PML-N govt ruined gas sector by establishing LNG terminals sans storage facilities: Nadeem

[muhammadhafeezmalik]

Bear in mind the technology to keep LNG being stored for later use is still to be announced. All the gas must be transmitted through pipelines. There is a storage tank with every terminal in the world but it is usually smaller than the LNG vessels' storage capacity and it is not for later use. And if not consumed, it will just create more technical troubles than one can imagine.

For storing LNG it must be kept super cooled to –162°C using refrigerants.

PML-N govt ruined gas sector by establishing LNG terminals sans storage facilities: Nadeem

Special Assistant to the Prime Minister (SAPM) on Petroleum Nadeem Babar Monday said that the previous government of Pakistan Muslim League-Nawaz (PML-N) ruined gas sector by setting up two LNG terminals in haste under expensive agreements and that too without constructing storage facilities.


Addressing a news conference along with Minister for Energy Omar Ayub Khan, he said contrary to the world-wide practice, the past government set up Liquefied Natural Gas (LNG) terminals sans storage facilities for a huge market like Pakistan.


“Whenever LNG terminals are installed in any part of the world where Pakistan like gas infrastructure exists, storage facilitates are must be constructed there,” he said.


The SAPM said the LNG terminals were set up at fixed payment (take or pay method) at around $ 0.5 million per day, but remained reluctant to construct any storage, which eventually caused huge loss to national exchequer.


He said, since the PTI government came into power, there were nine such months during which only 800 Million Cubic Feet per Day (MMCFD) or less LNG was sold due to less demand from consumers.


“It means that we have wasted a huge amount under half-a-million dollar per day contract, signed by the previous government.”

PML-N govt ruined gas sector by establishing LNG terminals sans storage facilities: Nadeem

SAPM on Petroleum Nadeem Babar said government of PML-N ruined gas sector by setting up two LNG terminals in haste under expensive agreements

www.app.com.pk

 

[Sulman Badshah]

Payment shouldn't be based on a fixed amount .. It should be pro rata of LNG stored at terminal

 

[ziaulislam]

Bear in mind the technology to keep LNG being stored for later use is still to be announced. All the gas must be transmitted through pipelines. There is a storage tank with every terminal in the world but it is usually smaller than the LNG vessels' storage capacity and it is not for later use. And if not consumed, it will just create more technical troubles than one can imagine.

For storing LNG it must be kept super cooled to –162°C using refrigerants.

PML-N govt ruined gas sector by establishing LNG terminals sans storage facilities: Nadeem

Special Assistant to the Prime Minister (SAPM) on Petroleum Nadeem Babar Monday said that the previous government of Pakistan Muslim League-Nawaz (PML-N) ruined gas sector by setting up two LNG terminals in haste under expensive agreements and that too without constructing storage facilities.


Addressing a news conference along with Minister for Energy Omar Ayub Khan, he said contrary to the world-wide practice, the past government set up Liquefied Natural Gas (LNG) terminals sans storage facilities for a huge market like Pakistan.


“Whenever LNG terminals are installed in any part of the world where Pakistan like gas infrastructure exists, storage facilitates are must be constructed there,” he said.


The SAPM said the LNG terminals were set up at fixed payment (take or pay method) at around $ 0.5 million per day, but remained reluctant to construct any storage, which eventually caused huge loss to national exchequer.


He said, since the PTI government came into power, there were nine such months during which only 800 Million Cubic Feet per Day (MMCFD) or less LNG was sold due to less demand from consumers.


“It means that we have wasted a huge amount under half-a-million dollar per day contract, signed by the previous government.”

PML-N govt ruined gas sector by establishing LNG terminals sans storage facilities: Nadeem

SAPM on Petroleum Nadeem Babar said government of PML-N ruined gas sector by setting up two LNG terminals in haste under expensive agreements

www.app.com.pk

yes but we have zero storage which makes the terminal unusable..
like every PMLN project..zero background work, zero feasiblity and zero logic

 

[muhammadhafeezmalik]

yes but we have zero storage which makes the terminal unusable..
like every PMLN project..zero background work, zero feasiblity and zero logic

Why it is not working, it is supplying LNG perfectly from last four years?? They do not need to built a storage tank as half of the LNG terminals in the world are without storage tank especially established in the last five years.

