the top mandarins of the petroleum division on the tightrope who are already trying to convince Qatar to defer 5 more LNG cargoes to 2026. Qatar has already deferred the 5 LNG cargoes to 2026 which were to arrive in 2025 under the flexible clause of the 15 year contract. Pakistan LNG Limited (PLL) and ENI in 2017 signed the 15-year contract under which ENI is bound to provide LNG cargo per month at 12.14 per cent of Brent.
Sui Northern wrote a letter on January 21, 2025 to the Managing Director of Pakistan LNG Limited (PLL) and mentioned that the matter of surplus RLNG was taken up with the Power Division and was requested to review demand of RLNG for the upwards revision during June, July and August 2025. The letter says, NPCC (National Power Control Cell) responded on January 21, 2025 saying that the demand of the power sector for June, July and August shall remain unchanged in view of the declining electricity demand. So Sui Northern requested PLL MD to take up the matter with ENI for the diversion of LNG cargoes for the remaining 11 months of 2025.
The gas consumption has gone down by 150mmcf per month. It is because of that 18 LNG cargoes have become additional. The captive power plants are also going to be disconnected by January 31. They will be connected to the grid electricity under the structural benchmark of IMF loan programme of $7 billion. This will increase the number of additional LNG cargoes up to 30.
The PLL-KE LNG supply deal will end by 2025, and if not extended, the number of additional RLNG cargoes will go up by six to 36.Ends
