LNG

Pakistan said it was seeking a third long-term liquefied natural gas supply contract with Qatar possibly involving deferred payments as the Asian nation adjusts to higher global gas prices and record spot cargo values.

Qatar’s Minister of State for Energy Affairs, Saad Sherida Al-Kaabi who is also Chief Executive of QatarEnergy, met two visiting Pakistani minister last week in Doha.

They were Pakistan’s Defence Minister and the Special Envoy of the Prime Minister, Khawaja Muhammad Asif, and Minister of State for Petroleum Musadik Masood Malik.

A statement from the Petroleum Ministry’s office said the discussions in Qatar had covered the enhancement of cooperation in the field of energy between Qatar and Pakistan.

Petroleum Minister Malik said the Pakistani government and Qatar were exploring different “innovative” pricing and supply strategies.

“Deferred payment would be enormously beneficial for Pakistan in the way of cash flows, but that is not the only discussion that we are having,” explained Malik in a statement back in Pakistan.

Existing agreements

Pakistan already has two long-term supply deals with Qatar. The first was signed in 2016 for five cargoes a month, and the second in 2021, under which Pakistan currently gets three monthly shipments.

However, Pakistan’s main cities are suffering power outages as energy procurement is more intermittent because of higher natural gas prices to supply the expanded gas-fired power infrastructure.

Pakistan was looking to secure a new five-year or 10-year LNG supply deal for three monthly cargoes, as well as an additional cargo under an existing deal.

Pakistan imported 8.19 million tonnes of LNG last year, an increase of 10.5 percent on the previous year.

Despite its single-digit volumes, Pakistan is still the sixth-largest LNG importer with plenty of scope for expanding its current two floating facilities at Port Qasim, located to the east of Karachi.

It is behind China, Japan, South Korea, India and Taiwan in the importing ranking and ahead of Thailand.

The biggest supplier last year was Qatar with 5.24MT of deliveries and with other suppliers such as the US, Egypt, Angola and the United Arab Emirates supplying volumes of around 500,000 tonnes each.

The Pakistani government's fuel discussions with Qatar come at a time when it is awaiting the release of funds from the International Monetary Fund to help replenish foreign exchange reserves. 

Pakistan is preparing to fast-track work on the PakStream Gas Pipeline (PSGP) project that will be constructed by Russia to help deliver LNG imports received at Port Qasim near the south coast city of Karachi to the northern Pakistani province of Punjab.

June 25 (LNGJ) - Pakistan is expecting to receive a $4.5 billion trade financing facility over three years from the Islamic Trade Finance Corp. (ITFC), a member of the Islamic Development Bank Group which provides member countries with funds from financial institutions in the Middle East. The funding is for LNG imports and also to cover shipments of crude oil and petroleum products.

   “A formal financing framework agreement, along with an annual financing plan of about $1.5Bln each year, will be signed early next week,” said a statement. The Saudi Fund for Development has already provided Pakistan with $531 million for the project financing of power plants.

The US Department of Energy has just published its latest liquefied natural gas export data illustrating the development of seasonal price differentials for the various plants, while Pakistan joined India in the top five of monthly recipients and the Indians overtook the UK in the overall totals.

US cargo prices declined in September to an average of $5.35 per million British thermal units from $5.55 per MMBtu in the previous month, according to the DoE November report.

The proportion of spot cargoes compared with the contracted and other tolling-based deliveries has declined in 2020.

The number of overall spot cargoes dropped in September to 8.4 percent from 8.6 percent in the previous month. The total volumes shipped since February 2016 came to 5,369.2 Bcf of which 449.6 Bcf were spot shipments.

The average year-to-date prices for each plant (from the export point) from highest to lowest in September 2020 were: Cove Point (Maryland) $6.33 per MMBtu, Cameron (Louisiana) $5.70 per MMBtu, Sabine Pass (Louisiana) $4.97 per MMBtu, Freeport (Texas) $4.80 per MMBtu,, Corpus Christi (Texas) $4.29 per MMBtu and Elba Island (Georgia) $4.22 per MMBtu (just four cargoes shipped by September since December 2019).

Since US LNG exports began more than four years ago in February 2016, the DoE said a total of 1,650 cargoes (5,367 billion cubic metres), had been shipped on LNG carriers and 526 in ISO containers through September 2020 to 38 different countries, including to four nations in the Caribbean who receive ISO containers.

The top five countries of destination represented 52.3 percent of total US LNG exports in September 2020 and Pakistan joined India in this group.

The top five destinations for cargoes in September were: South Korea (32.1 billion cubic feet – nine cargoes); Spain (15.2 Bcf – five cargoes); China (11.2 Bcf – three cargoes); India (10.5 Bcf – three cargoes) and Pakistan (9.9 Bcf – three cargoes).

A total of 45 cargoes were shipped in September compared with 36 in August and 50 shipments in September 2019.

The list of the Top 10 countries of destination overall since 2016 through September 2020 showed two Asian nations, South Korea and Japan leading, ahead of Mexico and Spain respectively.

The Top 10 recipients of US LNG by numbers of cargoes, are: 1) South Korea 252 cargoes. 2) Japan 162. 3) Mexico 153. 4) Spain 118. 5) China 90. 6) India 80. 7) UK 79. 8) Chile 79. 9) France 63 and 10) Brazil 55.

The Sabine Pass plant overtook the Cameron facility that briefly became the US volume leader in August with 11 cargoes before being closed by a hurricane at the end of that month.

With Cameron out of action, the September cargoes came from Sabine Pass (18) Corpus Christi (11), Freeport (10), Cove Point (5) and Elba Island (1).

The average year-to-date price of US LNG through September 2020 dropped to $5.11 per MMBtu versus August’s $5.36 per MMBtu.

Shipments from the Cove Point plant were the most expensive in September and cost an average of $6.90 per MMBtu ($6.17 per MMBtu in August).

Prices of shipments from the Sabine Pass export point in September averaged $5.32 per MMBtu ($4.89 per MMBtu in August).

Prices at Corpus Christi in September averaged $4.43 per MMBtu ($3.73 per MMBtu in August).

The Freeport facility posted average September prices of $5.58 per MMBtu ($5.86 per MMBtu in August).

The Elba Island plant shipped one cargo in September as well as one in August and the latest was just its fourth overall. The September prices was $3.70 per MMBtu.

The US also sends regular ISO containers by cargo ship to the Caribbean nations of Barbados, the Bahamas and Haiti.

In September, a total of 18 containers were delivered versus 19 in August. The recipients were Bahamas 10, Haiti four and Barbados four, while no ISO containers reached Jamaica in September.