 

[Patriot forever]

LNG: Asking the right questions
BR Research Updated 01 Dec 2020
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The LNG debate refuses to move beyond the long-term contract and spot prices. The ministry has of late been seen telling how the previous government inked expensive long-term LNG supply contracts, and how the average arrival of LNG at spot rates has been at steep discount to long-term deals. The petroleum ministry is not entirely to blame as the right questions are not being asked on LNG.
Here is what sheer numbers tell. Over the last 24 months, Pakistan has imported 226 vessels of RLNG. Nearly two-third of LNG has been imported under the long-term deal with Qatar, with 143 cargoes, at an average of maximum 6 cargoes per month – in strict compliance with the deal terms.

Not many would know but Qatar’s is not the only long-term LNG deal that Pakistan has signed. Another 21 percent of imported LNG comes via Pakistna LNG Limited under two sepearate contracts of 5-years and 15-years. Paksitan is supposed to import 180 cargos over 15 years at a monthly avearge of one cargo at the Brent slope of 11.95 percent, which is 11 percent cheaper than Qatar’s brent slop of 13.37 percent. Similalrly, 60 cargoes are to be imported over five years at a brent slope of 11.62 under the 5-year deal, which is nearing its completion.
The share of spot cargoes in the last two years has been at a lowly 16 percent, with an average brent slope of 10.44 percent – lower than all the three long-term contract prices, and 22 percent lower than the Qatar deal. This is what keeps giving birth to questions of Pakistan’s unwillingness to import spot cargoes during the peak Covid period.

What gets ignored is the fact that LNG imports will continue to largely remain a factor of demand in the country. Pakistan’s energy demand from March to September plummeted for most industries in the wake of Covid. Secondly, peak Covid came in months of low domestic demand, and the drop in industrial demand was enough to keep incremental imports away.
Granted that spot prices were very low during that period, but Pakistan could not have imported all that cheap LNG with nowhere to sell, Bear in mind the technology to keep LNG being stored for later use is still to be announced. All the gas must be transmitted through pipelines. And if not consumed, it will just create more technical troubles than one can imagine.

To put it mildly, Pakistan simply did not need to import more gas, even though it was cheaper. And no, it is not advisable to put sovereign contracts on hold in quest of cheaper rates. The whole purpose of long-term deals is to stick by the rules, in favorable and unfavorable times. Could the long-term deals have been struck at better rates? Yes. But that does not absolve Pakistan from its sovereign obligations.
Mind you, there is also the element of supply security attached with long-term deals. All leading LNG importing countries have a blend of spot and long-term deals to ensure supply in peak demand season. There is a reason why the average import unit prices of all the leading importing countries move in a close range over last five years.
It is now time that the debate graduates from pricing to what can be done to increase the LNG demand at home. What sort of buyer and seller models need to be followed to reduce the government’s role in LNG commercial dealings? How many terminals are required? What would it take to keep the distribution system at pace with LNG demand? What is needed to have better coordination among authorities to ensure compatibility of power evacuation based on LNG

LNG: Asking the right questions

The LNG debate refuses to move beyond the long-term contract and spot prices. The ministry has of late been seen...

www.brecorder.com

@muhammadhafeezmalik
Have a look. This will answer many of your queries regarding LNG spot pricing etc, and the media propaganda especially shahzeb khanzada.

 

[muhammadhafeezmalik]

LNG: Asking the right questions
BR Research Updated 01 Dec 2020
Facebook
Twitter
Whatsapp
Comments

The LNG debate refuses to move beyond the long-term contract and spot prices. The ministry has of late been seen telling how the previous government inked expensive long-term LNG supply contracts, and how the average arrival of LNG at spot rates has been at steep discount to long-term deals. The petroleum ministry is not entirely to blame as the right questions are not being asked on LNG.
Here is what sheer numbers tell. Over the last 24 months, Pakistan has imported 226 vessels of RLNG. Nearly two-third of LNG has been imported under the long-term deal with Qatar, with 143 cargoes, at an average of maximum 6 cargoes per month – in strict compliance with the deal terms.

