Pakistan is saving 600 million dollars by getting best LNG deal.

[Verve]

Qatar cannot save itself by churning out paid articles for propaganda.

or paid by PMLN as they are known for doing this.

 

[The Accountant]

Playing Gas Firms Off Each Other Saved Pakistan $600 Million
By
Faseeh Mangi
and
Dan Murtaugh
September 9, 2018, 11:00 PM GMT+2 Updated on September 10, 2018, 9:48 AM GMT+2

• Used bids from Gunvor, BP, others to get lower Qatari prices
• Details revealed to senate committee scrutinizing 2016 deal

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NG1
Generic 1st 'NG' Future
2.81
USD/MMBtu
+0.01+0.25%
CL1
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67.68
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+0.14+0.21%
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Pakistan said it saved more than $600 million over the first 10 years of a natural gas supply deal by pitting some of the world’s biggest sellers against each other.

A report from the state’s oil marketing company presented two weeks ago to a senate committee, and reviewed by Bloomberg News, details how the 2016 deal came together with Qatar, the world’s largest supplier of liquefied natural gas. It also sheds a rare light on such high-stakes energy deals, which are almost exclusively settled behind closed doors and stay hidden from public scrutiny.



The maneuvering by Pakistan came after two years of negotiations hit an impasse as Qatar refused to lower its offer price for LNG. So Pakistan sought leverage on the open market in late 2015, publicly seeking 120 cargoes in two large tenders, which brought in bids from suppliers including Royal Dutch Shell Plc and BP Plc.

While negotiations with Qatargas Operating Co. were under way, the tender was “issued to fetch maximum number of bidders and best price option,” the presentation said. “The strategy helped bring down prices with Qatargas and saved $610 million."

Timeline of a Deal
Pakistan and Qatar's LNG negotiations

Source: Pakistan State Oil presentation to Senate Standing Committee on Petroleum

Pakistan then informed Qatar about the lowest bid, from Switzerland-based Gunvor Group Ltd., which the Middle East supplier agreed to match. Pakistan still purchased some LNG from Gunvor, awarding it the first tender. But the volumes it sought from the second tender ended up in the final Qatar deal, bulking it up by 25 percent.

The head of a senate committee now scrutinizing the deal, Mohsin Aziz, confirmed the details of the presentation in an interview last week. Pakistan State Oil Co. and Qatargas officials didn’t respond to requests for comment. Gunvor and BP declined to comment. Shell said it looks forward to future LNG options in Pakistan, without directly commenting on the tender.

The deal with Qatar, which was eventually settled for 3.75 million metric tons annually over 15 years, marked Pakistan’s emergence as an LNG buyer. The country turned to imports after its own declining production forced some factories to shut and caused blackouts. Imports have grown rapidly since early 2016, with Pakistan the seventh-largest LNG buyer globally in August, according to Bloomberg vessel-tracking data.

Need for More
Pakistan's LNG imports are set to soar to 2030

Source: Bloomberg NEF forecast

Negotiations between state agencies and foreign LNG suppliers have been a target of criticism by lawmakers in recent years, some of whom claim that the lack of transparency is hiding potential corruption. These concerns helped the nation’s new prime minister, Imran Khan, sweep to victory in July promising reform. Khan, a former cricket star, has also pledged to strengthen Pakistan’s accountability bureau, which is said to be conducting an inquiry into the country’s first LNG receiving terminal.

Against that backdrop, the Senate Standing Committee on Petroleum, which is also looking into other energy-related developments, brought in Pakistan State Oil officials Aug. 31 to explain the history of the deal. That the 2016 Qatar contract was negotiated in private and the only publicly available copy is redacted raised particular concern.

Despite Pakistan State Oil’s assertion that it saved money, Aziz, the committee head and a member of Khan’s party, said there are still concerns over the deal and will likely recommend the matter for further investigation by government agencies.

The redacted portions of the contract, which were also reviewed by Bloomberg, include the following:

• The contract price of the LNG per million British thermal units is the equivalent of 13.37 percent of the average price of Brent oil futures for the preceding three months
• Pakistan can increase or decrease the size of the contract by five cargoes a year, equivalent to about 8 percent
• The parties can’t renegotiate the price for 10 years
• Pakistan can sell cargoes to other buyers and divert to other terminals
• Port charges to unload cargoes for seller can’t exceed $320,000

These details cover normal contract terms that are generally considered in the industry to be commercially sensitive, according to Fauziah Marzuki, an LNG analyst with Bloomberg NEF. The price and other terms of the contract were in line with in other deals reached around the same time, she said.

Since the launch of the LNG industry in the 1960s, long-term contracts have largely been priced as a percentage of oil, known as a slope. A 13 percent slope means that if the price of oil were $100 a barrel, gas would cost $13 per million British thermal units.

Spot LNG in the Japan & South Korea market traded at $11.52 per million British thermal units on Friday. Brent oil, the global benchmark, settled that day at $76.83 a barrel.

Qatar might have been feeling other pressures in early 2016 beyond Pakistan’s tactics. That was also the nadir of the oil bust, as crude crashed from more than $100 a barrel in mid-2014 to less than $30, bringing down LNG with it.

Reducing the contract’s price from to 13.37 percent from 13.9 percent will save Pakistan $610 million over 10 years at an average Brent price of $60 a barrel, according to the oil company’s presentation.

(Updates energy prices in 14th paragraph. An earlier version of this story corrected the location of Gunvor’s head office.)

https://www.bloomberg.com/news/arti...nts-off-each-other-saved-pakistan-600-million

What a crap article and crap logic. Didn't expect this bull shit from the brand as high as Bloomberg ...

