The Pakistan government has formed a committee to take policy decision in consultation with LNG terminal developers to utilise their idle capacity.
Idle capacity utilisation of the existing LNG terminals by private companies was granted by the government in July, 2019 but ships could be used by the private sector, due to the monopoly held by the state-run companies.
According to local sources, the private sector has been keen to import LNG but has not been able to do so due to a number of reasons, including the long-term LNG supply contract with Qatar at a higher price.
Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL) are the two state-owned companies that are importing LNG.
The private sector claimed it can import LNG at cheaper rates that the state-owned companies, as it does not have to comply with Public Procurement Regulatory Authority (PPRA) rules and can import the gas at anytime.
The private sector claimed that Pakistan has missed an opportunity, when LNG prices plunged to $2 per MMBtu following the Covid-19 outbreak, by denying them permission to import gas.
Private companies have conducted a study that said LNG prices would remain at around $3 per MMBtu for the next five years and, therefore, they should be allowed to reap benefits of low prices.
Gazprom took an important step towards the start of FEED work on its Baltic LNG project by securing what appears to be part of a larger credit line provided by Russia’s state-controlled VEB investment bank. Baltic LNG is planned to see first gas in 2H 2023 but Shell’s withdrawal from the project removes its proprietary technology. This increases the risk for delay, in our view.
Monthly trade increased marginally by 0.05mmt on Asian and European demand in July
After a prolonged maintenance period, Algeria’s Skikda LNG has resumed production in late July. Our data for the 1H of August indicates the plant is continuing to ramp up production. Whilst output at Arzew increased during the first two quarters of the year, Skikda’s restart was threatened by a severely damaged turbine in February.
Norwegian LNGC owner, Flex LNG is to take delivery of another gas carrier next week boosting the total number of carriers in operation to eight.
The 173,400 cu m ‘Flex Artemis’, due to be handed over by Daewoo on 17th August, will be the eighth LNGC to join the fleet.
Once delivered, she will commence a long-term charter with Clearlake, part of energy trading house Gunvor.
The timecharter is initially for a five year duration with an option for another five years.