Not many would know but Qatar’s is not the only long-term LNG deal that Pakistan has signed. Another 21 percent of imported LNG comes via Pakistna LNG Limited under two sepearate contracts of 5-years and 15-years. Paksitan is supposed to import 180 cargos over 15 years at a monthly avearge of one cargo at the Brent slope of 11.95 percent, which is 11 percent cheaper than Qatar’s brent slop of 13.37 percent. Similalrly, 60 cargoes are to be imported over five years at a brent slope of 11.62 under the 5-year deal, which is nearing its completion.
The share of spot cargoes in the last two years has been at a lowly 16 percent, with an average brent slope of 10.44 percent – lower than all the three long-term contract prices, and 22 percent lower than the Qatar deal. This is what keeps giving birth to questions of Pakistan’s unwillingness to import spot cargoes during the peak Covid period.

What gets ignored is the fact that LNG imports will continue to largely remain a factor of demand in the country. Pakistan’s energy demand from March to September plummeted for most industries in the wake of Covid. Secondly, peak Covid came in months of low domestic demand, and the drop in industrial demand was enough to keep incremental imports away.
Granted that spot prices were very low during that period, but Pakistan could not have imported all that cheap LNG with nowhere to sell, Bear in mind the technology to keep LNG being stored for later use is still to be announced. All the gas must be transmitted through pipelines. And if not consumed, it will just create more technical troubles than one can imagine.

To put it mildly, Pakistan simply did not need to import more gas, even though it was cheaper. And no, it is not advisable to put sovereign contracts on hold in quest of cheaper rates. The whole purpose of long-term deals is to stick by the rules, in favorable and unfavorable times. Could the long-term deals have been struck at better rates? Yes. But that does not absolve Pakistan from its sovereign obligations.
Mind you, there is also the element of supply security attached with long-term deals. All leading LNG importing countries have a blend of spot and long-term deals to ensure supply in peak demand season. There is a reason why the average import unit prices of all the leading importing countries move in a close range over last five years.
It is now time that the debate graduates from pricing to what can be done to increase the LNG demand at home. What sort of buyer and seller models need to be followed to reduce the government’s role in LNG commercial dealings? How many terminals are required? What would it take to keep the distribution system at pace with LNG demand? What is needed to have better coordination among authorities to ensure compatibility of power evacuation based on LNG

LNG: Asking the right questions

The LNG debate refuses to move beyond the long-term contract and spot prices. The ministry has of late been seen...

www.brecorder.com

@muhammadhafeezmalik
Have a look. This will answer many of your queries regarding LNG spot pricing etc, and the media propaganda especially shahzeb khanzada.

Read the highlighted paragraph again.
Most of the things I have said in my previous threads, I have no disagreement with this article.

 

[Patriot forever]

Read the highlighted paragraph again.
Most of the things I have said in my previous threads, I have no disagreement with this article.

I was saying in regard to your posts in previous threads regarding spot share/pricing etc.

 

[muhammadhafeezmalik]

I was saying in regard to your posts in previous threads regarding spot share/pricing etc.

This thread is about storage tank. About spot purchase and long term agreement this article is also saying same, what I was saying for long. Both have their own pros and cons. One should not beat drums over fluctuation of market prices. PTI started this mantra others just followed.

 

[ziaulislam]

Why it is not working, it is supplying LNG perfectly from last four years?? They do not need to built a storage tank as half of the LNG terminals in the world are without storage tank especially established in the last five years.

Because we have winter variations
In case u didnt know

 

[muhammadhafeezmalik]

Because we have winter variations
In case u didnt know

You want to say that in winters the terminal gets nonoperational??

 

[nahtanbob]

storage facilities cost money. who is going to pay here ?

there is a lot of second guessing. the natural gas market has gone south in the last decade. even a large company like Exon Mobil has made mistakes here