1. First of all, they are comparing spot prices of today when fuel is 76 dollars from a 10 years firm contract at the time when oil was dirt cheap and nobody was interested in buying gas except for people like us who has a pipeline network for distribution of gas ...
2. How the hell negotiation between with supplier by getting competitive biddings is a saving? This is a basic principle of purchasing, You take a quote and shortlist the lowest supplier then you further negotiate with them to further reduce the price. This is the very basic method of purchasing.
3. Saving would have been real if there was a similar contract of 10 years firm commitment in 2016 with similar pricing.

 

[El Sidd]

or paid by PMLN as they are known for doing this.

So will PTI make the deals Public?

I heard they bowed down after incentives were offered.

Spineless seems to be a famous word These days.

 

[Verve]

So will PTI make the deals Public?

I heard they bowed down after incentives were offered.

Spineless seems to be a famous word These days.

What are you desires though? Dictatorship? You've always had a soft spot for Nawaz but PTI you go berzerk over everything.

Should Pakistan makes the PMLN's deals on CPEC public when China is saying that they are willing to renegotiate provided old contracts are not made public?

You 'heard', from whom? What's your source? What were the incentives?

 

[El Sidd]

What are you desires though? Dictatorship? You've always had a soft spot for Nawaz but PTI you go berzerk over everything.

Should Pakistan makes the PMLN's deals on CPEC public when China is saying that they are willing to renegotiate provided old contracts are not made public?

You 'heard', from whom? What's your source? What were the incentives?

The incentives were spoken right out of qataris mouth not by conspiracy theorists.

I do Not belong to a culture of blame or cursing those who couldnt deliver.

Average persons demands do Not change with the government.

 

[Verve]

The incentives were spoken right out of qataris mouth not by conspiracy theorists.

Where is your proof or witnesses? You are a liar if you can't provide proof - that's how it works in law doesn't it Mr Law Student?

I do Not belong to a culture of blame or cursing those who couldnt deliver.

Yeah you belong to the culture where you sit on your arse on your pc all day and blame a less than 2 months old government for every little thing that your favourite Nawaz ruined in the first place.

And don't bullshit us. When Nawaz was PM, you hardly uttered a word against him and his party and here you are regurgitating 'PTI this, PTI that'.

Average persons demands do Not change with the government.

But duffers expect change overnight. Either you are an anarchist or just plain stupid! You decide.

 

[El Sidd]

Where is your proof or witnesses? You are a liar if you can't provide proof - that's how it works in law doesn't it Mr Law Student?

Your ignorance on the matter does not make me a liar. Learn to understand complete definitions of the words before throwing them around. The translation of liar is kazzab.

Yeah you belong to the culture where you sit on your arse on your pc all day and blame a less than 2 months old government for every little thing that your favourite Nawaz ruined in the first place.

And don't bullshit us. When Nawaz was PM, you hardly uttered a word against him and his party and here you are regurgitating 'PTI this, PTI that'.

So why do you hate People in India who make each other force chant jai sri RAM before taken seriously?

But duffers expect change overnight. Either you are an anarchist or just plain stupid! You decide.

A prepared Team would have used an ordinance law to extract Maximum results or an Executive Order.

You can label me any how You please. Just Stick with one and No uturns.

 

[Verve]

Your ignorance on the matter does not make me a liar. Learn to understand complete definitions of the words before throwing them around. The translation of liar is kazzab.

So why do you hate People in India who make each other force chant jai sri RAM before taken seriously?



A prepared Team would have used an ordinance law to extract Maximum results or an Executive Order.

You can label me any how You please. Just Stick with one and No uturns.

Provide proof or shut up!

A prepared team ... yeah, you should be the PM and 'prepare a team' to fix a bankrupt state with a fragile economy in 2 months!

It's piss easy to just criticise sat on a chair whilst doing jack all in reality - your primary skill it seems.

 

[El Sidd]

Provide proof or shut up!

A prepared team ... yeah, you should be the PM and 'prepare a team' to fix a bankrupt state with a fragile economy in 2 months!

It's piss easy to just criticise sat on a chair whilst doing jack all in reality - your primary skill it seems.

It would have been fair and justice to the Nation if they had declared banktruptcy because the General Public knows it for 10 years.

 

[Verve]

It would have been fair and justice to the Nation if they had declared banktruptcy because the General Public knows it for 10 years.

No, fair and justice would be to torture all the corrupt (including your beloved ex-PM) and fill up the treasury!

General public would not have any issues with that!

 

[El Sidd]

No, fair and justice would be to torture all the corrupt (including your beloved ex-PM) and fill up the treasury!

General public would not have any issues with that!

Torture is illegal in Pakistan.

But an Executive Order to either counter banktruptcy or avoid it could have done it.

Declaring Financial emergency is a constitutional right of any government.

 

[Verve]

Torture is illegal in Pakistan.

But an Executive Order to either counter banktruptcy or avoid it could have done it.

Declaring Financial emergency is a constitutional right of any government.

Torture of some sort is done when protecting the state is the matter in hand.

Financial emergency will come, if IMF puts unfavourable conditions. Public has to bear the shit past rulers left behind.

 

[El Sidd]

Torture of some sort is done when protecting the state is the matter in hand.

Financial emergency will come, if IMF puts unfavourable conditions. Public has to bear the shit past rulers left behind.

Ok.
I have No time for khayali pilaos.

 

[Verve]

Ok.
I have No time for khayali pilaos.

Run baby run!

 

[El Sidd]

Run baby run!

Ok.